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Electrolyser

Electrolyser Electrolysis hydrogen power-to-gas electricity consumption flexibility Industry

An electrolyser is a plant that uses electrical energy to force a chemical reaction. In the energy sector, this almost always means water electrolysis. In this process, water is split into hydrogen and oxygen. The process itself is called electrolysis; the electrolyser is the technical plant for it. The hydrogen produced can serve as a raw material, as a fuel or as a storable energy carrier. If it is produced with electricity from renewable energy and the applicable proof requirements are met, it is called green hydrogen. In the EU, it is legally referred to as renewable fuel of non-biological origin (RFNBO).

The most important technical parameter is electrical power. It is stated in kilowatts or megawatts, and for very large plants also in gigawatts. It indicates how much electricity the plant can take up at a given moment. The quantity of hydrogen produced, by contrast, is stated in kilograms, tonnes or energy units. One kilogram of hydrogen contains around 33.3 kilowatt-hours of chemical energy based on the lower heating value, and around 39.4 kilowatt-hours based on the higher heating value. Today's plants need significantly more electricity for this. In an example for a 100-megawatt plant, the EU Joint Research Centre (JRC) assumes 55 kWh per kilogram at system level and 49 kWh per kilogram for the cell stack alone. This corresponds to a system efficiency of about 60 percent based on the lower heating value. An analysis by the US Department of Energy for PEM plants assumes an average of around 57 kWh per kilogram over the lifetime, because the cells age. Values of roughly 50 to 60 kWh per kilogram are therefore a realistic range for low-temperature electrolysers. When looking at such figures, however, one must check whether they refer only to the stack or to the whole system including auxiliary equipment such as rectifiers, gas purification and cooling. Compression for transport or storage often comes on top of this. The difference between the electricity input and the chemical energy arises mainly as heat.

An electrolyser is therefore not an electricity store in the narrow sense, like a battery. It converts electricity into another energy carrier. This can be stored, transported and used later, but every further conversion costs energy. If the hydrogen is later converted back into electricity, for example in a fuel cell or a gas-fired power plant, the overall efficiency is significantly lower than with direct use of electricity or in a battery storage system. An electrolyser therefore makes sense above all where hydrogen itself is needed, or where electricity cannot be used directly in terms of time, location or in another sector.

Technical variants and mode of operation

There are several electrolysis technologies:

  • Alkaline electrolysers work with an alkaline solution as the electrolyte. They have long been proven in industry and are suitable for large plants.

  • PEM electrolysers work with a proton exchange membrane. They react quickly to load changes and are therefore regarded as well suited to fluctuating electricity from wind and sun. In return, they require catalysts containing precious metals such as iridium and platinum.

  • High-temperature electrolysers (solid oxide, SOEC) split steam at several hundred degrees Celsius. If steam or waste heat from an industrial process is available, electricity demand falls significantly. Manufacturers then quote values of around 40 kWh per kilogram or less. However, the technology is tied to heat sources and steady operation and is still less widespread.

  • Anion exchange membrane (AEM) electrolysis combines features of alkaline and PEM technology. It is still mostly in early development and commercialisation phases.

For the power system, the technical flexibility of an electrolyser matters. However, it is not the same as economic flexibility. A plant can change its output quickly in technical terms and still depend on high utilisation. Electrolysers are capital-intensive. If they run only a few hours a year, investment, grid connection, staff, maintenance and financing are spread over little hydrogen. The hydrogen then becomes expensive, even if electricity is cheap during those hours. If, on the other hand, the plant runs very often, it inevitably also draws electricity in hours with higher prices or scarce renewable generation. Frequent ramping up and down can also accelerate the ageing of the cells.

This is therefore no longer just about the simple idea of using cheap surplus electricity. It is about a trade-off between electricity price, utilisation, grid charges, support rules, hydrogen offtake and storage needs. An electrolyser is a flexible consumer if its operation can respond to price signals, grid situations or renewable generation. Merely because it produces hydrogen, it is not automatically beneficial to the system.

Distinction from electrolysis, power-to-gas and hydrogen

Hydrogen is the product of an electrolyser, but not all hydrogen comes from electrolysis. Worldwide, it has so far been produced overwhelmingly from fossil sources. According to the International Energy Agency (IEA), hydrogen production consumed around 290 billion cubic metres of natural gas and about 90 million tonnes of coal equivalent in 2024. Natural gas is mostly converted by steam reforming, while coal is gasified mainly in China. Low-emission hydrogen accounted for less than one percent of production. Globally installed electrolysis capacity stood at around 2 gigawatts at the end of 2024. An electrolyser alone does not make hydrogen climate-neutral. What matters is the origin and timing of the electricity used.

Power-to-gas is the broader context in which electricity is converted into gaseous energy carriers. This can be hydrogen or synthetic methane, if hydrogen is methanated with CO₂. The electrolyser is a possible core plant in this, but not the whole system. It also includes water treatment, power electronics, compression, cooling, storage, safety technology, pipelines, metering concepts and offtakers. For large projects, integration into electricity grids, hydrogen networks, industrial parks or ports is added.

The distinction from the battery is also important. A battery stores electricity in the short term with high efficiency and releases it again as electricity. An electrolyser, by contrast, produces a chemical energy carrier. This can be used in steelworks, refineries, the chemical industry, shipping or as long-term storage over weeks and seasons. For short-term fluctuations in the grid, a battery is usually more efficient. But where molecules are needed, a battery cannot replace hydrogen.

