Project Summary
This proposal addresses three SIF Challenges:
Primary Impact:
- Challenge 3: Supporting the development of a local hydrogen hub will improve energy system resilience and robustness.
Secondary Impact:
- Challenge 2: Hydrogen hubs will help the power system be ready for Net Zero. This project will develop an understanding of how electrolysers could provide services to the grid.
- Challenge 4: Decarbonising major energy demands
UK Government is committed to deploying 5GW of hydrogen-producing electrolysers by 2030. As part of this project, UK Power Networks will work collaboratively with a hydrogen producer, and two hydrogen customers to develop a local hydrogen hub. This whole system project will identify the best way to connect electrolysers to the grid and support the local energy system.
The proposed users for the solution developed will be hydrogen producers who are installing new electrolysers and DNOs who will be supporting the connections process. The expectation is the proposed solution will expedite the connections process reducing the need for significant network upgrades, while enabling the hydrogen producers to meet their customer demands. This project is grounded in the practicality of a real-life situation in East Anglia.
Electrolysers are likely to be high energy users (around 10MW) and as a result, they will provide additional burden and constraint onto the network if installed using the fixed connections process. This project will use a network-led approach to assess how these new demand types can be safely and quickly added to the network, while potentially providing an additional source of energy flexibility by using an AI control system to optimise the running of the electrolyser in line with network capacity.
Project Partners
- UK Power Networks, electricity distribution network operator serving London, the East and the South East of England.
- HydroGenus, an industrial supply chain partner and hydrogen hub developer, brings people with proven experience in hydrogen and a successful track record in the electricity and water industries.
- National Grid Gas Transmission (NGGT), seeking hydrogen to decarbonise the large gas-fired compressors that are critical to the running of national pipelines.
Subcontractors
- ICON is a research-based consulting firm specialising in hydrogen and electricity, wholly owned by Imperial College London.
- FES Services Ltd brings electrical system integration specialism for behind the point of connection aspects of the installation.
Participants
- Hexcel is a global manufacturer of advanced composite materials with a local site wanting to switch to low-carbon hydrogen from natural gas.
Innovation Justification
Green hydrogen production is required to support the UK's transition to Net Zero. Electrolysers require large capacity electrical connections, and so utilising existing connection processes could trigger requirement for network upgrades. There is an opportunity to innovate to reduce the cost and increase the speed of connection for electrolysers.
The proposed solution aims to understand mechanisms to enable DNOs to rapidly approve and support electrolyser connections requests. There has been very limited experience in connecting electrolysers for hydrogen production to the network. Thus, there are uncertainties on appropriate connection types, agreements and flexibility models to suit their needs. This project addresses these knowledge gaps to prevent long connection lead times due to network reinforcement.
This project will build on the NGED 'HERACLES' project which looked at approaches to connecting large electrolyser sites, but did not identify innovative ways to connect or support hydrogen hubs.
This project will also take learnings from the challenges with the current connections process and existing flexible connections agreements. In addition, there are two related SIF bids from NGGT that could provide additional learnings. These are trialling new electrolyser and hydrogen storage technology to verify the technology efficiency and energy requirements.
The project delivers economic and social value by supporting the production of hydrogen at a local level, where hydrogen can be supplied close to the point of use. The Government's strategies for decarbonisation, improved energy security and clean air have established an important role for hydrogen, and innovative solutions are required to overcome barriers of expensive connections which delay implementation.
Much of the Government's strategy, policy and support for green hydrogen was announced recently. This includes the low carbon hydrogen standard. Green hydrogen production is still a nascent area, and there are many unknowns in respect of the UK's plans for producing and consuming green hydrogen at scale. This project will generate a series of recommendations on network readiness and suitability for investment in green hydrogen to support the UK's ambitions. With a high level of innovation and higher risk than current practices, SIF funding is more appropriate than funding though existing allowed revenues. The staged nature of the SIF projects with separate phases suits this project better than NIA funding. As noted in this document, there are other SIF discovery projects ongoing that are linked to this bid. It is expected that they could merge into a single project in future stages, if successful.
Project Benefits
In general, the benefits realisable from this project are expected from the commissioning date of the hydrogen hub, expected to be delivered in 2025. The comments below are based on a 10 MW electrolyser running at 75% annual load factor. These will all be reassessed during the Discovery Phase.
Future reductions in the cost of operating the network
- Target output: Avoided upstream reinforcement costs estimated to be circa £1m-£10m.
- Calculation: Comparison of the cost of a fixed connection to the networks compared to the costs associated with the novel connection agreement defined.
- Justification for target output: Typically, the electrolyser will be connected to the 11kV network or will have a dedicated 33kV connection. Avoided upstream reinforcement costs as required by the fixed connection estimated to be circa £1m-£10m. This will be estimated in the Discovery Phase.
Annual cost savings on consumers' energy bills
- Target output: Reduced reinforcement cost by circa £1m
- Calculation: Modelling to compare the expected DUoS charge changes if the connections were made using the novel connections agreement compared to a fixed connections agreement.
- Justification for target output: Reinforcement costs for traditional connections would be charged through DUoS according to Licence Conditions and the DUoS charging mechanisms. The avoided costs of the proposals can be converted to avoided DUoS and this assessment is made on a per-customer/MWh basis in Discovery Phase.
Direct CO2 savings per annum against a business-as-usual counterfactual
- Target output: 25% of the hydrogen produced at the demonstrator displaces diesel in road transport and generator sets.
- Justification for target output & calculation: 50% of this hydrogen may be made available for direct use in UK Power Networks' transport and mobile generation fleet, with an estimated saving of 1,300 tonnes CO2e / annum.
Indirect CO2 savings per annum
Initial assumptions are that 75% of hydrogen displaces fossil fuel in industrialists' processes and third-party (i.e. non-DNO) assets, including gas transmission assets. The overall saving estimate is 8,400 tonnes of CO2e per annum using government data on CO2e intensity of fuels and measuring fuel use.
Revenues -- improved access to revenues for users of network services
The project team will analyse electrolyser load flexibility and compare it to historic curtailment data to predict how much curtailment could be ameliorated with a new running arrangement.
