Project Summary

Connectrolyser will optimise electrolyser operation at hydrogen hubs by exploiting flexible operation to help manage the electricity network, excess renewable generation, hydrogen customers and onsite storage. This will avoid the need for traditional firm capacity connections, the preferred choice among hydrogen developers and producers, which have longer lead times and higher costs. Connectrolyser will also explore novel offerings for electrolysers to support security of supply.

 

Up to 8GW of electrolysers are predicted to connect to UK distribution networks by 2050. This project could save up to £30bn in network reinforcement costs by dynamically managing the system for whole system optimisation. 

Innovation Justification

INNOVATION

·       We believe that Connectrolyser is the first demonstration of electrolysers as dynamic assets to provide services to the electricity network, facilitated by flexible connection and advanced control systems.

Innovative aspects include:

·       identifying how electrolyser developments could meet requirements to provide SoS services to networks, to take advantage of network capacity that exists but is currently only used during network fault conditions or planned outages. This untested approach goes beyond the existing connection products offered by GB DNOs, including flexible, curtailable, phased and timed connections.

·       investigating the technical flexibility of PEM electrolysers and their ability to provide security services to the DNO and therefore access to cheaper, quicker connections.

·       Developing a predictive control system to optimise the operation of a hydrogen hub to respond to signals from the network, make best use of renewable energy and deliver a secure supply of hydrogen to their customers.

DNOs are required to meet certain requirements to maintain SoS for all customers. The Engineering Recommendation P2 was revised and reissued in 2023. It now contains guidance for how networks could provide SoS from distributed generation and demand side services as well as the traditional solution of network assets. 

 

CHALLENGES

Connectrolyser addresses all four SIF Challenges, but primarily Challenge 3: Improving energy system resilience and robustness. Development of local hydrogen hubs will improve energy system resilience and robustness as new hubs could become vital sources of DSO flexibility. Innovative approaches to connection and operation could improve network availability to new customers whilst maintaining electricity security.

 

ENGAGEMENT

From preceding innovation funded projects, we learned about predictive control, electrolyser impact to networks and generation constraints at the distribution level. In Discovery Phase, we engaged with Carbon Trust, HyCoRe (NGN) and REACT (SSEN-T) to share knowledge and avoid duplication. From these, we understand other issues that will impact electrolyser rollout such as water supply, hydrogen storage approaches and offshore development.  We learned location-specific information from two related NGT projects, including engaging with potential offtakers, who are looking at the same demonstration site as Connectrolyser. We held in-person and online workshops to bring together experience of all parties involved to challenge our thinking.

 

·       SIZE/FUNDING

·       The project design ensures delivery within available timescales and focuses on the most beneficial customer outcomes.

·       Green hydrogen production is relatively new. Due to the risk involved in the project and not fully knowing whether the learnings will lead to benefits can be delivered across UK Power Networks’ licence areas, these activities would not form part of business as usual activities. In order to progress an innovative project which carries significant risk in implementation, additional innovation funding is required as a stimulus. The phased nature of the SIF suits this project better than NIA funding.

 

TECHNOLOGY READINESS

We expect the Connectrolyser control system to reach TRL2 (“Technology concept formulated”) during Alpha Phase and progress to TRL7 (“System prototype demonstration in operational environment”) during Beta. We also expect to reach Integration Readiness Level (IRL) 4 (from IRL1 currently) and Commercial Readiness Level (CRL) 4 (from CRL2 currently) by Alpha Phase completion.

 

·       COUNTERFACTUALS

·       The following have been considered:

·       Total cost of national reinforcement for connecting hydrogen developments using conventional, non-flexible connection that add to overall peak demand.

·       Costs for a specific hydrogen project to connect using a conventional, non-flexible, connection. Discovery Phase exemplar estimated £20m+ for an import/export connection.

·       Connect using existing dynamic connection products (curtailable, phased, timed, profiled). These lead to reduced network reinforcement, but overall reinforcement requirement and associated delay in connection would still be high (Discovery Phase exemplar estimated £7.5m) for an import/export connection.

·       Existing connection products and flexibility services suitable for connecting electrolysers. 

Impacts and Benefits

Modelling by Imperial Consultants during the Discovery Phase used the four Future Energy Scenarios (FES). The work indicates that national value of flexible hydrogen hub operation may be worth up to £30bn (Leading the Way FES scenario) in nationally avoided distribution network reinforcement, and around £1bn per year in frequency response to the ESO, by 2050. This will manifest as savings to all customers.

From the real-life hydrogen production example that underpins this project, the cost of providing a flexible connection is around £13m less than a firm connection. This is in line with the benefit of flex connection in RIIO-ED1 identified as being in the range of £2- 22m, reported annually in the E6 submission to Ofgem.

The Alpha Phase will be used to give greater granularity, refinement and validation on the size of the benefits. 

 

Financial – Future reductions in the cost of network operation

Assessment of baseline in Discovery Phase indicated site connection cost of £20m+, much of which was network reinforcement to facilitate the connection. GB-wide value of flexible hydrogen hub operation may be up to £30bn in nationally avoided distribution network reinforcement by 2050.  The attached CBA analysis, using System Transformation FES scenario, shows an NPV benefit of £313m over 30 years from deferring reinforcement costs. 

Metrics will include:

·       Capacity of network reinforcement deferred (MW and £)

 

Financial – savings per annum on bills for consumers 

The change to connection fees as part of the Ofgem Significant Code Review means that reinforcement costs will be passed on to DUoS consumers. Reduction in required reinforcement will lead to reduced DUoS charges paid by consumers.

Renewable generators may experience less curtailment by being on flexible connections close to hydrogen hubs, thus enabling more hydrogen production and increasing revenues. We do not yet have a view on this value. 

Metrics will include:

·       Energy bills – current and future forecast (£)

 

Environmental – carbon reduction – Direct CO2 savings/annum

Running the electrolyser responsively and improving network load factor may reduce losses and CO2e on the electricity network.  In Alpha Phase, it is proposed to study this impact. We do not yet have a view this value.  

 Metrics will include:

·       Reduced losses (MWh)

 

Environmental – carbon reduction – Indirect CO2 savings/annum

Hydrogen produced at the hydrogen hub would be used to replace fossil fuel consumption for off-takers who wish to fuel-switch. Some already identified are project participants in this SIF. For example, estimated CO2 savings are estimated at up to 256.8tons of CO2e per year.

In addition, reduced distribution-connected curtailment will lead to increased renewable generation on the system. Estimate for this is 1 ton of CO2e per year. 

Analysis during Discovery phase showed that dynamic hydrogen hub operation could lead to 60TWh reduced renewable (transmission-connected) energy curtailment per year.

Metrics will include:

·       Carbon footprint of the solution with a comparison to baseline emissions. (TCO2e)

·       Avoided curtailment (MWh)

 

Revenues - improved access to revenues for users of network services 

Learnings from deployment of Timed Connections are that a conservative average estimate of three months decrease per connection is appropriate.

Hydrogen hubs could also access additional revenue through offering flexibility services to the DSO. Revenue range for this is very variable, and hubs could earn £2-625k per year depending on location. These could be worth £1bn per year in 2050.

Metrics will include:

·       Revenue from offering services to networks (£)

·       Volume of hydrogen produced (kg)

·       Revenue from hydrogen production (£)

 

New to market – products

Innovative connection products could lead to reduced reinforcement requirements, the value of which has already been noted above. 

Metrics will include:

·       Capacity of network reinforcement deferred (MW and £)