Region-Specific Merchant Hydrogen Market Assessment and Techno-Economic Assessment of Electrolytic Hydrogen Generation: Cooperative Research and Development Final Report, CRADA Number CRD-18-00751

Utilities need to recover value from baseload and some renewable assets even when the electricity is curtailed. The declining cost of renewables (particularly solar), the persistently low-cost of natural gas, and the declining electricity demand, have all worked to lower the price of electricity. Furthermore, the baseload assets have a high turndown cost, which is not reflected in the low market electricity prices. One option for utilizing the curtailed electricity is hydrogen generation. One important aspect of this project will be to provide a “go/no-go” recommendation on the economic feasibility of pursuing hydrogen generation vs. other markets that could offtake curtailed electricity or nuclear steam. This project will specifically assess the opportunities for hydrogen production and use in the service territories of Southern Company Services (SCS), Exelon SBC, and Xcel Energy. Each utility partner represents a different mix of generation fleets: Exelon has significant nuclear assets, Xcel is primarily renewables (wind) with some nuclear, and SCS represents both a renewables fleet and a heavily baseload fleet, which includes significant nuclear. The Contractors will conduct the study of hydrogen market opportunities by first considering the approximate electricity demand and price profiles for the year, and power generation capacity that can be used to produce hydrogen. Therefore, a profile for hydrogen generation will also be developed to better understand the quantity and timing of hydrogen production. Once the hydrogen production schedule is estimated, hydrogen storage requirements can be determined. This effort will provide sufficient information to make a go/no-go decision on moving ahead with a detailed regional case study for hydrogen production in any of the three utility areas.