A Comparative Analysis of Cournot Equilibrium and Perfect Competition Models for Electricity and Hydrogen Markets Integration

The relationship between hydrogen and electricity has gained attention due to their interconnected roles in the energy transition. Existing joint electricity and hydrogen market models often overlook the dependence between electricity and hydrogen prices. Indeed, while electrolyzers production can raise electricity prices, electricity price significantly impacts the costs of hydrogen production. Considering this price-based interdependency, this study compares a Cournot equilibrium and a perfect competition market model for electricity and hydrogen integration. Both models are transformed into new quadratic optimization problems to facilitate resolution. The analysis highlights the potential of the Iberian region for hydrogen production. Furthermore, it is evident that, under conditions of perfect competition, renewable generation is given priority for meeting electricity demand, leading to a decrease in both electricity and hydrogen prices on a global scale compared to the Cournot scenario.