Paper: arXiv 2508.06500

Authors: Jonathan Brandt, Astrid Bensmann, Richard Hanke-Rauschenbach

Abstract

Following years of controversial discussions about the risks of market-based redispatch, the German transmission network operators finally installed regional redispatch markets by the end of 2024. Since water electrolysers are eligible market participants, the otherwise downwards redispatched renewable energy can be used for green hydrogen production in compliance with European law. To show how different price levels in regional redispatch markets affect green hydrogen production cost and thus the incentive for electrolyser market participation, we use historic redispatch time series and evaluate various power purchase scenarios. Our results show that low price levels can lead to notable production cost reductions, potentially counteracting uncertainties in redispatch power availability and thus incentivising system-beneficial electrolyser siting. In contrast, the possibility of high price levels can nullify an increase in the competitiveness of German and European green hydrogen through production cost reductions and discourage market participation.

Complexity vs Empirical Score

  • Math Complexity: 3.0/10
  • Empirical Rigor: 6.5/10
  • Quadrant: Street Traders — practical and empirical, lighter on theory

Why this score: The paper applies a straightforward linear optimization framework to empirically rich, high-resolution regional grid and redispatch datasets in Germany. While mathematically simple, it provides practical, policy-relevant insights regarding green hydrogen production economics under new regulatory framework conditions.

Research Flowchart

  flowchart TD
    A["Goal: Assess impact of regional redispatch prices on German green hydrogen production costs"] --> B["Data: Historic redispatch time series & power purchase scenarios"]
    B --> C["Method: Cost modeling of water electrolysers in redispatch markets"]
    C --> D{"Redispatch Price Level"}
    D -- Low Price Levels --> E["Outcome: Notable H2 cost reductions & incentivized system-beneficial siting"]
    D -- High Price Levels --> F["Outcome: Reduced H2 competitiveness & discouraged market participation"]

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0 of 82 cited works are in the corpus; resolved via arXiv source bundles, Semantic Scholar and OpenAlex. Corpus-wide: 2518 linked papers.