Local energy markets (LEMs) are increasingly promoted as coordinated market frameworks for distributed electricity resources in low-carbon-level energy systems. In parallel, green hydrogen is emerging as an energy carrier used for long-duration storage and sector coupling. Yet hydrogen is typically treated as a technological extension of the existing flexibility options rather than as a separate market participant. This paper argues that such a perspective is conceptually insufficient for future LEM design. It is proposed that hydrogen should be understood as a hybrid market participant in LEMs, rather than as a special case for load, storage or generation. Hydrogen can simultaneously be used to meet a flexible electricity demand, be stored for a long duration, and act as a dispatchable electricity supply. These combined roles violate the core assumptions embedded in electricity-only LEMs, including one-direction energy flow, short-term time prospects, symmetric storage behavior and there being an electricity-only supply option. Particular attention is given to small-to-medium-scale electrolyzers, which are likely to dominate hydrogen participation in local contexts. Rather than proposing a specific market mechanism or numerical model, this paper suggests market design considerations for future local energy markets and highlights open challenges for electricity–hydrogen market coordination.
Pratik Mochi (Mon,) studied this question.