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Demonstration of large electrolysers for bulk renewable hydrogen production - FCH-02-5-2017
Deadline: 20 Apr 2017   CALL EXPIRED

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 Bioenergy
 Raw Materials
 Energy Efficiency
 Renewable Energy
 Sustainable Development
 Biofuels
 Chemicals
 Industrial Engineering

Specific Challenge:

The increase of intermittent renewable electricity (solar and wind) raises the need for more flexibility in the power market and falling costs of renewable power open up the possibility to generate hydrogen at large scale from renewable power through electrolysis. Several sectors, namely the steel, refineries, chemistry, transport and even the natural gas sectors are exploring the reduction of their CO2 footprint by incorporating large quantities of renewable hydrogen in their processes.

This topic aims to demonstrate a large scale electrolyser generating bulk renewable hydrogen for use in one or a combination of these sectors. The electrolyser technology should be further up scaled, in view of reducing investment costs by economies of scale and developed to operate flexibly when power prices are low and provide grid balancing services.

The challenges addressed by the project are:

  • Demonstration of a large electrolysis unit (min 10MW) using the latest available technology with a very low capital investment;
  • Providing large quantities of renewable hydrogen on a commercial basis for targeted large scale applications, or within industries or in the transport;
  • Demonstrate the value of the flexibility of the electrolyser on a commercial basis by providing advanced grid balancing services;
  • Integration of a large scale flexible hydrogen production unit with the end user demand profile.

Recent years of R&D have significantly improved the production ramp up and down flexibility of electrolysis technology and improved the scalability from kW to MW size. What is still lacking is large scale infield demonstration at sites where both grid services are required and where hydrogen can be valorized in large quantities. Only such applications can provide both the scale for providing grid balancing and reaching cost levels where additional revenue can be generated from hydrogen distribution and sales.

Scope:

This Innovation Action seeks proposals which demonstrate improved electrolyser technologies beyond actual state-of-the-art producing hydrogen with favorable economic conditions, e.g. when power prices are low, when additional revenue can be generated by providing high value grid balancing services and where the CO2 reduction footprint can be valorized.

The scope of the project is:

  • To develop a new large scale electrolyser of minimum 10 MW of sufficiently rapid response time (of the order of a few seconds), to participate in the existing primary and secondary grid balancing markets and explore possibilities of more advanced grid services. The installed power and operating regime should be duly justified to identify the advantages offered to the grid within the long term business model. The hydrogen purity should meet the application requirements. The output pressure shall be designed to fulfill, when possible, the required pressure for the hydrogen application targeted - including buffer storage needs if any - and reduce as far as possible the need for dedicated hydrogen compression units downstream. Storage and compression are not in the scope of this topic;
  • To demonstrate a minimal footprint of the electrolyser, with a single balance of plant including all required electrolysis utilities such as water purification, power rectification with suited grid interfaces, and hydrogen purification for delivery to the proposed application sector. The 10MW scale unit should be designed as a building block for the plants of the future. Industrial integration with certification attested by a Notified Body involvement should be included;
  • To focus on specific improvements of the current state-of-the-art related to the electrolyser operation under partial loads, quick response, system operation for providing reserve and frequency response services, forecasting models for electricity price and renewable energy production;
  • To demonstrate an energy consumption consistent with 2020 expectations of 48 kWh/kg @1000+/kg for PEM technology at nominal power [1];
  • To demonstrate a CAPEX for the electrolyser consistent with 2020 expectations of 1000 €/kW for PEM technology at nominal power. These target costs do not include the specific tailoring of the electrolysis to be compatible with the grid services to be brought;
  • To demonstrate the economic benefits of the project for the selected application. Here, the consortium will demonstrate that they are able to obtain these revenues by entering into commercial contracts with the chain stakeholders (e.g. grid operators or utilities) who value these services. The value could be demonstrated also by other means that confirms the revenue potential;
  • The proposal will indicate the operating scenarios, the duration of production, the quantities of hydrogen produced, the use foreseen and a detailed business case analysis. State of the art electrolysers and downstream systems must be installed and operated for a minimum period of two years;
  • Electrolyser systems will strive to demonstrate a sufficient level of responsiveness to meet the requirements of the produced hydrogen for the services offered and power price opportunities, (e.g. for rapid modulation, rapid start, frequency response, as required by the services offered to the grid); this will be done in collaboration with chain operators of the market sector identified;

