Power-to-gas plants and their role in the electricity balancing market

This LAP is concerned with the status of, and legal coverage for, Power to Gas systems operating to provide ancillary services and specifically for demand side load balancing services


Balancing and Ancillary Services Markets. Balancing refers to the situation after markets have closed (gate closure) in which a TSO acts to ensure that demand is equal to supply, in and near real time.
An important aspect of balancing is the approach to procuring ancillary services.
Is it a barrier?
Type of Barrier
Operational barriers
Assessment Severity
No significant impact for electrolyser services in the demand balancing sector – but it does not permit formal P2G operation due to the low (0.1%) hydrogen content permitted for the gas networks


Question 1 Are electrolysers able to participate in the 3 ancillary services? If yes, please specify.
Electrolysers can qualify for existing UK National Grid service tariff providing frequency control for demand side loads, thereby fully utilizing surplus renewable energy supply, at times when supply exceeds demand, and avoiding curtailment of renewables and enabling increased capacity of renewable energy to be deployed on the grid. They can also participate in other services except those that require power generation. They can participate in Frequency Response (FFR, EFR), Short Term Operating (FCDM), Demand Turn Up (DTU) and a subcategory of Short Term Operating Reserve (STOR) providing they exceed the minimum (aggregate) power demand and minimum responsiveness. They cannot participate in Mandatory Frequency Response (MFR) which is for large generators. The UK has a division between National Grid as the SO for England and Wales while there is a separate SO for Scotland and Northern Ireland with grid balancing roles. Note however that this is for the electrolyser based service only and DOES NOT encompass P2G activities with hydrogen injected into DNO or TNO gas grid network (or independent network) where the current hydrogen concentration is limited to 0.1%.
Describe the comparable technology and its relevance with regard to hydrogen
Renewables – wind and solar and battery storage

National legislation:

  • Electricity Act 1989
    Provided for electricity market supply and to make new provision with respect to the supply of electricity through electric lines and the generation and transmission of electricity through networks and connections to those networks. It also provided for the set up of the System Operator (SO – and for the UK the National Grid is the SO), Transmission Network Operator (TNO), Distribution Network Operator (DNO) and also the generating system and balancing obligations to be provided and managed as ancillary services by the SO
  • National Grid
  • Utilities Act 2000
    Provides for the establishment and functions of the Gas and Electricity Markets Authority and the Gas and Electricity Consumer Council; to amend the legislation regulating the gas and electricity industries – subsequently Office for Gas & Electricity Markets (OFGEM)

EU Legislation:

  • Directive 2012/27/EU of the European Parliament and of the Council of 25 October 2012 on energy efficiency
    This Directive establishes a common framework of measures for the promotion of energy efficiency within the Union in order to ensure the achievement of the Union’s 2020 20 % headline target on energy efficiency and to pave the way for further energy efficiency improvements beyond that date.

    It lays down rules designed to remove barriers in the energy market and overcome market failures that impede efficiency in the supply and use of energy and provides for the establishment of indicative national energy efficiency targets for 2020.
  • Commission Regulation (EU) 2017/2195 establishing a guideline on electricity balancing
    This Regulation lays down a detailed guideline on electricity balancing including the establishment of common principles for the procurement and the settlement of frequency containment reserves, frequency restoration reserves and replacement reserves and a common methodology for the activation of frequency restoration reserves and replacement reserves.