How green hydrogen could eliminate natural gas from the electricity system - and also reduce consumer costs

The prospect of delivering most of the UK electricity supply from renewable energy is getting closer. Yet critics of renewable energy seem to be bending over to point out that some power from gas power stations will still be needed to balance renewable energy. In some ways this is ironic - are they saying that we need more renewable energy? If they think it is impossible to eliminate natural gas in a renewable energy system, then they are wrong.

There are good arguments to suggest that it will be cheaper for the consumer to balance the system with green hydrogen rather than natural gas. It will provide competition to gas generators who appear to be profiting at the cost of the consumers. Indeed using green hydrogen generated by renewable energy is also a great way to boost the renewable energy programme with further development. But for this to happen anytime soon, we need to see changes in the priorities of the Government’s hydrogen programme.

What’s wrong with the hydrogen programme

There are two big problems with the debate about hydrogen in the UK, and the Government’s programme (such as it is) to support low-carbon hydrogen. One is the fact the Government seems to be backing hydrogen from fossil fuels (mainly gas) more than green hydrogen from renewable energy. The two are different technologies: blue hydrogen comes from the steam reformation of fossil fuel, and green hydrogen is produced from electrolysing water. The green hydrogen could most cost-effectively come via a dedicated electricity supply from large wind farms or solar farms. I say ‘dedicated’ in the sense that the windfarms could have a wire direct to large-scale electrolysis equipment.

Blue hydrogen is not fit for purpose. The plant will only remove, at very best, 90 per cent of the carbon dioxide from the natural gas used in the process that generates blue hydrogen. Even if the efficiency of the purification process which removes the carbon dioxide is improved to 99 per cent that will not be good enough. For a start, this is likely to be a much more expensive process.

Moreover, do we want to provide a prop to keep gas fields going which will also supply unmitigated natural gas to other parts of the world? And do we want to spend a lot of money on developing offshore pipelines and undersea caverns for one-off storage of carbon dioxide? This is as opposed to developing offshore underground stores of hydrogen that can be continuously used to provide green hydrogen for electricity production. I would go for putting the money into the green hydrogen for sure!

The second problem with the UK Government’s hydrogen programme is that it is oriented towards an outdated notion of the potential hydrogen market. The focus of the hydrogen support programme needs to be on those low-carbon pathways that can only be accessed through hydrogen rather than direct electricity supply. Many of the schemes being funded by the government’s hydrogen programme (see HERE) are aimed at markets that can, and increasingly will, be met by direct renewable electricity and batteries.

10-15 years ago it may have been reasonable to assume that HGVs, trains and buses could be powered by hydrogen more easily than with electricity and batteries. However, battery technology has advanced and is advancing, at such speed that such notions should be abandoned. Indeed such is the progress being made at the laboratory level that it is possible to see that even European airflights will be increasingly powered by battery aircraft in 20 years. The government has not even quite ruled out the use of hydrogen in building heating, despite the obvious inefficiency of hydrogen technology compared to heat pumps and other impracticalities of using hydrogen for space heating in buildings.

Essential uses for hydrogen

Policy therefore needs to be focussed on what essential roles can be played by green hydrogen in decarbonisation. There are a range of possibilities here - steelmaking, cement production, manufacturing of industrial hydrogen, and also the balancing of the electricity system itself. Altogether these uses alone (there are possibilities for other industrial uses) amount to a requirement for over 100 TWh of green electricity to serve these markets. This, added to a much more vigorous effort to promote heat pumps and heat pump-supplied district heating will keep the renewable energy programme deployment cracking ahead at a good pace throughout the 2030s.

The use of balancing with some type of gas

A UK electricity system that is mainly based on fluctuating renewable energy is going to need a range of means of balancing. Most of this intra-day balancing will be provided by batteries, which can switch production from one part of the day to another. System flexibility will also help by shifting demand from one time to another. But then there are the well-talked-about long periods of low wind, especially in the winter, which can last for several days, or, relatively, say over two weeks. In addition, there is inter-annual variability of wind and sun. This is where hydrogen comes in as a crucial technology.

There have been various studies about the amount of storage needed in a 100 per cent variable renewable energy system. However, to cut a longer discussion short (which I shall reserve for another post) we need also long-term stores of the equivalent of at least a month’s worth of generation. That assumes a considerable amount of excess renewable generation capacity. Of course, we are not heading currently for a 100 per cent variable renewable system at the moment (given some residual nuclear and biomass capacity), but, nevertheless, we shall need a considerable amount of long-term storage capacity.

There is a longer discussion about how much (long-term) stored energy is needed It is very expensive to use batteries or pumped hydro storage to deal with this. It would mean an awful lot being kept in reserve and used very rarely - which would make balancing very expensive. When the industry talks about long-duration batteries’ this is in terms of several hours or at most a couple of days, not several months. There is a need to develop renewable geothermal energy which has a predictable dispatch, but we cannot be certain this will do the entirety of the task. So we do need to develop green hydrogen for the sake of the foreseeable future.

