Advantages of Using Co-optimisation Modelling Solutions for Interconnected Energy Markets
The transition to a sustainable energy future requires a thorough understanding of the intricate dynamics within electricity, hydrogen and natural gas energy markets. Integrated models have emerged as essential tools to navigate this complexity, providing comprehensive insights into future energy landscapes and enabling prudent decision making. However, the integration of these energy systems presents unique challenges, requiring strategic capacity planning and co-optimisation to ensure seamless interactions. This paper explores the integration of the electricity, hydrogen and natural gas energy worlds within a co-optimisation framework, addressing practical issues and benefits for strategic planning. The co-optimisation model generates dynamic commodity pricing by linking, for example, the production of hydrogen to the hourly generation of electricity used to produce the same hydrogen through electrolysis. The utilisation of the produced hydrogen is in turn linked to the generation of electricity through combined cycle gas turbines (CCGT). Critical considerations include maintaining consistent units and currency, ensuring technology and price consistency, and addressing cumulative differences. The benefits of co-optimisation models extend to both companies and policy makers, facilitating better decision making by optimising capacity expansions, minimising costs and balancing economic efficiency with environmental impact. These models enable the seamless deployment of clean energy solutions, mitigate the risks associated with energy price volatility, and promote operational resilience. In summary, the integration of co-optimisation models provides a holistic approach to energy decision making, maximising the potential of electricity and hydrogen energy systems in the transition to a sustainable energy future.