Economic viability of a battery-electrolyser system for frequency response and hydrogen production

This paper explores the economic viability of using battery-electrolysers, specifically a lead-acid variant, within the UK's dynamic frequency response services. A battery-electrolyser combines the functionalities of a battery and an electrolyser into a single device capable of both storing energy and producing hydrogen. As the UK accelerates its transition to renewable energy sources, long-duration energy storage is needed for maintaining grid stability. The paper begins by outlining the current frequency response services-Dynamic Containment (DC), Dynamic Moderation (DM), and Dynamic Regulation (DR) and the dominance of battery-operated systems in these markets. The paper looks at the possible role of a battery-electrolyser in dynamic services. This paper presents results looking at the profitability of this technology in the UK's ancillary services market under five different scenarios. The findings indicate that while the battery-electrolyser is not economically viable under most scenarios due to high operational electricity consumption costs, a strategy that leverages free grid charging demonstrates profitability with a net present value exceeding £197 million over 10 years based on a 10MW plant. The paper concludes that while current market conditions do not favor the widespread adoption of battery-electrolysers, specific operational strategies may unlock their economic potential, particularly in the context of growing renewable energy capacity.