Electricity transmission operator ELES, gas system operator Plinovodi and Japan’s Yokogawa Electric signed a memorandum on Sept. 10 to develop a Slovenian hydrogen ecosystem and an initial demonstration project connecting electricity and gas transmission infrastructure.
The partners said the demonstration would examine a hydrogen plant interfacing with both networks and the digital systems required to coordinate their operation. Yokogawa will provide process-control and digital expertise, while ELES and Plinovodi will supply electricity and gas-system operating capabilities.
Electrolyser flexibility as the core operating variable
The project focus is described as operating flexibility of the electrolyser rather than hydrogen as a fuel. An electrolyser is characterised as a large electricity consumer whose output can, within technical and commercial limits, be adjusted in response to power-system conditions.
When renewable electricity is abundant, hydrogen production can increase, while consumption can be reduced when the electricity system tightens. The energy is not eliminated; it is shifted into another carrier that can be stored, transported or consumed later.
This approach is presented as enabling energy-value transfer not only across hours but also across infrastructure systems, which is described as uncommon for conventional industrial loads. The demonstration is intended to test how such coordination could work between electricity and gas networks.
Digital coordination for integrated power and gas operation
ELES and Plinovodi plan to study how electricity and gas infrastructure could be orchestrated as one operating system rather than operating independently with only an electrolyser connection. European energy strategies have discussed sector coupling for years, including in decarbonising industry and replacing fossil gas.
The memorandum identifies digital solutions for coordinated operation as part of the planned demonstration, with forecasting and control software highlighted as potentially comparable in importance to the electrolyser itself. An optimisation platform is described as being able to compare electricity prices, system balancing requirements, renewable availability, hydrogen storage levels, gas-network conditions, and downstream hydrogen demand.
The dispatch decision is described as potentially moving beyond whether today’s hydrogen selling price exceeds today’s electricity cost. It could incorporate the value of flexibility supplied to the electricity system, creating multiple potential revenue layers.
Potential revenue layers under feasibility work
The partners describe hydrogen sales as the underlying commodity revenue. Electricity-market optimisation could lower production costs by concentrating consumption in cheaper hours.
Flexible operation could potentially reduce imbalance exposure or provide demand-side system services where market rules allow. Longer-duration hydrogen storage is also cited as a way to move energy across periods that batteries or ordinary demand response cannot economically cover.
The memorandum notes that not all of these revenue streams are available today and that no commercial operating model has been announced. The first phase is a feasibility study covering technical, operational and commercial pathways.
Renewables-driven operation and longer-term gas storage
Slovenia expects higher renewable penetration to increase the need for flexible electricity demand. Electrolysers are described as being able to operate during periods when renewable generation exceeds immediate electricity demand or when moving additional power through the network becomes difficult.
The partners say this would allow some of that electricity to become hydrogen instead of curtailing generation. The memorandum contrasts this with a hydrogen plant designed for maximum continuous utilisation, noting that high utilisation lowers unit costs of expensive electrolysis equipment.
It also states that flexible operation can enable consumption of cheaper electricity while providing greater value to the power system, with an optimum positioned between these two approaches. This leads to an investment question for developers: whether to maximise annual operating hours or maximise value per operating hour.
Regional relevance via hydrogen corridors and mobile backup units
Plinovodi adds a longer storage dimension by citing gas infrastructure’s ability to store and transport energy over much longer periods than typical minute- or hour-scale electricity flexibility. Hydrogen produced during favourable electricity conditions is described as potentially shifting value from the power sector into industrial demand, transport or potentially future hydrogen-network infrastructure.
The memorandum also references Plinovodi’s work on Slovenia’s connection to emerging European hydrogen corridors, extending relevance beyond domestic consumption. If hydrogen networks develop across Central Europe, Slovenian electrolysis would not depend exclusively on local buyers, with exportable hydrogen demand described as potentially creating an additional buyer for low-value electricity.
The memorandum further covers hydrogen-based mobile backup units for critical electricity infrastructure. The equipment is described as being designed so it could additionally function as fast-charging infrastructure for electric vehicles .
Cost constraints and rules for market participation
The memorandum identifies cost as the biggest challenge for low-carbon hydrogen production via electrolysis, citing substantial equipment investment and large quantities of electricity. It says flexible operation can lower electricity costs but fewer operating hours can increase capital cost allocated per kilogram of hydrogen produced.
Digital optimisation is described as unable to make an inherently uneconomic project viable on its own. Feasibility work is expected to assess whether combining uses—hydrogen production, electricity flexibility, infrastructure resilience and potentially mobility—can generate sufficient revenue to justify investment.
The study is also expected to define rules governing how the electrolyser participates in electricity markets and how hydrogen entering future gas infrastructure is measured, certified and valued . The partners describe the Slovenian project as still far from a commercial hydrogen market while focusing on whether an electrolyser can act as a dispatchable interface between two energy systems .
