Turning Wind Into Value: Hydrogen Storage and Trade as Variation Management Strategies for Offshore Wind Integration

ABSTRACT Offshore wind power, like other variable renewable electricity sources, requires variation management strategies (VMS) to address demand–supply imbalances in the electricity system. From a functional perspective, VMS that can absorb excess electricity are particularly well suited to wind power, which exhibits strong temporal variability. This study analyses VMS for large‐scale offshore wind integration on the island of Gotland in southern Sweden, chosen for its relatively simple electricity system and the presence of several planned offshore wind projects in the vicinity. The strategies evaluated under multiple historical electricity price scenarios include hydrogen production with storage and potential sales, electricity trade with mainland Sweden and hydrogen‐based chemical carriers (methanol and ammonia) also assumed to be sold on external markets. The results show that a combination of electricity trade and compressed hydrogen storage delivers the highest economic benefits at the system level. Hydrogen storage consistently improves the value of wind power across all price years considered, even considering the low hydrogen price (€3–€4/kg) assumptions applied in this study, with higher prices leading to further improvements in profitability. Methanol and ammonia are also found to be highly sensitive to electricity and product prices. Moreover, at fossil‐based benchmark prices, they are unable to outperform compressed hydrogen. However, they may become attractive alternatives if a premium can be obtained for chemical hydrogen carriers produced using renewable electricity.