Benefits From Islanding Hydrogen Production in Renewable Energy Systems

The sustainable transition to a net-zero economy may require large quantities of low-cost clean hydrogen. In a fully renewable energy system, coproduction of electricity and green hydrogen may provide synergies (such as flexible demand, reduced renewables curtailment). On the other hand, separating electricity and hydrogen production could offer advantages (such as better renewable resources and less onerous power quality requirements for power electronics). We quantify the potential synergies of "integrated" electricity and hydrogen production versus stand-alone ("islanded") production of hydrogen in systems entirely powered by wind and solar. We explore the trade-offs for several countries, including Germany, Spain, Chile, Australia and the United Kingdom, in a simple six-node model that enhances analytical understanding. Our findings show that integrated hydrogen production is the lowest cost solution when hydrogen demand is low (less than 20% of final energy). At high shares of hydrogen demand (80% of final energy), islanding electrolysers can result in system cost reductions of up to 9%. These results are especially relevant for countries that export hydrogen, as it suggests that they should deploy electrolysers primarily in islanded settings.