Hydrogen production is often presented as the default option for using surplus electricity from renewable generation. However, there is an investment merit order for coping with surplus electricity, said DNV GL in a new paper, highlighting that hydrogen is expected to play a significant role in the future European energy system, both inside and outside the electricity value chain.
As explained, renewable energy sources like solar-PV and wind, as well as the electrification of heating demand, lead to more variability in the generation and demand of electricity. This is expected to increase the need for flexibility in the electricity supply system, e.g. by energy storage.
Hydrogen has been a long-serving CO2-free energy carrier, apt to store energy over a long period of time without significant losses.
As such and although hydrogen production is not the first option to be built for using surplus renewable electricity because of competitive options, hydrogen produced from renewable energy is expected to become an economic energy carrier to complement electricity, accelerate the decarbonization of industrial heat and to provide long-term storage solutions.
The paper by DNV GL, entitled ‘Hydrogen in the electricity value chain’, shows, among others, that production of hydrogen from surplus electricity can compete with natural gas-based hydrogen production.
When produced in large quantities from electricity, electrolysis may become electricity price setting in the 2050’s. When it comes to hydrogen storage, subsurface hydrogen storage seems the most viable option for long-term, high-volume storage, the paper finds.
With this paper, DNV GL hopes to provide better insight into the potential role of hydrogen in the electricity value chain based on a structured, levelized cost approach,
…DNV GL said.
