Compounding or Curative? Investigating the impact of electrolyzer deployment on congestion management in the German power grid

Integrating large amounts of hydrogen production capacities for decarbonizing energy-intensive industries in Germany can be challenging for transmission system operators. This research investigates interactions of hydrogen production deployment pathways and associated congestion management policies with the operation of the German electricity transmission system for future market projections. Hydrogen electrolysis imputes additional electricity loads above conventional levels. A scenario framework is created representing different geographic electrolyzer deployment pathways and congestion management regulations for electrolyzer operation. Fundamental electricity market modeling and load flow optimization are proposed to evaluate resulting congestion management volumes to resolve grid bottlenecks associated with the market clearing dispatch. Overall results of this work highlight the importance of designing congestion management frameworks that enable efficient utilization of electrolyzers as a redispatch capacity, primarily if a demand-oriented deployment of electrolyzer installations near energy-intensive industries is assumed to support renewable energy integration. Differences in congestion management cost between demand- and supply-oriented deployment pathways of electrolyzer capacity lie in the range of 0.77–0.97 bn Euro if electrolyzers cannot be redispatched but almost diminish to 0.10–0.21 bn Euro in the scenarios that include electrolyzer as a redispatch capacity. The findings of this work assist policymakers and regulators with valuable insights into design options for future congestion management frameworks.