Scaling Up Renewable Hydrogen [NGW Magazine]
The energy sector is getting ever more ambitious about the scale of projects to convert renewable electricity into a storable commodity: hydrogen. Projects of 5 MW have been built, with 10 MW units under development. The next leap will be to projects of 50 or 100 MW, but these have yet to be sanctioned.
Two technology firms, Canada’s Hydrogenics and the UK’s ITM Power, have told NGW how demand for ‘Power to Gas’ (PTG) is growing and how it may be a more flexible and competitive way to store decarbonised energy than battery technology.
With PTG, (sustainable) electricity is converted into hydrogen by 'electrolysing' water, releasing oxygen as a by-product. The hydrogen can be either injected into a gas network or used in transport or manufacturing.
Typically, networks are looking to blend hydrogen into public gas distribution systems at 2% to 3% by volume.
UK regulator, the Health & Safety Executive says that, from a safety perspective, hydrogen of up to 10% by volume in the gas system is safe – whereas at between 10% and 20%, the regulator said it would want to identify ‘vulnerable appliances.’
The substitution of 10% of natural gas in the UK gas system with hydrogen could be economically significant, given UK yearly demand of 80bn m³.
Small PTG units already running
California-based Hydrogen Technologies installed a small electrolyser in 2004 on the Norwegian island of Utsira that, under a partnership with then Statoil and German turbine maker Enercon, formed part of the world’s first combined wind power and hydrogen plant.
One of the earliest developed specifically for the gas sector was a Hydrogenics-built 2-MW electrolyser for E.ON (now Uniper) and Swissgas that began commercial operations in August 2013 at Falkenhagen in Germany and can produce 360 m³/hr of hydrogen.
This year, that unit was paired up with a methanisation unit, built by ThyssenKrupp producing up to 57 m³/h of syngas at normal pressure and temperature which can flow straight into the public gas system.
In 2015, Hydrogenics completed a 1.5-MW electrolyser at an E.ON site in Hamburg. Then it was the world’s most power-dense stack for the generation of hydrogen. Three years on, Hydrogenics has installed a 2.5-MW electrolyser in its home state of Ontario; owned and run by a joint venture between Hydrogenics and Canada’s Enbridge, it is now providing regulation services under contract to the Independent Electricity System Operator (IESO) of Ontario. A further 2.5 MW will be added “over the coming year”, Hydrogenics CEO Daryl Wilson told NGW in October.
Hydrogenics has now delivered over 25 MW of energy storage capacity, said Wilson in July. Its Ontario plant was the first multi-MW unit to start operating in North America. It can stabilise grids either by taking power off the system, or by adding hydrogen to the gas network.
UK competitor ITM Power has already built two PTG units in Germany. One at Ibbenburen in the northwest German state of North Rhine Westphalia was installed in 2015 on behalf of utility RWE.
ITM’s CEO Graham Cooley tells NGW that Ibbenburen’s efficiency in terms of converting electrical energy in, to hydrogen energy out, is about 75%. But he notes that RWE tested the facility and said that, inclusive of waste heat recovered, the total efficiency achieved was 86%.
Another electrolyser known as the ‘Thuga PTG plant’ was installed by ITM in Germany in 2013; it was fully deployed 2015 as a network balancing tool to absorb otherwise unwanted electricity output.
In France, by contrast, the main gas network GRTgaz had pledged to open a 1-MW PTG pilot plant near Marseilles this year called ‘Jupiter 1000’. Norwegian electrolyser-maker Nel had discontinued its support for the rollout of small PTG plants in France that had been agreed in 2017 with local firm H2V Product.
Although it’s clear such projects have benefited from significant local or national (and EU) funding, developers nonetheless are very reluctant to discuss project costs. The Ibbenburen pilot unit, though, is reported to be just 0.15 MW but to have cost €2mn ($2.3mn) to build.
Costs per unit fall, as projects are scaled up. A clean energy analyst, Chris Goodall, last year forecast that manufacturers’ cost of making electrolysis capacity by 2018-19 would be around £700,000 ($0.91mn) per MW, citing ITM as having said it was already below €1mn per MW.
Other hydrogen plant specialists worldwide including Nel Hydrogen (Norway), Nuvera (part of Hyster-Yale Group) plus Proton Onsite (both being from the US) and others too. These have also been pioneer developers of fuel cells. However, ITM and Hydrogenics seem to have focussed on the PTG market and recur among many of the utility sector’s pilot developments.
Unique selling points
ITM and Hydrogenics each say their products have particular strengths that suit the PTG market.
Wilson identifies the energy density of Hydrogenics’ systems as its unique selling point: “We deliver up to a 3-MW system in a single [fuel cell] stack. All of our competitors require multiple stacks to achieve 1 MW, or certainly 3 MW.”
