The role of hydrogen. Facts about System Integration from ENTSO-e
Hydrogen is enjoying a period of renewed attention in Europe and around the world. Yet, hydrogen currently represents a modest fraction of the global and EU energy mix and is still largely produced from fossil fuels – notably natural gas and coal – resulting in the release of 70 to 100 million tonnes of CO2 annually in the EU. For hydrogen to contribute to climate neutrality its production needs to expand to a much larger scale, become fully decarbonised and find a cost-effective place in the electricity system.
Hydrogen is a tool for reaching decarbonisation targets and not an end in itself. It should be benchmarked against other available options.
An overarching objective of the EU is to reach carbon neutrality by 2050 to remain in line with the Paris Agreement. To do so, Europe must reduce its GHG emissions by at least 55 % by 2030. Hydrogen in its fossil form (‘grey’ or ‘black’ hydrogen) has been used as a feedstock in industries such as petrochemicals and fertilisers for many years. The widespread use of a new decarbonised form of hydrogen across different sectors must be benchmarked against other possible options that could have the same decarbonisation impact.
Decarbonising the already existing hydrogen demand will be key in accelerating technological maturity, reducing costs and rapidly extending its deployment into other harder to reach applications and sectors.
Some specific applications of hydrogen, including in the steel, chemical, aviation and shipping industries, are considered hard to abate. In these cases, the use of electricity or other forms of renewable energy is not technically possible or cost-efficient. These sectors can be decarbonised with hydrogen. Furthermore, from an energy system perspective, hydrogen can play a role as an energy carrier in long-haul heavy-duty road transportation and as a long-term storage solution that contributes to the adequacy and security of supply.
It is imperative to develop the business case to use hydrogen in an electricity system operation support function. This business case does not currently exist.
Nevertheless, future hydrogen system elements need to be planned today. Their viability, as well as impact on electricity grids, is caseand countrydependent; no “one size fits all” conclusions can be applied. Each use case must be analysed within its entire framework, boundary conditions and externalities. Such analysis goes beyond ENTSO-E activities.
A properly designed regulated environment is necessary to support the development of hydrogen technologies, especially in the early phase when the market is not yet ready to invest.
Ownership and operation of electrolysers are investor-driven, TSOs should, however, be involved in line with the legal framework, especially during the take-off-phase. Furthermore, TSOs and regulators should be involved in designing the integrated energy system’s architecture, including the size, type and location of the electrolysers.
Scale up new technologies and step-up R & D efforts
This will be critical to unlocking an integrated energy system’s full potential by optimising the use of existing infrastructure, ensuring secure and reliable operation of electricity networks despite energy transition challenges and operating optimally across various sectors and technologies without increasing the overall energy system’s CO2 emissions, thus achieving a climate-neutral Europe.
A unified system perspective (one system view) is necessary.
As much as possible, RES energy should be used directly in a clean form of electricity to avoid transformation losses from converting electricity into other carriers and/or a gas for storage. This is a precondition to establishing a secure, energyand cost-efficient integrated energy system.
Making hydrogen a flexibility provider to the electrical system will require structural investments beyond the electrolysers (hydrogen grids and storage).
The need for flexibility in the electrical system is rising as additional RES are being connected. By allowing the flow of electricity between regions, the electricity network itself provides flexibility. Further flexibility can be provided by a portfolio of complementary technologies such as flexible power plants, flexible electricity demand, and pump-hydro/electricity-storage. Hydrogen fired power plants will be capable to provide electricity on demand and thus play a role in maintain today’s security of supply standard in a future RES-based energy system. Moreover, electrolysers capable of meeting current flexibility requirements, when they are connected to the electricity grid, are among the new technological solutions offering flexibility services for the power system. To become a flexibility provider for the electricity system, the hydrogen system will require its own structural investments in flexibility such as a hydrogen grid and storage, downstream of the electrolysers.
The location of electrolysers is a strategic structural question. Appropriate coordination between hydrogen and the electric network system operators is needed to ensure that new assets effectively decarbonise the system without increasing costs.
The location of an on-grid electrolyser determines whether electricity or hydrogen must be transported from the RES generation site to hydrogen demand centres. Defining for each asset the best location will depend on different factors such as the availability of cheap and abundant RES, transport options (electricity or molecules), industry’s commitment to use and store hydrogen, the supply’s energy security and infrastructure efficiency. Electrolysers’ locations will play a crucial role in how they interact with the electrical system and whether they cause or relieve potential network bottlenecks and congestion. Hence, the installation and system supporting operation of electrolysers should be incentivised at locations suitable for this purpose.