Why electrolysers matter in the power system

Electrolysers connect the electricity sector with parts of industry, transport and heat supply that cannot simply be electrified directly. In steelmaking, hydrogen can replace carbon as a reducing agent. The chemical industry needs hydrogen for ammonia, methanol and other basic materials. Refineries already use it today, but so far mostly produced from fossil sources. If this demand is to be met from renewable sources in future, additional electricity consumption arises on a considerable scale.

For the power system, it is not only the amount of energy that matters, but also its timing. It influences grid load, generation requirements and market prices. A worked example: An electrolyser with 100 megawatts and 4,000 full-load hours per year consumes around 400 gigawatt-hours of electricity. At 55 kWh per kilogram, this yields about 7,300 tonnes of hydrogen. At 8,000 hours, consumption and production roughly double. It makes a big difference whether these hours fall mainly during strong wind and low prices or whether the plant draws electricity almost continuously. The annual quantity alone says little about the effect on the residual load, on grid bottlenecks and on the need for power plants.

Electrolysers can provide flexibility if they can shift their production in time and a hydrogen storage facility or flexible offtakers are available. A steelworks with continuous hydrogen demand leaves the electrolyser little room for manoeuvre, unless a sufficiently large store lies in between. A project at a wind site can use electricity that would otherwise be affected by curtailment. Even so, it needs reliable rules for electricity procurement, hydrogen transport and offtake. Flexibility arises from the whole chain, not from the electrolyser alone.

Legal framework in the EU and Germany (as of November 2026)

In the EU, Delegated Regulation (EU) 2023/1184 sets out when electricity used to produce RFNBOs, i.e. as a rule hydrogen from electrolysis, counts as fully renewable. The rules also apply to hydrogen produced outside the EU and imported. The renewable electricity can come from a directly connected plant or from the grid. For grid electricity, three requirements mainly apply. First, additionality: the electricity supply contracts must generally relate to new wind or solar plants that entered operation no more than 36 months before the electrolyser. Second, temporal correlation: until the end of 2029 it is sufficient for generation and consumption to fall within the same calendar month; after that, hourly matching applies. Third, geographical correlation: electricity generation and electrolyser must in principle be located in the same bidding zone. There are exceptions, for example for bidding zones with a renewable energy share of over 90 percent. In addition, transitional rules on additionality apply to plants commissioned before 2028. More on this can be found under additionality criterion for green hydrogen.

In Germany, under Section 118(6) of the Energy Industry Act (EnWG), electrolysers are exempt from grid charges on electricity purchases for 20 years from commissioning if they enter operation by 4 August 2029. For plants entering operation later, the current legal situation does not provide for this exemption. The Federal Network Agency (Bundesnetzagentur) is working on a reorganisation of the grid charge system. This also includes discussion of whether and how electrolysers at grid-serving locations will be relieved in future. What the successor arrangement will look like was still open at the time of editing. A further instrument is the rule "use instead of curtail" ("Nutzen statt Abregeln") under Section 13k EnWG. It can create incentives for additional consumption in congested regions.

Common misunderstandings

A widespread misunderstanding is that electrolysers would only use surplus electricity. With growing shares of wind and solar energy, there are indeed hours with very low prices and regionally curtailed electricity. However, these quantities are not automatically enough to operate large plants economically. Curtailed electricity is also often linked to grid bottlenecks. An electrolyser must therefore be in the right place, be technically available and have an offtaker for the hydrogen. Otherwise, a theoretical surplus quantity does not become a viable business model.

A second misunderstanding concerns losses. Hydrogen from electricity is worse in energy terms than direct electrification. It does not follow, however, that electrolysers are superfluous. For heat pumps, electric cars and many low-temperature processes, direct use of electricity is usually better. For certain industrial processes, basic chemicals, long-term storage and some transport segments, hydrogen can nevertheless be the appropriate solution. The assessment depends on the application, not on a blanket comparison of efficiencies.

A third misunderstanding concerns installed capacity. The announcement of a one-gigawatt electrolyser says little about the actual quantity of hydrogen as long as full-load hours, electricity procurement, grid connection, location and offtakers are unclear. Many announced projects have also been postponed or cancelled. In 2025, the IEA lowered for the first time its expectation of the production possible by 2030 from announced projects. For the climate effect, it also matters which fossil hydrogen production or which fossil fuel is actually displaced. If the additional electricity demand is not covered by additional renewable generation, emissions and costs shift into the electricity sector.

Institutional and economic integration

Electrolysers sit at the interface of several sets of rules. As electricity consumers, they are affected by grid charges, levies, taxes, connection conditions and metering concepts. At the same time, they produce an energy carrier to which guarantees of origin, sustainability criteria, support programmes, transport rules and supply contracts with industry apply. Anyone who wants to understand the effect of an electrolyser must know the rules that remunerate, limit or favour its operation.

The choice of location shows these dependencies particularly clearly. An electrolyser close to large renewable generation can reduce grid bottlenecks and use electricity that would otherwise be hard to transport away. A location close to industry saves costs and losses in hydrogen transport. A location with good hydrogen storage allows more flexible operation. These aims do not always coincide. Conflicts arise where the electricity grid, hydrogen infrastructure, industrial demand and market rules each point to different locations.

The electrolyser thus stands for a central shift in the energy transition: electricity is increasingly becoming the basis of other energy carriers and of industrial value creation, a core element of sector coupling. This increases the need for renewable generation, grid expansion, storage and clear rules for flexible demand. The term therefore does not describe a machine on the margins of the power system. It describes a controllable large consumer that converts electrical energy into chemically usable energy. How valuable it is depends on whether this conversion is organised in a technically sound, economically viable way that fits the system.

Sources

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Edited by eCMS on 11.11.2026 19:44

© 2026 Erik Schmidt. All rights reserved. Quotations with a link to the source are welcome.