ITM says it integrates rapid response and self-pressurising polymer electrolyte membrane electrolysis. “You can turn our electrolysers on or off in less than a second,” notes its CEO Cooley. That immediate response is very beneficial, compared with the minutes and hours it might take to ramp a generator up and down.
Cooley argues that the benefit of any hydrogen system is that any surplus commodity produced can be stored – in the gas grid, or gas or hydrogen storage. Its electrolysers can run for 24 hours, or a year, if desired, and they mop surpluses of wind power that the electricity grid alone might struggle with – on warm or windy weekends in particular.
Hydrogenics chief Wilson told NGW that 5 MW is the largest electrolysis project it has built to date: “But we have other projects in bid at 10 MW, 20 MW and 25 MW which are likely to proceed in the near term in North America and Europe.”
ITM said it was “responding to enquiries for much larger plant for bus and heavy goods vehicle refuelling stations in the 1-MW to 10-MW range and, increasingly, industrial applications ranging from power-to-gas, refineries and steel making in the 10-MW to 100-MW range.”
ITM has a deal pipeline of £30mn of orders signed or in the final stages of negotiation, Cooley said in October, and moreover lately signed an agreement to share its hydrogen technology with Japan’s Sumitomo and thereby enter the Japanese PTG market. That list of orders includes a 10-MW electrolyser for Shell at its Rhineland refinery at Wesseling, Germany.
ITM sees the global ‘tender opportunity pipeline’ as worth £250mn over a multi-year basis, of which PTG represents one-third of the pie, clean fuel (filling stations) half, and renewable chemistry one-sixth. Not all will be won by ITM, but all were tendered in the past 12 months, and are expected to be sanctioned by 2021.
“It’s a very strong opportunity pipeline,” says Cooley with “massive” demand for hydrogen, not least in the “decarbonising PTG” sector. He sees the tender opportunity pipeline increasing.
Wilson is more cautious about short-term opportunities from PTG, but is just as confident about the longer-term demand for its decarbonisation benefits and economic value.
Hydrogenics will soon deliver a 2.5-MW plant to Norway as part of the Haeolus wind-to-hydrogen project. Wilson admits that his firm is not often involved in preparing detailed feasibility studies for investors. Instead “typically, proponents contact us, outline a project an ask for a preliminary budget. There are quite a number of those.” Aeolus was the Greek god of the winds.
UK feasibility studies
ITM has engaged with potential developers of two large PTG projects in the UK.
ITM’s CEO Cooley tells NGW: “When we do feasibility studies, we collaborate with a number of industrial companies at once... to understand the business proposition for the hydrogen. Some are rapid investors. But it takes at least 18 months from a feasibility study to a company wanting to invest.”
In September 2018, ITM said it had secured UK public funding for a feasibility study to deploy a 100-MW power-to-gas project, “Project Centurion” at Runcorn in northwest England, for which potential investors include chemicals firm Ineos, UK gas distributor Cadent and France’s Storengy. The site has an existing 420-MW super-grid connection and planning consent for industrial scale hydrogen production. Centurion aims to demonstrate ‘low-carbon hydrogen’ at scale.
In April 2018 ITM also completed a study on behalf of UK gas distributor Northern Gas Networks for a similar 50 to 100 MW PTG project at Low Thornley, near Newcastle in northeast England, with the next step being to fund a full front end engineering design (Feed).
Continent also keen on 100-MW projects
Dutch state-owned gas infrastructure operator Gasunie in 2017 ordered a 1-MW electrolysis unit from ITM for its ‘HyStock’ venture, to be built at Zuidwending in the southern Netherlands, that will convert solar electricity into hydrogen for injection into gas. But it has bigger plans.
At a G20 ministerial meeting on clean energy in May 2018, Gasunie said it was partnering Dutch power grid operator TenneT, their Danish power and gas counterpart Energinet, and the Port of Rotterdam in an initiative, yet to be developed, to establish ‘power link islands’ in the North Sea for the balancing and transmission of green electricity from offshore wind farm. From such islands, it could be sent to the mainland via power cables, and maybe also (using electrolysis) as hydrogen.
These are network operators with large budgets in countries keen to invest in decarbonisation.
Then in June 2018, German power grid Amprion and its gas counterpart Open Grid Europe (OGE) announced they jointly want to build PTG plants in the 50-100-MW range in Lower Saxony or northern North Rhine-Westphalia. Amprion commercial director Hans-Jurgen Brick said that PTG plants to date in Germany have a maximum of 6 MW, which it and OGE want scaled up.
