To what extent can flexibility options reduce the need for hydrogen backup power plants?

Abstract

Achieving a carbon-neutral power system based on renewable energy sources is a critical step toward net-zero emissions before 2050. However, weather-dependent variability of renewable energy generation necessitates various flexibility options to balance supply and demand. In addition to storage, demand-side flexibility from sector coupling (e.g., electrification of heating, transport, and industry) plays a significant role. Yet, the need for supply-side flexibility, particularly through dispatchable hydrogen power plants, remains unclear. In this context, the article addresses the following research question: How much firm capacity from hydrogen power plants is needed to ensure security of supply in a 100% renewable power system? Using a case study for Germany based on an electricity market model-based approach, this paper analyses the impact of different flexibility options on the capacity needs of hydrogen power plants. The results indicate that at least 46 GW of hydrogen power plants are required in a scenario with strong sector coupling and demand-side flexibility. A lack of flexibility options could substantially increase this capacity requirement. The analysis concludes with the policy recommendation that Germany’s current power plant strategy is only an initial step, and more substantial market incentives are essential to ensure adequate firm capacity in a carbon-neutral energy system.