Learnings

Outcomes

Arup has produced several deliverables as described as part of the Master Document List. Key documents reporting the project outcomes are summarised as part of the WPB and WPG combined report, as well as the executive summary report which will be published.  

Overall, the project has provided designs for a single-AGI and multi-AGI case as part of the OptiFLOW project. It has also outlined the cost differential between these, noting that the multi-AGI case will be more costly, due to the nature of this case requiring more equipment and therefore greater CAPEX investment. However, there could be benefits to a multi-AGI solution allowing more hydrogen into the HyLine pipeline and providing multiple points of entry for hydrogen into the pipeline, potentially meaning that producer pipelines to access the AGI’s could be reduced in length, therefore leading to an overall cost reduction.  

Multi and single AGI 

It was determined through the preliminary engineering design that it would be feasible to operate either a single-AGI or multi-AGI configuration, as well as construct the AGI facilities at each of the 3 proposed locations.  

The following points were also noted: 

• The operability of the single-AGI Pembroke facility will by default be less complex due to a lower number of process interfaces than the multi-AGI options.  
• There are significant constructability challenges for the Pembroke AGI, due to the substantial site gradient and adjacent environmental factors. These do not apply to the Freshwater East and Llandyfaelog AGIs. 
• The estimated costs for the multi-AGI option are significantly higher than for the single-AGI (£57,099,000 vs £32,534,000). Although, the throughput of the multi-AGI option is higher due to the additional offshore hydrogen production through the Llandyfaelog facility.  
• Additional planning applications would be required for the multi-AGI option, with three separate applications compared to one for the single-AGI.  
• Regarding safety, there is an advantage to the single-AGI option which exposes fewer people overall to the process environment during operation and maintenance. 
• There is a considerably greater environmental impact by developing multiple AGI facilities when compared to one AGI facility. 
• Compressors have been identified as long-lead time items on the project critical path. Six additional compressors are required for the multi-AGI option compared to the single-AGI. Therefore, the multi-AGI option potentially poses greater procurement challenges. 

Economic benefits

Overall, whilst there are additional challenges associated with the multi-AGI, the combined hydrogen throughput of the multi-AGI scenario is assumed to be greater than the single Pembroke AGI (1,100 tonnes/day vs 865 tonnes/day). Enabling greater hydrogen production within the west Wales region could incentivise developers to progress with hydrogen projects, as the available infrastructure for transporting their hydrogen will be in place. 

The levelised cost analysis has highlighted that, under a constant hydrogen throughput equivalent to 2.16TWh per annum, a multi-AGI option would lead to additional costs of approximately £7 per MWh, or £0.24 per kg, when compared to the single-AGI option.  
Despite the higher levelised cost for a multi-AGI option, it could deliver additional benefits, including:  

• A lower LCoH across the network as there are more proximal connection points than a single point at the far end of the pipeline, which could potentially reduce connection costs for the producer via shorter pipelines.  
• Facilitate a greater of number of producers to connect to the HyLine Cymru pipeline, either potentially through shorter connecting pipelines, or more generally through additional capacity.   
• Greater competition and choice of producers supplying hydrogen to the network could lead to more competitive pricing.  
• Greater resilience in the network and therefore improved confidence and reassurance of a reliable hydrogen supply. 
• Future proofing and keep the network flexible to future supply.  

In terms of the wider economic and supply chain impacts, the single-AGI option could support up to 65 direct jobs at the peak of construction, with an associated average total GVA per annum of £7.0m over the estimated 4-year construction period. Once operational it is estimated that the single-AGI option could support up to 30 direct jobs, with around 13 on-site FTE roles. The ongoing operation of the facility could support an average of £5.4m in direct GVA per annum.  

For the multi-AGI option, direct employment during peak construction in 2030 and 2031 could rise to 120 jobs, with an associated average total GVA per annum of £12.3m over the estimated 4-year construction period. Once operational it is estimated that this option could support up to 70 direct jobs, with around 38 on-site FTE roles. The direct GVA generated during the operational phase is estimated to average £9.7m per annum. 

At this stage, Arup is not in a position to recommend a preferred option based on this levelised cost analysis alone, but suggested next steps are presented the report that will allow WWU to come to an informed conclusion based on analysis that covers the whole network. 

Lessons Learnt

Recommendations and lessons learnt 
WP G

• More detailed investigation into typical demand profiles to allow overlaying of differing supply and demand rather than extrapolation of one offtaker. This will allow a more accurate calculation to be made of the required storage to provide resilience to the hydrogen supply.  

To better understand the relative advantages of single or multi-AGI options for the HyLine pipeline, it is recommended that as part of the next phase of this project, WWU should:  

• Undertake a Hazard Identification Study ahead of FEED, using the outcomes of the Preliminary Hazard Review undertaken in this work.  
• Review the assumption of the ecological buffer zone on the boundary of the Pembroke site, which substantially impacts the design of the Pembroke AGI.  
• Engage with OEMs to better understand the implications of procurement of long-lead time equipment items for development of both the single and multi-AGI scenarios.  
• Engage compressor vendors to understand the configuration of the system and optimal location of the units, allowing more accurate layout and cost modelling.  
• Undertake more detailed investigation on areas of the facilities such as metering packages, control and control integration and site considerations (separation distances, buildings and utilities).  
• Engage with developers and off-takers to better understand the future production capacity and expected demand. This will be crucial to determine the best AGI scenario.  

In addition to the work required as part of the next design phase, WWU should also consider the following recommended next steps to better understand the economic, financial and commercial implications of both the single and multiple AGI configurations:  

• Undertake a combined analysis of the work done on the AGI configurations with that of the upstream offshore infrastructure (OREC) and the HyLine pipeline itself (Dundas) to give a complete picture of the economic impacts and benefits of the whole system.  
• Work with identified potential future hydrogen producers to conduct an economic analysis of the upstream onshore infrastructure requirements and economic impacts.  
• Undertake a study to establish the commercial model that will underpin the operation of the AGIs under both considerations. This will be important to understand the charging mechanisms that will cover single or multi-AGI configurations to better understand how costs and any cost efficiencies may be transmitted through to consumers.
• A more collaborative approach to the assumption on consumer demands would have been beneficial. This would have allowed Arup to be able to apply learnings as the project was being delivered.
• Site visits should be undertaken as early in the programme as possible to inform the work and prevent potential changes or delays to the programme.  

WPB  

• Economic analysis of the whole system is required to give a complete view of the economic benefits and should be taken forward as future work.  
• Better definition of desired outcomes would have been helpful at the start of the project.
• Collaboration with OREC was a good contribution to the project to provide more of an overview of the entire economic benefit of the system.  

It would have been beneficial for one supplier to undertake the system economic benefits or least have the economic analysis split into fewer parts.

Overall  

• The steering group could have been utilised more effectively and regularly. A coordinated discussion, more regularly and earlier, between the Steering group members (producers and offtakers) could have been beneficial to the engineering workstream.  
• Delays to approvals of key documents and assumptions can be detrimental to later elements of the programme. It can lead to difficulty in being able to undertake this work or can lead to later rework. The programme would have benefitted from an improved approvals process.