TenneT, Gasunie Deutschland, and Thyssengas said October 16 theirs would be the largest plant of its kind in Germany if built in 2022. Potential sites are near TenneT substations at Diele and Conneforde that mainly collect and distribute offshore North Sea wind energy. TenneT runs much of the power grid in northern Germany plus all the high-voltage power grid in the Netherlands. The trio have not yet said which specialist will design and construct the unit. They have though named it 'Element 1' (a reference to hydrogen's atomic number). On behalf of the trio, Gasunie, which would take the hydrogen and inject it into its grid, expects it would cost in the "low three-digit million" [euro] range, and that partners will carry out a feasibility study with technical details first, leading to a specific location for the project.
Neither the Amprion nor TenneT projects are close to any investment decision, but a third-party study cited in a Hydrogenics presentation in March 2018 assumes a capital cost for electrolysis capacity of €1mn/MW installed for a future 100-MW project.
Are 100-MW schemes “in the money”?
Can such 100-MW projects be realised in the current policy and regulatory framework? Hydrogenics CEO Wilson thinks not: “There is a policy gap today of monetising the value of PTX.”
“Where we can develop a project that has economically favourable decisions today, we do that. Where we can’t, then we work on the advocacy issues.”
He notes “an interesting dynamic” where naturally smaller companies want to see momentum in an area where developed concepts and prospective projects might mean large numbers. “But whether those can be fully realised on an economic basis is still an open question,” he said. “At reasonable policy values for electrical energy going into storage, for the mitigation of some taxes and uplift charges on energy involvement projects, or for green gas projects, and at reasonable prices on carbon, or reasonable values for additional attributable value for decarbonised gas, PTX projects in various pathways – I believe – will be economic. It’s not a waste of time to develop concepts and business approaches for larger scale projects.”
The largest PTX project it has built is 5 MW, with projects ‘in bid’ at 10 to 25 MW, but one PTX concept it has been working on is for 400 MW: “That one remains confidential. It’s not yet implemented, As I said there’s still a challenge to have all the policy attributes that would enable such projects.
“We’re not seeing 100-400-MW projects today that could be funded and supported on an economic basis. So, there’s an anticipatory aspect to some of these larger [announced] projects where, if the policy is established and if certain values are realised to monetise the value of the technology, then such larger scale projects should go ahead,” Wilson adds.
Likewise, ITM’s Cooley foresees a big market for grid management, where capacity for switching on and off quickly is rewarded. “If you’ve got excess renewable on the network, you want to turn on a load. Our electrolysers can absorb that wind power. If the network later gets overloaded, you can turn that electrolyser off again. You get paid for turning on and off. That’s the principle of grid- managing.”
In southern Germany – a region with a chronic lack of power grid to manage the intermittency associated with north Germany’s wind farms – a tender is underway to select the best schemes for load management, with companies already having expressed interest, and successful projects expected to be announced in April 2019.
Hydrogen: good for trains too
Aside from PTG for the utility sector, ITM, Hydrogenics and Norwegian hydrolyser manufacturer Nel are benefiting from demand for large scale hydrogen projects from the transport sector.
Speaking about hydrogen-fuelled trains under a partnership between French trainmaker Alstom and Hydrogenics, Wilson told NGW: “In late September, four trains entered regular public service in northwest Germany. They are operated by [German federal rail operator] Deutsche Bahn and are in regular use as commuter trains. They’ve been running very well. In 2015, we won a €50mn contract from Alstom [for the supply of at least 200 engine systems built at Hydrogenics’ plant in Mississauga, Ontario]. At this point, the interest in the market is extremely strong -much stronger than either Alstom or Hydrogenics had expected. The application has proven to be very attractive from an infrastructure cost point of view. So, we expect very good steady adoption. This is an area where power to gas can deliver today.” Hydrogen rail needs no overhead electric cables and so is ideal on remoter parts of the network.
“The Coradia iLint train, developed by Alstom together with Hydrogenics, has a range of 800 km and a speed of 140km/hr; it has capacity for 300 passengers,” says Wilson.
Deutsche Bahn is separately working with a consortium that includes French power giant EDF and Nel which is preparing to build a 20-MW electrolyser in Schleswig-Holstein that could refuel a fleet of hydrogen trains and other heavy duty vehicles.
In Hydrogenics’ backyard, the government of Ontario has announced a study to investigate the feasibility of ‘Hydrail’ as part of its rail electrification modernisation in Greater Toronto.
ITM too is looking at ways to improve air quality in cities across Europe and is building a 3-MW hydrogen refuelling station in Birmingham, Britain’s second city which plans to introduce a low-emission zone (charging diesel vehicles) by 2020 at the latest. ITM already has seven public hydrogen-refueling stations on main British roads, with another to be opened before the end of this year.