Using approximate dynamic programming for estimating the revenues of a hydrogen-based high-capacity storage device

This paper proposes a methodology to estimate the maximum revenue that can be generated by a company that operates a high-capacity storage device to buy or sell electricity on the day-ahead electricity market. The methodology exploits the Dynamic Programming (DP) principle and is specified for hydrogen-based storage devices that use electrolysis to produce hydrogen and fuel cells to generate electricity from hydrogen. Experimental results are generated using historical data of energy prices on the Belgian market. They show how the storage capacity and other parameters of the storage device influence the optimal revenue. The main conclusion drawn from the experiments is that it may be advisable to invest in large storage tanks to exploit the inter-seasonal price fluctuations of electricity.