Storing energy generated by solar and wind into batteries is not the only option available to address issues of reliable supply. Other forms of storage can more economically hold greater quantities of potential electricity than batteries. Hydrogen is one of these options, and it provides real promise.

Produced using an electrolyser with no emissions (green hydrogen), when burned the hydrogen produces only electricity and water. The technology to produce green hydrogen already exists, but does not operate at large scale. The challenge is not making hydrogen, but it economic. Electrolysers use a lot of energy to make hydrogen. If there is a large enough difference between the costs of buying green electricity to make hydrogen and the price at which hydrogen produced power is sold, then it can be done economically. This is possible in a system like South Australia where there is so much green power being supplied through the day that prices are now often negative – that is, an electrolyser actually gets paid to take power. At night, power prices rise because more expensive (but more reliable) generators switch on to meet demand. That’s when hydrogen generators cover the costs of producing the hydrogen and making green electricity.

Frontier Economics helped SA Labor design a world first large scale (250 MWe) electrolyser paired with a highly flexible gas generator (200 MW). The electrolyser would have a big enough load to help stabilise the grid in the middle of the day when there is surplus electricity and the generator is big enough to make a difference to prices at peak demand times when there is no solar generation. Government backing of this world first large scale plant combination will, like the Tesla Big Battery, propel the development of this technology. Frontier Economics’ modelling showed that this plant would reduce the wholesale electricity price in SA by 8%.

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