Financial Impacts of Flexible Green Hydrogen Electrolyser Operation in the Australian National Electricity Market

Hydrogen electrolyser loads pose to add tremendous demand to the Australian National Electricity Market (NEM) given the accelerating energy transition and opportunity for widespread decarbonisation. Accordingly, a consideration for flexible integration of future electrolyser loads is paramount while ensuring the energy consumed is considered ‘green’. This paper adopts a linear optimisation model to counterfactually investigate flexible participation strategies of these loads considering power purchase agreement (PPA) structures and the large-scale generation certificate (LGC) scheme in a case study utilising historical NEM data. It demonstrates both challenges and opportunities for flexible load operation given the ability to harness price lulls, but similarly be exposed through unmatched hedges given variable volume PPAs. Since the ability to maximise hydrogen production is limited in this study to the traded green-certificates under an assumed bundled PPA structure, this paper reveals benefit in pursuing dual PPAs with both solar and wind generators. Finally, the study yields a key question as to the certification of green-hydrogen and further need for methods to quantify temporal matching of generation and consumption.