Model-supported economic evaluation of operating concepts for electrolysers in an energy system with high contingents of renewable energies

The international climate targets can only be achieved by generating more electricity using renewable energy sources. At the same time, flexible electricity consumers are needed to balance the fluctuating generation from renewables. As not all the electricity produced can be used directly, additional energy carriers are required as storage medium. Hydrogen that is produced by the flexible and controllable electrolysis of electricity and water is a versatile energy carrier, e.g. for the chemical industry or fuel cell electric vehicles. So far, this is not yet profitable, because the hydrogen production costs using electrolysis exceed those of competing methods. This could change under altered framework conditions and given the ongoing advances in electrolysis technology, which begs the question: Could hydrogen production using electrolysis be profitable in a future German energy system with high shares of renewable energies? To answer this question, electricity markets and the current market situation for flexible technologies are examined and developments in the field of hydrogen production and demand are presented. A fundamental simulation model is constructed to determine the future development of electricity market prices in different scenarios. The focus lies on two markets of relevance for operating electrolysers: the spot market for short-term electricity trading and the market for balancing power that allows the marketing of flexible loads. The prices on the market for balancing power are calculated using an approach based on opportunity costs. The simulated prices serve as input to an optimization model that maximizes the contribution margin of an electrolyser taking technical constraints into account. Different concepts are considered that include the direct sale of hydrogen, its reconversion into electricity as well as the provision of balancing power. The concepts are evaluated using the revenues and costs and the results used to answer the research question. Three scenarios selected from the literature depict different development pathways of the energy system as well as different values for the electrolyser's techno-economic parameters up to the year 2050. The scenarios differ with regard to the deployment of renewable energy sources and the prices for energy carriers among other criteria. It becomes clear that profitable operation of electrolysers will, if at all, only be possible in the long term, probably from 2030 onwards. To achieve this, the electrolyser's specific investment has to decrease and its efficiency has to increase or the framework conditions in the energy system must allow high full load hours of the electrolyser at low electricity costs. Operation is considered profitable if hydrogen can be produced via electrolysis at lower costs than conventional production methods. This is achieved in particular if the electrolyser is used to provide balancing power. Reconverting hydrogen into electricity is not profitable in most cases. However, electrolysis may become essential at an earlier point in time to meet climate targets. In this case, specific incentives are needed for its use.