EnergyPathways – Collaboration with Government on Hydrogen Storage
EnergyPathways plc (AIM: EPP), an energy transition company developing low carbon integrated energy solutions in the UK, is pleased to advise that Department of Energy Security and Net Zero (DESNZ) has invited EnergyPathways to participate in the Hydrogen Storage Business Model (HSBM) Design Group. This group comprises a select number of companies, including several Tier-One companies that are at the forefront of the UK’s energy transition.
The HSBM, when finalised following consultation with the Design Group, will define DESNZ’s new investment support scheme to promote the development of hydrogen storage projects.
EnergyPathways expects the first DESNZ Hydrogen Storage Allocation Round to be launched during 2025 and intends to submit an application for its large-scale MESH natural gas and green hydrogen storage project.
Hydrogen Storage in the UK
In order to achieve the UK’s ambitions of up to 10 GW of low carbon hydrogen production capacity by 2030, a significant build-out of hydrogen storage and transport infrastructure will be needed.
Hydrogen storage at scale will be important in the UK’s future energy system in order to harness renewable power that would otherwise be wasted. Excess electricity generation from renewable sources, arising due to network constraints or low demand, is already a challenge for the UK, with wind generators being paid to turn-down or curtail. The UK’s annual constraint costs are expected to rise from around £2bn per year to around £8bn per year by 2030.
The initial focus of government support in the first Hydrogen Storage Allocation Round is expected to be on scalable geological storage for green hydrogen. The National Grid Energy System Operator suggests that up to 2 TWh of geological storage could be required by 2030 and that somewhere between 11 and 56 TWh of storage could be required by 2050. Locating electrolysers and hydrogen storage behind network constraints is seen as the best means to utilise these otherwise wasted constraint costs.
Government guidance indicates that projects will be prioritised that can unlock whole of energy system benefits, enable decarbonisation at pace and advance the development of a hydrogen market. Projects that are expected to be ranked highly will:
· connect hydrogen producers with consumers and balance misalignments in energy supply and demand;
· enable low carbon-fuelled flexible power generation to complement intermittent renewable generation;
· provide at pace decarbonisation pathways for unabated gas generation and gas use;
· be capable of repurposing natural gas infrastructure and reducing decommissiong costs; and
· connect new hydrogen production to new demand centres.
DESNZ has indicated that it plans to complete the design of the HSBM in 2025 and aims to announce the launch of the first Hydrogen Storage Allocation Round during 2025. Through this process, a shortlist of projects will to be taken to due diligence and negotiations stage, with successful projects announced after approximately 12 months, subject to administrative and legislative arrangements including licensing.
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EnergyPathways – Collaboration with Government on Hydrogen Storage, source
