When wind and solar generate surplus energy, can it be used to break water into oxygen and hydrogen and to store the gases in liquid form for later use as an energy source?
Yes. This is possible, and perhaps the best use of surplus electricity. At times when there's plenty of electricity, and not many good uses for it, the price of electricity will due to free market go very low. Then the price of electricity doesn't matter much in the costs of creating the hydrogen. A major reason why this isn't done in a massive scale today is that we still don't have enough renewable generation that electricity price would go near zero often. But it will happen, and this will be the solution for turning the zero price of electricity into a useful thing.
A good question is what are you going to do with the hydrogen. Hydrogen embrittles steel as used for gas transport pipes and has third of the volumetric energy density of methane (natural gas). Furthermore, existing gas turbines built for methane won't work with 100% hydrogen. A small fraction of hydrogen injected to the gas grid won't hurt much: it can be transported, stored and burned with the methane. But as the share of hydrogen goes higher, it will cause problems.
One solution could be to capture carbon dioxide from plants emitting it (waste-to-energy, paper and pulp factories, biomass power plants, etc) and combine this carbon dioxide with hydrogen in Sabatier reaction to produce methane. Yep, the same stuff as natural gas, except this time it's a clean synthetic fuel and not a dirty fossil fuel. This methane can then be injected to the natural gas grid, stored just like methane in storage areas, and burned in gas turbines. A major benefit for handling methane instead of hydrogen is that the volumetric energy density of methane is three times that of hydrogen.
Was this ever tried in any electric grid?
Yes. The technology is today called power-to-gas and is being slowly deployed. The German company Uniper is a major player in the natural gas industry, and is today injecting hydrogen directly and hydrogen converted into methane to the natural gas grid.
The Norwegian company NEL is in the business of manufacturing electrolysers. Its business is booming and the share price has increased markedly recently, showing that there is a demand for water electrolysis.
What is the energy efficiency of this method?
- Electricity to hydrogen in electrolysis cells: about 70-75%
- Sabatier reaction to convert hydrogen and carbon dioxide into methane: about 83%
- (Combined electrolysis + Sabatier: 58-62%)
- Carbon capture for Sabatier from power plants: 78-89%
- Burning methane to electricity in turbines: 45-50%
So if you capture carbon dioxide from a power plant burning synthetic methane, use electricity to create hydrogen, use Sabatier reactor to combine carbon dioxide with the hydrogen to create methane, and burn it later to electricity in turbines, closing the cycle, you will get about 20-28% cycle efficiency. Yep, it's very poor, but doesn't matter, as you're creating the hydrogen when the price of electricity is practically free due to surplus generation, and converting in back to electricity when the price of electricity is sky-high due to shortage of intermittent renewable generation.
It is also worth mentioning that if there's any use for the waste heat from these processes, for example a district heating grid, you can improve the efficiency by utilizing the waste heat in a useful manner instead of just discarding it.