Are electrofuels a sustainable transport fuel? Analysis of the effect of controls on carbon, curtailment, and cost of hydrogen

Variable renewable electricity (VRE) decarbonises the electricity grid, but its intermittency leads to variations in price, carbon intensity, and curtailment over time. This has led to interest in utilising difficult to manage electricity to produce electrofuels (such as hydrogen via water electrolysis) for transport. The vast majority of the environmental impact of electrofuels is contained in the electricity they consume however, only consuming otherwise curtailed electricity (produced when supply exceeds demand) leads to prohibitively expensive hydrogen due to low run hours. Using a model which bids for wholesale electricity, two operational strategies (controls) aimed at increasing sustainability without requiring policy changes were tested in electricity system models of 40-60% renewable electricity penetration. (1) Bid price control set a maximum price the plant will pay for electricity. (2) Wind forecast control dictated that the plant may only run when a minimum forecast VRE production is met. It was shown that sourcing electricity at times of low cost or high forecast wind power can lead to more decarbonised hydrogen production (up to 56% more) at a lower cost (up to 57% less). When economically optimised (minimising levelised costs) the bid price control reduced the carbon intensity of the electrofuel produced by 5-25%, and the wind forecast control by 14-38%, compared to the grid average. Both controls demonstrated a high proclivity to utilising otherwise curtailed electricity and can be said to aid grid balancing. The bid price control also greatly reduced the average cost of electricity to the plant. The positive impacts increased with renewables penetration, and significant synergies between economic and environmentally conscious operation of the plants were noted. The operational strategies tested in this paper allow for transport fuels to be produced from grid electricity, without exacerbating the mismatch of supply and demand. Future decentralised quasi-storage using these operating strategies may economically produce transport fuel, and aid grid balancing.