Learnings

Outcomes

The key question that this study looked to answer was to whether electrolysers using curtailed renewables could be economic, assuming the hydrogen could be blended into the gas transmission system and asks if they would require any additional subsidies. The study showed that hydrogen production using curtailed energy can be economic over some of the forecast horizon. Results for 2025 suggest that there are limited circumstances where such production would be economic, but in 2030 due reductions in power prices and increases in transmission constraints, many of the business models show at least one positive economic case. In 2035 there are fewer transmission constraints due to assumed build out of the transmission grid, so the economics of electrolysers worsens, with only some business models remaining economic.  Additional revenues required to make different electrolyser business models economic were analysed, and the different revenues that could potentially be accessed by an electrolyser were discussed, including the Hydrogen Business model. Current UK policy support does not support hydrogen blending, but details of the ongoing consultation were included in the study which indicates that such support could be available, albeit at a lower level than comparable projects which have a dedicated offtaker. 

Value tracking  

Data Point                                        Data Point Definition 

Maturity                             TRL2-3                                               Research project 

Opportunity                   <25% of single asset class              Project focus is on electrolysers and curtailment, not currently part of the 

NTS

Deployment costs             -                                                        Not yet known, research project

Innovation cost                  £74,000                                            Cost of innovation project 

Financial Saving                 -                                                        Financial savings are not currently identified due to early TRL level.  

It is projected that curtailed energy is economic for hydrogen production in 2030.

Safety                                 -                                                        Not a focus of the project

Environmental                   -                                                        No direct environmental benefit, albeit there is associated CO2 savings of 

utilising electrolysers for energy production

Compliance                        Support Compliance                        -

Skills & Competencies       No change                                        -

Future proof                      Supports business strategy              Results of project could support updates to NGT strategy and future 

business development

Lessons Learnt

Engagement with National Gas was undertaken bi-weekly with added additional meetings, many close together, to ensure the understanding of the more technical aspects of the work were understood by the client. These were not originally envisaged in the project plan and future projects would be wise to add in a couple of workshops at the end of work packages to ensure that this clarity in understanding is communicated early before moving on to the next piece of work. This was further complicated by the overlap in some workstreams, which while beneficial for the project meant that this understanding was a bigger job than if confined to just a single work package. The research itself has provided a number of insights in how the interface between electricity and hydrogen in GB works, which could be a useful for government and industry to consider for development of new policy, support of different types of project or providing an economic case to make a business investment.