How much hydrogen shall we need for electricity balancing?

Of course, at the moment this electricity balancing function relies on gas-fired power plants. This means either the conventional large-scale combined cycle gas plant or the more versatile smaller gas engines and turbine ‘peaking’ plant that are increasingly being used. We shall still need around 5 per cent balancing from gas power plans in a system that consists mostly of wind and solar power. We need long-term cheap sources of renewable energy to deal with seasonal and also annual variability of supply.

As I discussed in my previous post we should achieve 100 per cent of electricity from non-fossil sources by 2033. However, if we are to avoid the use of natural gas to balance this generation, then we need, in effect, an annual demand for around 15-20 TWh of power from gas or hydrogen plants. Taking into account the efficiencies of electrolysis and also the efficiencies of the gas peaker plant themselves this will require around 60 TWh of electricity from, say, offshore windfarms. That in turn means the equivalent of around 15 GW of capacity of offshore windfarms producing hydrogen at average capacity. Of course, these quantities will increase over time as renewable energy generation increases, following the increase in electrification of the economy. We shall need long-term energy stores to deal with inter-annual variability on wind and sun - that is assuming we are not going to use any fossil fuels.

That, by the way, should not be regarded as anything especially novel, since prudent European countries have been maintaining large long-term stores of natural gas to deal with crises. It is just as well they did! The UK has one large offshore storage facility in the form of the ‘Rough’ store. This currently stores natural gas. It can be repurposed to store hydrogen.

Hydrogen generation equipment

Generating electricity from hydrogen is done on the same general principle as generating electricity from natural gas. However, the same equipment cannot be used. There are already some specialised electricity-generating turbines used in the chemical industry which run on hydrogen. However, this produces a lot higher NOx emissions than generating equipment using natural gas. To remedy this problem, low NOx hydrogen generators have been developed by Kawasaki (see HERE). They just await a big market for them to enter large-scale production of their hydrogen-fuelled gas turbines.

What do we do now? RenewableUK has just issued a report on how green hydrogen prospects can be advanced (see HERE). They argue that: ‘This report sets out 14 policy recommendations to ensure markets and hydrogen production business models are fit for the future. To date, hydrogen production business models and renewable electricity support mechanisms have been developed in isolation. We recommend that the Government brings these two schemes together so hydrogen production and renewable generation can be better coordinated and co-located to reduce costs and inefficiencies, and maximise deployment.’ They talk about how their suggested measures will reduce hydrogen costs by over 60 per cent.

Outside of this there are signs that technology costs are declining. New techniques are being rapidly developed for electrolysers in particular. For example ‘membrane-less’ techniques are resulting in cost reductions. We are beginning to see the sort of volume growth and cost reduction trends that we have seen in batteries and solar pv. See (HERE).

Saving consumer’s money

The cost of electricity from gas plant is an expensive part of the wholesale power electricity trading system - on some occasions, the cost has gone over £500 per MWh (the average wholesale being around £80 per MWh). As the proportion of wind and solar power on the system increases the amount of cheap power - times when prices are either negative or near zero, will increase - to being a large part of the time. But a small part of the time will be when power prices are a lot higher, especially during lengthy periods of low wind and sun. It is those times when there is the possibility of gas power stations earning excessive profits. We have various techniques available to deal with this, but the biggest (potential) bazooka, which involves long-term storage to deal with the problem and stop power prices from peaking - is green hydrogen.

As Adam Bell has said, since the end of coal-fired electricity generation, there is currently a lack of competition to supply balancing power. This has handed increased profits to the gas generators, and increased prices to be paid by consumers. Bell says: ‘The absence of coal - even with relatively healthy capacity margins - handed considerable market power to gas-fired power plants, and although gas still sets the price of power, it does so at a heftier margin than in the 2010s. One can observe this by looking at the gross profits of Uniper UK, whose primary business is running gas power plants’ (see HERE). Hydrogen power could present competition to the gas generators - especially if it is done by a well-organised system of contracts with gas generators to ensure that they give value for money to the consumer.

The Government is (currently) committed to spending £22 billion on developing a dead-end infrastructure for fossil fuel carbon capture and storage. However, there is not enough coordination to build green hydrogen’s contribution to finally getting rid of fossil fuels from the electricity generation system.

What we need to do now

The Government should take firm action to produce a coordinated plan for the delivery of a system involving hydrogen generation to balance the emergent near 100 per cent renewable energy system. As part of this it needs to a) implement the renewable energy industry’s policy suggestions, b) it needs to deploy advanced hydrogen-powered electricity generation equipment, c) create storage opportunities for hydrogen, and d) sign up some contracts for delivery of electricity generated from hydrogen at costs upon which we can rely.

If the Government does this then it will achieve several objectives simultaneously. It will reduce the cost of balancing electricity. It will reduce greenhouse gas emissions. It will also give a further boost to the renewable energy deployment programme.

A range of policies need to be turbocharged to keep the renewable energy programme surging ahead. Launching policies to give a much bigger boost to green hydrogen should be one of the measures taken as soon as possible.