Learnings

Outcomes

Year 2022/2023: 

• A set of decarbonisation scenarios for simulation studies was developed. The scenarios were divided into two categories: core and sensitivity scenarios. The core scenarios use the reference values of key parameters, while sensitivity scenarios alter the value of one or more parameters to identify the impacts of those parameters on the results. The core scenarios’ outputs are used as references or counterfactuals when analysing the results from sensitivity studies.  
• An integrated whole-system model was developed and the benefits of optimal portfolio and system implications of electrolysers under different scenarios were analysed. The system benefit from power-to-gas (P2G) is significant while there is lower flexibility in the system; it’s less significant when flexibility is high because other flexibility sources such as demand flexibility, energy storage can reduce the need for P2G. It was also found that electrolysers facilitate higher penetration of wind and PV. Increased wind especially in the North given its high-capacity factor, will tend to increase the transmission network capacity requirement.  

Year 2023/2024: 

The project’s key outputs consist of: 

• A set of test scenarios.
• A modelling tool to analyse the impact of electrolysers on the onshore GB transmission system.
• A report containing a comprehensive set of results and analysis of the role and impact of electrolysers on the future GB energy system.  

The key findings of the project are summarised as follows. 

• Electrolysers reduce Renewable Energy Sources (RES) system integration costs by providing sector-coupling flexibility and ancillary services while producing green (low/zero carbon) hydrogen. They allow electricity to be converted to hydrogen and if stored efficiently, reduce the curtailment of renewable energy and improv the capacity factors of RES. With electrolysers, the volume of wind and solar (Photo Voltaic Cells) PV that can be integrated cost-effectively increases.
• Electrolysers can also support network congestion management; the network capacity released by electrolysers can support connections of more low-carbon generation..  
  When the cost of green hydrogen production is higher than that of blue hydrogen, the system value of electrolysers lies in their contribution to flexibility. Therefore, in a system with sufficient flexibility sources such as demand response, energy storage, and interconnectors, the system benefits of electrolysers reduce; however, it can still provide alternatives for diversifying the hydrogen production sources. The results also imply that electrolysers compete not only with other hydrogen production technologies but also with other flexibility technologies.
• In a system with low flexibility, electrolysers can reduce the system costs by £2.16 bn/year. Most of the savings are in the avoided investment and operating cost for blue hydrogen production, reduction in carbon storage cost, and increased electricity exports while savings in transmission costs are relatively modest. To achieve those benefits, additional investment in low-carbon generation, electrolysers, and hydrogen storage are needed. The increased renewables also tend to increase electricity operating expenses or expenditure (OPEX) due to higher balancing requirements.  
• While electrolysers contribute to increasing electricity consumption to displace some gas consumption in blue hydrogen production, they do not increase the electricity peak demand and, therefore, do not require increase in firm generation capacity. The increased electricity consumption from electrolysers is offset by a reduction in the electricity consumption used in the methane reforming processes. 
  Electrolysers improve the use of low marginal cost generation, such as renewables and nuclear. This benefit is higher in the low-flexibility case. For example, offshore wind curtailment drops from 8.3% in a system without electrolysers to 3.8% with electrolysers in the “Low flex” scenario. In the case with higher flexibility, the level of curtailment decreases from 4.7%–4.9% down to around 2%.
• Deploying electrolysers reduces hydrogen demand from the power sector since more renewables can be integrated and system flexibility is improved. 
  Electrolysers can reduce the production of blue hydrogen, but they cannot completely displace firm hydrogen production technologies such as Auto Thermal Reformers (ATR) with Carbon Capture, Utilisation and storage (CCS.) As a result, the capacity factor of ATR+CCS is lower when electrolysers are in use. This also leads to lower carbon storage requirements and residual emissions from reforming processes.
• Electrolysers do not affect the capacity factor of Hydrogen produced from Biomass Energy with CCS (BECCS H2). BECCS H2 has a specific role in offsetting carbon emissions.
• The impact of integrating electrolysers in the system on the hydrogen storage requirements varies in different cases. In “Low flex”, electrolysers drive 2.5 TWh more hydrogen storage. In “Mid flex”, the hydrogen storage requirement only increases by 290 GWh; in “High flex”, the storage requirement is 100 GWh less. This implies that electrolysers and hydrogen storage provide cross-vector coupling flexibility to both hydrogen and power systems.
• Increased capacity of electrolysers will require more hydrogen storage. Hydrogen storage facilitates the efficient operation of electrolysers.
• Locations of electrolysers are mostly driven by wind power, mostly in Scotland. Other locations include South Wales, Southwest and Southeast England. 
  The optimal capacity of electrolysers proposed in different cases varies. The capacity range in the hydrogen heating pathway (H2) is between 9.5 and 60 GW. The variation in the full electrification heating pathway is smaller, between 6.8 and 19.2 GW.  

Key drivers for electrolysers in the Hydrogen heating pathway are high gas prices, low cost of electrolysers, low cost of offshore wind, high nuclear cost and lack of flexibility from demand response and distributed storage. The same drivers were observed in the electrification heating pathway, but the sensitivities to those factors are different. The highest driver is the lack of demand response and energy storage flexibility. Electrolyser deployment in hydrogen heating is more sensitive to gas prices than in electrification heating. 

