Opportunities for Flexible Electricity Loads such as Hydrogen Production from Curtailed Generation

Variable, low-cost, low-carbon electricity that would otherwise be curtailed may provide a substantial economic opportunity for entities that can flexibly adapt their electricity consumption. We used historical hourly weather data over the contiguous U.S. to model the characteristics of least-cost electricity systems dominated by variable renewable generation that powered firm and flexible electricity demands (loads). Scenarios evaluated included variable wind and solar power, battery storage, and dispatchable natural gas with carbon capture and storage, with electrolytic hydrogen representing a prototypical flexible load. When flexible loads were small, excess generation capacity was available during most hours, allowing flexible loads to operate at high capacity factors. Expanding the flexible loads allowed the least-cost systems to more fully utilize the generation capacity built to supply firm loads, and thus reduced the average cost of delivered electricity. The macro-scale energy model indicated that variable renewable electricity systems optimized to supply firm loads at current costs could supply 25% or more additional flexible load with minimal capacity expansion, while resulting in reduced average electricity costs (10% or less capacity expansion and 10% to 20% reduction in costs in our modeled scenarios). These results indicate that adding flexible loads to electricity systems will likely allow more full utilization of generation assets across a wide range of system architectures, thus providing new energy services with infrastructure that is already needed to supply firm electricity loads.