Consortia will preferably build upon outcome from previous projects funded by the FCH-JU and on already feasible business cases, so that potential customers do not discontinue the use of the installation after project end, but on the contrary support continued market roll-out efforts. The proposal must include an initial plan for use of the installation after the project. The proposal is expected to address new applications than the one already supported (i.e. steel industry).

To address adequately the challenges of this project, the consortium should include at least the electrolyser manufacturer, the hydrogen end-user and a power services company or the local power grid operator.

Specifically, the consortium should include strong links to:

  • the necessary contractual and commercial expertise to access revenues from the grid services and/or power price opportunities;
  • technical expertise for the design, provision and operation of the electrolyser and associated hydrogen distribution and supply technologies;
  • market access for downstream provision of hydrogen in the selected application.

The capacity of the electrolyser should be linked to the budget via the cost KPIs in the MAWP but also reflect the specific tailoring costs for ensuring electrolysis is compatible with the grid services requirements. The grid connection costs, building costs and the electricity costs for the commissioning phase are eligible for the funding. Electricity costs during demonstration / business operation are not eligible. The results of a techno-economic assessment must be published after each year of operation, including information on the individual cost and revenue streams related to the electrolyser. The Technical report however should present these figures for techno-economic assessment purposes.

Storage/compression costs should not be included.

To be eligible for participation a consortium must contain at least one constituent entity of the Industry or Research Grouping.

It is expected that the technology starts at TRL 7 and reaches TRL 8 at the end of the project.

Any safety-related event that may occur during execution of the project shall be reported to the European Commission's Joint Research Centre (JRC), which manages the European hydrogen safety reference database, HIAD (dedicated mailbox JRC-PTT-H2SAFETY@ec.europa.eu).

The maximum FCH 2 JU contribution that may be requested is EUR 10 million. This is an eligibility criterion – proposals requesting FCH 2 JU contribution above this amount will not be evaluated.

Expected duration: 5 years

[1] Reference: Water Electrolysis in the European Union (2014) (http://www.fch.europa.eu/node/783 reference: page 11-13)

Expected Impact:

The proposal is expected to demonstrate in an operational environment improved electrolysis technology configured to attract revenues from grid services and/or power price opportunities in addition to providing bulk renewable hydrogen to an industrial scale hydrogen user.

The consortium will ensure that actions are included in the project to generate learning and reach KPI and commercial targets, such as:

  • Demonstrating feasible operation of large scale rapid response electrolysis and the integration the produced electrolytic hydrogen in an established industrial process;
  • Assessment and operation experience, including safety, of the contractual and hardware arrangements required to distribute and supply hydrogen to the specific industrial and / or transport market;
  • Implementation of the necessary grid interfaces to provide grid balancing services;
  • Perform techno-economic analysis of the performance of these systems;
  • Evaluation of the environmental performance of the system in alignment with the recommendations of the CertifHy project – with attention to the CO2 intensity of the hydrogen produced, which should include an understanding of the CO2 impact of the grid services mode selected and CO2 footprint impact in the addressed hydrogen end-user markets;
  • Projections of the value and size of the markets addressed by provision of the grid balancing services and supply to multiple hydrogen markets, not excluding the transport sector;
  • Assessment and operation experience of the contractual and hardware arrangements required to access the balancing services and operate the electrolyser systems;
  • Assessment of the legislative and RCS implications of these systems and any issues identified in obtaining consents to operate the system;
  • Recommendations for policy makers and regulators on measures required to stimulate the market for these systems.

Versions of ‘lessons learnt’ reports addressed to the public should be prepared and disseminated across Europe and potentially wider.



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