UK hydrogen: national and local approaches
The Oil & Gas Authority (OGA) has endorsed a report supporting a plan to convert natural gas delivered to the Bacton terminal into blue hydrogen. It addresses its twin objectives of maximising the economic recovery of the UK continental shelf resources while also decarbonising the UK energy mix.
Bacton, in Norfolk, is the delivery point for about a third of UK gas, as well as the terminal for pipeline gas to/from continental Europe.
It also has the potential to act as a hydrogen hub for London and the southeast of the UK, the OGA reported late March, citing a report by Progressive Energy (PE). PE had previously worked on the Hynet project with Italian energy major Eni in the Merseyside area of the UK. That also includes carbon capture and storage in an offshore field.
The new study found that a “sustainable market” for hydrogen is expected to develop and it is anticipated that blue hydrogen will be the most commercially viable option in the 2030s and early 2040s. This will provide the time for the maturation of green hydrogen technology and for green hydrogen to become more cost competitive on an industrial scale by the late 2040’s and early 2050’s,” the OGA said.
“The southern North Sea can therefore make a valuable contribution to decarbonising the UK energy mix,” it said.
However, action is required now to ensure the continued production and development of natural gas in the near term. This will be needed to protect existing infrastructure and to ensure feedstock availability for blue hydrogen. Failure to act quickly could see infrastructure prematurely decommissioned and hydrocarbon opportunities lost, which would have a credible impact on realising this value for the region, the OGA warns.
Green or blue?
As a carbon-free substitute for methane in many industrial heat and power applications, hydrogen has an important part to play in the expensive green transition.
But there are discussions over how to deploy blue and green hydrogen that hint at friction between the one-size-fits all approach of national regulatory or environmental policy; and local conditions. In some parts of the country, blue will be cheaper and simpler to accommodate.
Unlike green hydrogen, blue hydrogen is not weather-dependent but it does require industrial quantities of methane; facilities to separate the hydrogen from carbon; and then pipelines, platforms and compressors to inject it into depleted reservoirs. All this implies plenty of available infrastructure, such as a beach terminal like St Fergus or Bacton.
Green hydrogen will be the natural choice in other regions, perhaps because of an excess of renewable energy generation capacity. As it is, there is not enough capacity to export all of Scotland’s wind-generated electricity south; and solar power in Cornwall can also struggle to get on to the grid. There might also be strong local opposition to blue hydrogen, as it is only seen as an interim measure, and relies on a fossil fuel.
But the needs of the region where the hydrogen will be used must be considered in tandem with its production, according to speakers at the launch event of Net Zero East April 14.
Focusing on consumers and producers in Norfolk and Suffolk, the aim of the initiative is to co-ordinate energy projects in every sector in order to satisfy consumer demands in as sustainable a way as possible. It fits with UK energy markets regulator Ofgem’s promotion of local area energy planning as a “key enabler” of decarbonisation.
Too much of the transition is being “done” to regions, rather than in collaboration with them, said co-founder of NZE Nigel Cornwall. And yet the green transition will stand or fall by making the most of every resource there is in each region or zone and leaving no money on the table.
Speakers at the event made much of the need for concrete data and viable, investable plans that took account of regional agriculture, industry, housing stock, transport needs, conventional power generation and offshore infrastructure such as windfarms. The approach taken to decarbonise Edinburgh for example will not be suitable in Felixstowe. Housing stock, industry, agriculture, weather – all these vary widely around the UK.
Unlike East Anglia however, most of the UK's local authorities are satisfied with declaring a climate emergency and considering that to be “job done,” one speaker said.
Obstacles
The biggest problems in the way of efficient local generation and consumption are regulation and an outdated energy trading system. The UK power market is very lumpy, with one price for the same period nationwide. A number of different regions each generating their own prices would give consumers a reason to save energy and be creative. And a radical overhaul might be possible, with new incentives for distribution network operators under the regulatory price control that rewards efficient and low carbon energy production and use.
Redesigning the power market to create a nodal system would encourage better connections: wind could be co-located with nuclear; or with Bacton to co-ordinate hydrogen generation, said Ed Birkett of the Policy Exchange speaking at the event.
He said the UK government’s consultation for evidence last December for a high renewable, net zero electricity system “could lead to a full-blown process of power market reform.” The design has not been revised for over 20 years, but the generation mix has changed beyond recognition.
Indeed last summer was seen as a preview of the future, when renewable energy had a very high percentage of the power mix and consumers’ bills shot up as the high-voltage operator took many more actions than usual and at greater costs to balance the system. The system still needs spinning reserve to provide stability.
The success and speed of the energy transition at the lowest cost will most likely depend on a full appreciation of conditions on the ground. Local authorities, transport systems, industry and agriculture all have inputs to the discussion and their inclusion in discussions at the outset will perhaps avoid mistakes being made later.
Cornwall, who used to run the consultancy Cornwall Insight before it was bought by the British Growth Fund a few years ago, said that the energy transition was a local matter and it was time to move beyond the “binary discussions” about legacy assets, and metropolitan and urban populations. As the costs of balancing the UK grid are rising exponentially, he said, the system is struggling to cope and specific solutions are needed. East Anglia’s coast is home to some 200 wind turbines, 150 gas platforms and Europe’s largest potential CO2 storage facilities.
There is already a green hydrogen movement spearheaded by Hydrogen East, another initiative of Cornwall’s, which is neither an advocacy nor supply-chain led organisation but a research body. Its report into the options is due to be published late April. Its argument is that societal changes of the scale required to achieve net zero carbon is best left to local solutions. It is looking to develop a hydrogen cluster, building on the region’s existing strengths in offshore wind, gas landing and distribution and nuclear power.
Among the approaches that could be considered are green hydrogen, using wind farms offshore to electrolyse water at a low cost when the power is otherwise not needed. There is also the Sizewell B nuclear plant which has been "constrained off" – or turned off for non-operational reasons – since last summer, owing to excess generation from renewables and low power demand.