The potential of combined electricity and hydrogen generation in the energy system: the case of the Slovak Republic

Abstract

The European Commission announced that the 37% funding was going to be invested in the European Green Deal objectives, including one of the “lighthouse” European project – hydrogen. The deeper decarbonisation requires the broader use of renewable energy and renewable hydrogen. It should lead to a half capital cost reduction of electrolysers in 2030. Slovakia has three problems that can be solved by hydrogen. CO2 emissions, poor air quality and problematic integration of the variable renewable sources. Hydrogen has the potential to solve all three problems not only in Slovakia, however, globally. The main objective of this master thesis is to assess the ability of a large-scale Power-to-Hydrogen plant to generate the renewable electricity to the grid, when it is needed, for the market price and to produce the renewable hydrogen, when the electricity demand is low, in order to make the renewable hydrogen commercially competitive. The synergy between the variable renewables and the electrolysers offers production-side flexibility that allows to transform the variable renewables to the flexible ones and to replace the fossil-based hydrogen by the renewable one in the industry, mobility and heating. The purpose of this thesis is to provide the overview of the role of hydrogen to decarbonise the energy systems, to explain the reasons why Slovakia lags the binding renewable energy targets for 2020 and to propose a hydrogen way to meet the national objectives in 2030. The thesis also estimates the hydrogen deployment potential in Slovakia, it counts both the current and the future demand for the renewable hydrogen and estimates the adequate capacity of the renewable energy sources needed for the renewable hydrogen production. Finally, the case study assesses a 150 MW wind farm directly supplying the 50 MW electrolyser with the renewable electricity in three differentdemand-supply scenarios in the conditions of the south-west Slovakia. In all scenarios, the retrospective simulation is used to prove that the renewable hydrogen can be produced without subsidies under the price of € 4/kg based on the market prices in 2019. Results show that the wind farm in the low wind conditions is profitable without the need of any subsidies, however, the fixed minimal price is needed to avoidmore and more often curtailments. The electrolyser can offer this minimal price through the fixed electricity purchase contract. However, the electrolyser is not able to produce hydrogen under the price of € 4/kg in any of 3 the assessed scenarios. The profitable operation without the side earnings requires a capital expenditure subsidy on electrolyser of 23% - 42% depending on the scenario.