Electrolysis powered by renewables could provide a cheaper way to produce low-carbon hydrogen than extracting it from methane and capturing the resulting carbon dioxide emissions, the boss of ITM Power has claimed.
Chief executive Graham Cooley made the comments after the company enlisted Open Energi to provide optimisation services for its fleet of six 300kW electrolysers around the UK.
Electrolysis is the process whereby an electrical current is passed through water to separate it into its constituent elements – hydrogen and oxygen. Open Energi will use its software platform, named Dynamic Demand 2.0, to ensure the electrolysers produce hydrogen as much as possible during periods when power prices are low or renewable output is high.
Open Energi director David Hill said: “With the UK setting net-zero emissions targets into law, the potential of hydrogen to act as a clean fuel source is absolutely beyond question. This is especially true for the heating and transportation sectors, which are the most difficult to decarbonise…
“Our partnership will help unlock greater efficiencies in the production of hydrogen at scale, ultimately enabling consumers to reduce their bills and carbon footprints simultaneously.”
The gas networks in Great Britain have been developing plans to decarbonise the gas grid by converting it to run on 100 per cent hydrogen. They initially envision the bulk of the hydrogen being extracted from natural gas using steam methane reformation (SMR) or auto thermal reformation (ATR), both combined with carbon capture and storage (CCS).
In November, Northern Gas Networks (NGN) revealed proposals as part of the H21 project to create a £22.7 billion hydrogen gas grid in the north of England. The hydrogen would be produced using ATR and CCS at a 12.15GW facility (hydrogen production capacity) at Easington near Hull.
NGN concluded this would be the cheapest way to feed the network and estimated the average cost of production at £50.69/MWh, based on a natural gas price of £23/MWh.
Cooley told Utility Week the proton exchange membrane electrolysers that ITM Power uses currently cost around £800/kW for a 10MW unit.
The company expects to install 100MW facilities in the 2020s at a price of £500/kW. He said prices are likely to continue falling due to “further upscaling of the technology and increases in the manufacturing rate”.
Cooley predicted that deploying 12GW of electrolysers (electrical capacity) towards the end of the decade would likely cost just £300/kW. He additionally forecast that by 2030 wholesale power prices will be below £40/MWh for more than two thirds of the year.
On the basis of these figures and an operating efficiency of 75 per cent, Cooley claimed that electrolysis could deliver hydrogen at a price of £48/MWh. This figure incorporates a downward adjustment of £10/MWh to reflect revenues from the provision of grid services and is also reliant on the electrolysers being co-located with generation to avoid network charges.
He also touted the environmental benefits of electrolysis over the alternatives: “If the electrolyser is fed with renewable electricity it will produce green hydrogen that directly meets the net-zero objective.”
By comparison, NGN said in its H21 North of England report that producing hydrogen using ATR and CCS would still generate direct emissions of 14.4gCO2e/kWh – a 92 per cent reduction when compared to burning natural gas.
The company said supplying its proposed hydrogen network using electrolysis would cost on average £155/MWh and would require an 18.4GW production facility (hydrogen production capacity). It settled on alkaline electrolysers as the most appropriate technology in this instance.
This figure takes into account the cost of hydrogen storage. The equivalent price for ATR and CCS is £60/MWh.
Powering the facility would require 26GW of offshore wind capacity. For comparison, the UK currently has around 21.5GW of operational wind capacity – 13GW onshore and 8.5GW offshore. NGN also raised concerns over the ability to scale up the production of electrolysers.
NGN therefore concluded it would be impractical to supply the network on this basis, warning: “The technical, project execution and commercial risks are simply too high.”
Cooley’s claims also contrast with the predictions of the Committee on Climate Change, which in a report published in November, forecast the cost of producing hydrogen using proton exchange membrane electrolysers at £89/MWh in 2025 and £73/MWh in 2040. The equivalent figures for hydrogen produced using SMR and CCS are £44/MWh and £45/MWh.
CCC comparison of hydrogen production processes
Source: CCC, Hydrogen in a low carbon economy
In its Future Energy Scenarios report, National Grid ESO said the levelised cost of hydrogen (LCOH) for electrolysis is currently double that of SMR/ATR with CCS due to a combination of electricity prices, efficiency levels, the cost of electrolysers and connection charges.
But it also added: “Long-term forecasts of operations at scale in the right market conditions indicate that the LCOH could ultimately match SMR/ATR.”