The role of electrolysers in energy system: Energy markets, grid stabilisation and transport fuels

Short and long-term role of electrolysis for grid balancing is investigated in this report, followed by an analysis on the feasibility of implementing electrolysis in the energy system and their potential for gas market balancing. Firstly, a literature review is conducted to determine the state-of-the-art knowledge on using electrolysis for grid balancing. Secondly, based on Danish energy system models for 2020 and 2035, which can simulate the operation of electrolysis, the role of both alkaline and SOEC electrolysers is analysed in terms of electricity system balancing. Thirdly, different electrolyser capacities are simulated in 2020 and 2035 to investigate how electrolysis can aid the integration of for renewable energy, followed by a gas-grid balancing analyses. Finally, a comparison is made between SOECs and alkaline electrolysers in the 2035 system, due to the uncertainty of commercializing SOEC and in general terms the necessity for this technology.
The results show that with the implementation of SOECs in 2035, their participation in the balancing reserves is possible, but it will most likely not be required as there are number of other flexible technologies that could be used instead due to their better performance and lower costs. The investments in electrolysis should be driven by the need for meeting the transport fuel demand, as their biggest contribution is for fuel production rather than for renewable energy integration. The grid stability should be seen as an additional benefit from electrolyser integration.