Flexibility in electrolytic hydrogen production and use

Overview

We are seeking evidence to understand how flexible operation of electrolysers can be technologically and commercially delivered from the perspective of both producers and end users. Flexibility has the potential to unlock significant electricity system benefits, including reducing curtailment, alleviating grid stress,and improving overall efficiency of the power system.

The Hydrogen Production Business Model (HPBM) has been designed to incentivise low carbon hydrogen production across a range of technologies. Electrolytic projects need to meet the requirements of those offtakers to be commercially viable. Current evidence indicates that operating only during periods of surplus renewable generation is not commercially viable under existing business models.

The objective of this Call for Evidence is to explore what policy changes could incentivise electrolysers to respond more dynamically to price signals, while identifying any technical constraints that may limit such flexibility. We therefore request industry insight on technical constraints, optimal operating patterns, and commercial structures that balance flexibility with reliable hydrogen supply (potentially utilising large scale hydrogen storage) and investor confidence.

This evidence will inform future policy design, including Hydrogen Allocation Rounds ensuring electrolyser deployment supports both electricity system resilience and long-term decarbonisation goals.