In the light of increasing climate instability and with aspersions cast on nuclear generation following the disaster in Japan, countries across the world are investing heavily in renewable energies, particularly wind and solar power. These energies are both fundamentally sustainable and inherently variable. Intermittency means that most electricity grids cannot support the large-scale employment of renewables – mismatches in supply and demand are inevitable as consumer demand does not vary with the strength of the wind. Furthermore in periods of excess, large amounts of electricity can be lost simply because the grid cannot accept it.
In the UK in 2011 a total of £15.8 million was spent paying operators of Scottish wind farms to constrain their supply so as to not overload the grid. The total energy lost was 75,000 MWh, for which customers paid 21p/kWh. Already this year (to September) a total of 85,000 MWh has been constrained, costing customers around £17 million in constraint payments. Clearly energy storage is needed between renewables and the grid to prevent such waste of resources.
Hydrogen’s potential as an energy vector is well known and it has an important role to play in the storage of renewable energy. An implementation of this that is rapidly gaining interest is power-to-gas: using electrolysers to convert electricity to hydrogen that is then injected, stored and distributed through the existing natural gas grid, where there is huge potential for energy storage. Electrolysers are still an expensive technology, particularly at the megawatt scale, but the capital spent on them would lead to savings on constraint payments. Furthermore the payback case can be enhanced through the direct monetisation of the hydrogen produced. This can be achieved through the sale of wind-electrolysed hydrogen as fuel cell electric vehicle (FCEV) fuel as the cars begin to enter the commercial market. EU estimates for the sale of hydrogen as fuel stand at €5–10/kg. In more comparable terms, the US Department of Energy targets are for $6/gge (gasoline gallon equivalent) by 2020, which equates to €1/£0.80 per gasoline litre equivalent.
The wind farms that are paid most heavily to constrain their supply, predominantly in Scotland for the UK, should be targeted first. Electrolysers could be deployed at these sites, producing hydrogen for grid injection; then, when the time comes hydrogen can either be dispensed locally or delivered to refuelling stations nationwide. Furthermore, regions that have clean hydrogen already available will be more likely to attract FCEV.
Even before the arrival of FCEV, the electrolysers will begin to pay for themselves as they lower the constraint needed at these key wind farms. Additionally, the contribution of renewably-generated hydrogen into the gas mix begins to decarbonise the network, and can slowly begin to reduce demand for imported gas, strengthening the nation’s energy security. Extrapolate this to the entire EU, where €200 billion per year is spent on importing fossil fuels and where abundant wind resources exist, and the case for electrolysers looks even stronger.
Electrolysers certainly look to be an economically viable solution to the imbalance of renewables, and it is thus unsurprising that this principle is gathering momentum the world over. Hydrogenics is working with natural gas carrier Enbridge to develop utility-scale hydrogen energy storage solutions in North America. In Germany, Greenpeace Energy and Gasunie have signed a cooperation in which Greenpeace Energy will construct a wind-powered electrolyser, the hydrogen from which it will distribute under its ‘proWindgas’ tariff via Gasunie’s natural gas network. This is just one of around a dozen such projects planned in Germany, as can be seen in the attached diagram. Germany is already a key launch market for FCEV and the use of windgas as fuel would only bolster this position.
Electrolysers can prevent the expensive wasting of abundant wind resources; they can help decarbonise gas networks and increase energy security; they can produce profitable hydrogen for FCEV, and in turn encourage the deployment of FCEV, thus aiding the decarbonisation of personal transport. And they will only get cheaper over time. Suddenly capital cost doesn’t seem such a bad price to pay.
Jonathan Wing Market Analyst
Photo: A Mercedes-Benz fuel cell car drives past wind turbines (Source: Daimler)