FCH-02.10-2014 - Demonstrating the feasibility of central large scale electrolysers in providing grid services and hydrogen distribution and supply to multiple high value markets
Specific challenge: A recent FCH JU “Development of water electrolysis in the European Union” has acknowledged both the potential and importance of using central large scale electrolysis for provision of grid balancing and energy storage purposes in European regions with increasing share of intermittent renewable energy. Intelligent operation of the electrolyser in periods with excess or lack of renewable electricity production could help balance the grid and store energy.
This conceptual use of electrolysis is however faced with several challenges that are to be addressed by large scale demonstration. As for existing technologies such as central power plants the use of electrolysis for provision of grid balancing services alone is not sufficient for a feasible business case. Where power plants needs several electricity production hours per year to supplement grid balancing revenue, electrolysis needs multiple high value markets where the produced hydrogen can be stored, distributed and used. This is in particular of importance if green electrolysis hydrogen is to be cost competitive with central SMR fossil production.
Recent years of R&D have significantly improved the production ramp up and down flexibility of electrolysis technology and improved the scalability from kW to MW size. What is still lacking is large scale infield demonstration as sites where both multiple grid services are required and where hydrogen at the same time can be distributed and offered for multiple high value markets, such as e.g. industrial gases, transport fuel and power-to-gas. Only such applications can provide both the scale for providing grid balancing and reaching cost levels where additional revenue can be generated from hydrogen distribution and sales.
Little evidence has been gathered yet of the way electrolysers could operate to maximise their benefits to the grid and revenues from hydrogen supply to multiple markets.
This demonstration call seeks proposals which demonstrate state of the art electrolyser technologies providing and receiving revenue by providing these balancing services, whilst distributing (and receiving revenues from) hydrogen for high value markets.
Scope: The objective of the project is to deploy and monitor state of the art (2015) electrolyser systems and supporting hydrogen distribution and supply systems configured to attract revenues from grid services in addition to providing hydrogen for multiple high value markets.
The scope of the project should include efforts such as:
• Large scale electrolyser in excess of 1 MW must be tested in order to be in relationship with the grid scale. Power installed should be duly justified along with the advantages offered to the grid and the resulting long term business model
• This topic focuses on the inclusion of specific improvements of the current SoA related to the electrolyser operation under partial loads, quick response, system for reserve and frequency response services, forecasting models for electricity price and renewable energy production
• The technology must demonstrate an electricity consumption of 55 - 60 kWh/kgH2; capital cost of 930 EUR/kW for alkaline electrolysers and 1,570 EUR/kWh for PEM electrolysers. Those target costs do not include the specific tailoring of the electrolysis to be compatible with the grid services to be brought
• Electrolyser system operators will demonstrate that they are able to benefit from grid services revenue streams. Here, the consortium will demonstrate that they are able to obtain these revenues by entering into commercial contracts with the grid operators or utilities who value these services
• A comprehensive operation plan must be put in place. State of the art electrolysers and downstream systems must be installed and operated for a minimum period of two years
• Electrolysers systems will demonstrate a sufficient level of responsiveness to meet the requirements of the grid services they will seek to offer (e.g. rapid modulation, rapid start, as required by the services offered to the grid)
• Proportional scaled hydrogen distribution and supply systems for downstream provision of the produced hydrogen will be valuable strong added value for the proposal, as e.g. innovative hydrogen distribution concepts for industrial gas or transport fuel applications and/or power-to-gas. Correspondingly, the distribution and supply concepts for downstream hydrogen provision should show improvement on scale and current market utilization. In order to the hydrogen to final customers, activities may include the hydrogen distribution and supply systems and market access, such as innovative trailers and filling port and connection concepts at industrial gas customers. Safety of such innovative solutions shall be fully assessed, as part of the project. Additionally local hydrogen pipeline grids or power-to-gas applications can also be included
A technology neutral approach is envisaged, not precluding any of the different technologies. Furthermore, various technologies may apply in the same project and regulatory regimes, while strongly promoting cross-over learning, which enriches the knowledge obtained, provided sufficient information exchange among participating stakeholders and with the broader community is put in place.
Eligible consortia should reflect the value chain for the business case considered, such as for instance electrolyser and hydrogen technology developers, electricity grid operators, gas companies, HRS network operators, industrial hydrogen customers, utilities and energy companies. Specifically, the partnership must include strong links to:
• the necessary contractual and commercial expertise to access revenues from the grid services
• technical expertise for the design, provision and operation of the electrolyser and associated hydrogen distribution and supply technologies
• market access for downstream provision of hydrogen for high value markets such as industrial gas, transport fuel or power-to-gas
It will be valuable if consortia build upon already feasible business cases, so that potential customers (transport use, industry or utility) do not discontinue the use of the installation after project end, but on the contrary support continued market roll-out efforts.
Expected impact: The proposal is expected to demonstrate in an operational environment state of the art electrolysis technology configured to attract revenues from grid services in addition to providing hydrogen for multiple high value markets.
The consortium will ensure that actions are included in the project in order to generate learning and reach KPI and commercial targets, such as:
• Confirm and validate feasible operation of large scale central electrolysis, together with the necessary grid interfaces as well as hydrogen distribution and supply systems that captures revenue from balancing services and sale of hydrogen for multiple markets
• The environmental performance of the system – with a particular attention to the CO2 intensity of the hydrogen produced, which should include an understanding of the CO2 impact of the grid services mode selected and CO2 footprint impact in the addressed hydrogen end-user markets
• Techno-economic analysis of the performance of these systems
• Projections of the value and size of the markets addressed by provision of the grid balancing services and supply to multiple hydrogen markets
• Assessment and operation experience of the contractual and hardware arrangements required to access the balancing services and operate the electrolyser systems
• Assessment and operation experience, including safety, of the contractual and hardware arrangements required to distribute and supply hydrogen to multiple markets such as industrial gas, transport fuel and/or power-to-gas
• Assessment of the legislative and RCS implications of these systems and any issues identified in obtaining consents to operate the system
• Recommendations for policy makers and regulators on measures required to stimulate the market for these systems
Public-facing versions of these ‘lessons learnt’ reports should be prepared and disseminated across Europe and potentially wider