Optimizing an Integrated Solar-Electrolysis System: Cooperative Research and Development Final Report, CRADA Number CRD-18-749

Electrolysis powered by renewable sources provides a range of potential values such as carbon-free fuel for power, heat, or transportation; storage; and ancillary grid services. Each of these potential benefits has been studied as individual value streams. However, real-world demonstrations of these benefits working in concert are limited in the United States today as electrolyzers lack access to wholesale electricity prices. High power prices make electrolysis uncompetitive compared to traditional steam methane reformation (SMR). A potentially cost-effective way to demonstrate the value of renewable electrolysis is by powering an electrolyzer directly from a renewable generation source rather than from the electric grid. Integrated with a renewable generation source, the cost of fueling an electrolyzer is the opportunity cost of not selling power from the renewable plant to the grid – effectively, the wholesale electricity price. Additionally, an electrolyzer tied directly to a renewable generator potentially reduces excess generation and increases the value of the ancillary services that the renewable generator can provide to the grid.