The rapid expansion of renewable energies has the potential to decarbonize the electricity supply. This is more challenging in difficult-to-electrify sectors. The use of hydrogen provides a massive potential for this issue. However, expanding hydrogen production increases electricity demand while providing additional flexibility to the electricity market. This paper mainly aims to analyze the economic effects of this sector coupling between the European electricity and national hydrogen markets. The developed energy market model jointly considers both markets to reach an overall welfare optimum. A novel modeling approach allows the interaction of these markets without the need for several iterative optimization runs. This allows for a detailed analysis of various market participants’ changes in consumer and producer surpluses. The optimization is conducted in 13 connected Central European countries to account for various power plant fleets, generation mixes, and electricity prices. Results show an overall welfare increase of EUR 4 to 28 billion in 2030 and an EUR 5 to 158 billion increase in 2040. However, there is a surplus shift from consumers to producers. The consumer surplus is reduced by up to EUR 44 billion in 2030 and EUR 60 billion while producers benefit to achieve the overall welfare benefits. The reduction of consumer surplus changes if significant price peaks occur. Fuel cell applications can avoid these price peaks, resulting in a surplus shift from thermal power plants to consumers. Hence, consumer surplus can increase by up to EUR 146 billion in the respective 2040 scenarios. Pink hydrogen accounts for a sizable portion of total hydrogen production, up to 58 percent in 2030 and up to 30 percent in 2040. As a result, nuclear power plants that are nearly entirely allocated in France stand to benefit greatly from this sector coupling. Additional efforts could be made to address the link between hydrogen and natural gas prices. Furthermore, the potential for cross-border hydrogen trade and the implementation of national legal and regulatory frameworks could be assessed.

Decentralisation and sector coupling are becoming increasingly crucial for the decarbonisation of the energy system. Resources such as waste and water have high energy recovery potential and are required as inputs for various conversion technologies; however, waste and water have not yet been considered in sector coupling approaches but only in separate examinations. In this work, an open-source sector coupling optimisation model considering all of these resources and their utilisation is developed and applied in a test-bed in an Israeli city. Our investigations include an impact assessment of energy recovery and resource utilisation in the transition to a hydrogen economy, with regard to the inclusion of greywater and consideration of emissions. Additionally, sensitivity analyses are performed in order to assess the complexity level of energy recovery. The results demonstrate that waste and water energy recovery can provide high contributions to energy generation. Furthermore, greywater use can be vital to cover the water demands in scarcity periods, thus saving potable water and enabling the use of technology. Regarding the transition to hydrogen technologies, resource energy recovery and management have an even higher effect than in the original setup. However, without appropriate resource management, a reduction in emissions cannot be achieved. Furthermore, the sensitivity analyses indicate the existence of complex relationships between energy recovery technologies and other energy system operations.