The following key messages are derived from investigating the role of electrolysers in maintaining grid stability by addressing challenges from reduced inertia: 

• Electrolysers providing frequency response services significantly reduce grid operational costs, with potential savings up to £1.2 billion per year, but the value saturates when 30% of capacity (3GW) is reached due to competition with battery storage services.
• Electrolysers significantly reduce curtailment in renewable energy systems, absorbing excess electricity during peak production times and thus with potential savings up to 61 TWh per year.

By investigating the impact of offshore hydrogen production on electricity transmission and the overall operation of the hydrogen system, it has been  demonstrated that: 

• Hydrogen transmission and distribution enable hydrogen to be transported from production sites to load centres. Hydrogen can also be stored in pipelines; the hydrogen line pack provides intra-day flexibility to manage the challenges driven by renewable intermittency in the gas infrastructure. Flexibility from the hydrogen network should be operated in synergy with other flexibility technologies such as interconnectors, electricity storage and demand response technologies to support cost-efficient system operation and security.
• A future system with high renewables increases operational challenges as the studies reveal high swings in daily line pack, reaching 65 mcm/day and 75 mcm/day (up to 84% more than November 2021) in the Electrification and Hydrogen pathways, respectively.  
• Offshore electrolysers can significantly reduce infrastructure reinforcement in both the hydrogen and electrification pathways by 23% and 19%, respectively. They use excess offshore renewable energy to produce green hydrogen, which can be transported via gas pipelines, thus decreasing the burden on electrical transmission networks.
• The use of offshore electrolysers significantly reduces the curtailment of renewable energy by 57%, enhancing the efficient use of offshore renewable resources for green hydrogen production and improving the energy system’s sustainability.  

Sensitivity analysis has been carried out to investigate the impact that the allocation of electrolysers can have on investments in the onshore electricity transmission system of Great Britain in the year 2050. Five case studies have been conducted. These case studies share similar input data, with the key difference among them being the allocation of the electrolyser capacity across the electricity transmission system of GB in the year 2050. It is demonstrated that the allocation of electrolysers significantly impacts the required investments in the onshore electricity transmission system (assuming that the existing gas infrastructure can be used to transport hydrogen). The allocation of electrolysers on offshore will help reduce the onshore investment cost. 

Recommendations for further work 
Safety and regulatory compliance: Given the novel nature of hydrogen technologies, ensuring safety and compliance with local and international regulations is paramount. Future projects should prioritise developing robust safety protocols for electrolysers and associated technology, engaging with regulatory bodies early in the project lifecycle. 
Further studies can also be conducted to identify how the electrolysers can be integrated in system planning and operational standards and whether the current market mechanism can provide appropriate signals to guide optimal investment and operation in electricity and hydrogen systems. It is crucial to accurately estimate and optimise the capacity of electrolysers with actual demand. The project highlighted a saturation point at 30% capacity due to competition with other technologies like battery storage. Future projects should consider detailed market analysis to optimise the scale of electrolyser deployment. 
Regarding seasonal adjustments in production strategy, the effectiveness of using seasonal storage through hydrogen to manage RES availability for resilience enhancement, highlights the need for adaptive management strategies that consider seasonal and weather-related variations in energy availability. The uncertainty of hydrogen storage development, hydrogen network and RES variability could be captured in future work.  

Lessons Learnt

Year 2022/2023: 

• Electrolysers provide flexibility to the system operator as a supplementary approach for system balancing by following the output of renewable energy sources such as wind and PV and to provide ancillary services such as frequency response and network constraint management services. As flexibility providers, electrolysers will compete with other flexibility technologies such as demand response, and/or energy storage.  
• High gas prices will shift the hydrogen production from blue to green hydrogen. This will require additional investment in low-carbon generation and other supporting infrastructure such as hydrogen storage and networks. However, shifting to green hydrogen will also reduce the need for carbon storage and offsetting residual emissions from hydrogen production processes.  

Note: The following sections are only required for those projects which have been completed since 1st April 2013, or since the previous Project Progress information was reported. 

Year 2023/2024: 

The optimal integration of electrolysers requires a holistic approach as the technologies create complex interactions across electricity and hydrogen energy systems. The silo approach in deploying and operating electrolysers risks additional system integration costs resulting in a higher cost that needs to be paid eventually by the energy system users.   
Many aspects around the location and operation of electrolysers need to be considered. For example, our studies have demonstrated that the allocation of electrolysers across the electricity transmission system of GB significantly impacts the investments in the onshore electricity transmission system of GB by 2050. The optimum locations of electrolysers are mostly driven by wind power, in Scotland,  South Wales, Southwest, and Southeast England. Moreover, electrolysers  have many functionalities that provide flexible services for the electricity and hydrogen systems, enabling more cost-effective integration and reducing the curtailment of low-cost intermittent renewable energy sources such as wind and solar power. Electrolysers also improve system balancing  and can be dispatched for network congestion management by shifting energy transport from electricity to hydrogen, utilising the existing gas network capacity. Electrolysers also provide the capacity to produce green hydrogen from low-carbon sources interacting with other hydrogen production technologies from reforming or gasification processes. Therefore, future projects must consider the whole-system approach when analysing the benefits and impacts of electrolysers. 
Enhanced engagement with key stakeholders from wider industry and academics will be beneficial to maximise the impact of research/studies on the market and policy development.

Dissemination 
The key findings and results of the project will be disseminated via a conference or journal paper, and a dedicated dissemination workshop with key industry stakeholders in the summer.