Hydrogen-fired power plants could be a cheaper way to provide low-carbon flexibility for the UK than using either short-duration energy storage or new gas-fired peaking plants fitted with carbon capture and storage (CCS) technology, according to modelling by consultancy Aurora Energy Research.

Replacing gas-fired peaking plants, the current source of flexibility on the system, with hydrogen-fired facilities could save up to £90bn ($103bn) of capex compared with relying on short-duration storage, as the UK looks to meet a government target of decarbonising the electricity system by 2035, Aurora says.

It puts the cost of replacing gas-fired peaking plants with hydrogen-fired plants by 2035 at £21bn. Replacing the gas plants with two-hour batteries by 2035 would cost £112bn, while replacing them with four-hour batteries would cost £82bn, Aurora’s modelling shows.

Replacing gas-fired peaking plants with new-build gas plants with CCS would be more competitive than short-duration storage on a capex basis, coming in at £22bn. But hydrogen-fired peaking plants would be cheaper to run than CCS gas plants at the low load factors necessary for flexible generation, Aurora says.

“With more and more solar and wind generation in the power mix, the grid will need sources of dispatchable power to meet demand” Ganbold, Aurora

The levelised cost of electricity (LCOE) generated by a hydrogen-fired power plant commissioned in 2030, operating at 10pc of total generation capacity, would be up to £47/MWh—or 20pc—lower than the LCOE for an abated gas plant commissioned in 2030 operating at the same load factor, Aurora says. The spread between LCOEs for hydrogen and abated gas plants widens as load factors fall, climbing to £400/MWh—or 53pc—at 2.5pc load factors.

“With more and more solar and wind generation in the power mix, the grid will need sources of dispatchable power to meet demand. We compared the cost of using hydrogen-fired peaking power plants with new abated gas plants and found the former to be more economic, both on an LCOE basis and total capex,” says Anise Ganbold, head of research for hydrogen at Aurora.

Power supply

The UK could produce all the hydrogen needed to fire peaking plants by 2035 using renewable and nuclear electricity, Aurora says. It projects that 8TWh of renewable power generation would be curtailed in 2035.

“This surplus power could be used to produce hydrogen via electrolysis, creating an additional revenue stream for renewables generators as well as a zero-carbon fuel for peaking plants,” Aurora says.

However, additional renewable and nuclear capacity would need to be installed to provide the 13TWh of power needed to produce enough hydrogen to feed peaking power plants.

Aurora says it has factored the cost of this extra capacity, as well as the cost of installing 10TWh of seasonal hydrogen storage capacity, into its £21bn hydrogen power capex estimate.

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Author: Stuart Penson