Hydrogen through electrolysis can convert excess electricity into hydrogen during times of oversupply. The produced hydrogen can be stored over short and long times and in large quantities in underground caverns, natural gas grid, and in hydrogen refuelling stations (HRS) tanks where the electricity stored and hydrogen consumption for re-powering and other applications is therefore decoupled and more renewable energy can be produced and integrated into the power system.
Therefore, its role within the currently debated electricity market design regulation and directive should be appropriately reflected and strengthened. Hydrogen Europe is thus participating in the ongoing debate on how this market design should look like in order to sufficiently represent the advantages that hydrogen technologies can bring.
Electricity Market Design
A level playing field…
…Between market participants
Most of the comments by Hydrogen Europe reflect the broader picture of the need of a consistent level playing field between all market-based resources (energy storage, demand side management & sectoral integration) to achieve Union’s internal energy market goals. For example, facilitating access to the network for new generation capacity and energy storage as well as sectoral integration facilities, in particular removing barriers that could prevent access for new market entrants and of electricity from renewable energy sources should be included in the directive. Furthermore, unless justified by a cost-benefit analysis, the procurement of non-frequency ancillary services by a distribution system operator shall be transparent, non-discriminatory and market based ensuring effective participation of all market participants including renewable energy sources, demand response, energy storage and sectoral integration facilities as well as aggregators.
…in the transport sector
Additionally, an article on the incorporation of sectoral integration into the electricity network would ensure consistency and level playing field between different recognised alternative fuels in the transport sector (in line with the Alternative Fuels Infrastructure Directive) as well as utilisation of sectoral integration facilities to decarbonise energy intensive industries.
Network tariffs should not discriminate against energy storage, which should not be treated as end consumer with regard to levies and taxes. Appropriate remuneration schemes should be developed as they provide grid services and integrate higher shares of variable renewable energy sources. They should also not create disincentives for participation in sectoral integration, demand response or represent an obstacle to improvements in energy efficiency.
…and without imposing interconnectors when inappropriate
Moreover, should the proper functioning of the internal market in electricity be achievable and economically more advantageous through the use of market-based resources such as energy storage, sectoral integration and demand response, Member States should be exempt from reaching the Union’s interconnector target.
Finally, a solid and consistent legal framework as a precondition for the hydrogen industry to develop and a hydrogen-based sectoral integration economy to become reality in EU.