There are two aspects of electrolyzer loads that make them valuable in providing grid services to utilities:
- Because the product (hydrogen) is storable, the load can be interrupted with relatively minimal economic impact to the project if the interruptions are for a limited number of hours over the year.
- Electrolyzers are very fast-reacting, especially the newer Proton Exchange Membrane technology.
These attributes make them a dependable source of flexibility that is normally provided by generation. For example, generating utilities need to keep some fraction of their generation out of the market, but available on very short notice to fill in if there is a system emergency (e.g., large generator or transmission line outage). These are called contingency (aka “operating”) reserves. Douglas County PUD is planning to use their electrolyzer to provide that service, freeing up their hydro generation to be used by their customers or marketed to other utilities.
Tacoma Power is actively working on a new “non-firm” tariff that would give electrolyzer (and other interruptible loads) some reduction in overall electric rates in exchange for offering to be turned off over some hours of the year at the utility’s option on short (or possibly no) notice.