Hydrogen as an Energy Carrier

Using hydrogen to deliver electricity can make sound economic sense during demand peaks when power is scarce – if reversible power-to-gas systems are used. This is what a new study by the Mannheim economists Professor Stefan Reichelstein and Professor Gunther Glenk has ascertained.

The study, now published in the specialist journal Nature Communications,examines the economic efficiency of reversible power-to-gas systems in the contexts of the markets for electricity and hydrogen in Germany and Texas. Such systems have the advantage of working in two directions: When wind and solar electricity are available in ample quantities and electricity prices are lower, they can convert electricity into hydrogen. During periods of limited power supply, they can perform the reverse operation, converting hydrogen into electricity. 

“Green hydrogen is often still considered expensive and therefore unprofitable. But reversible systems have the potential to play a key role in securing a supply of clean energy in Germany,” notes study co-author Gunther Glenk.

Currently, the use of hydrogen is still associated with high costs, but this is because the systems deployed generally run in only one of the two possible directions. Gas turbines that generate electricity from hydrogen, for example, would only achieve relatively low utilization rates because deploying them to feed power into the grid is only economically feasible when the supply of wind and solar power is especially low, as for example on a gray winter day with calm weather. The rest of the time, these plants remain idle in standby mode. 

Reversible power-to-gas systems, in contrast, enable electric power production to plug gaps in the supply that emerge when wind and solar cannot meet demand and produce hydrogen for industrial customers in sufficient quantities. Such systems also reduce dependence on energy imports from abroad.

European companies are currently leading the way in the production of these systems. According to the study authors, the market for such systems still has considerable potential to evolve further. But it is clear that the more frequently these systems are installed, the cheaper they will become to produce – and the more likely it will become that hydrogen will be the energy carrier of the future.

Text: Yvonne Kaul / October 2022