How clean hydrogen can make UK the ‘Saudi Arabia of Wind’
The United Kingdom is one of only a few countries that is capable of producing more hydrogen than it currently consumes in hydrocarbons, creating an opportunity to become both self-sufficient in energy and an exporter.
For the UK to fulfil its potential and become the ‘Saudi Arabia of Wind’ a number of pieces need to fall into place, including a continued decline in the cost of both electrolysers and electricity produced from wind, as well as the right level of government support.
Green hydrogen is produced by splitting water with electrolysers powered by renewable energy. Almost no greenhouse gases are emitted in its production and none when it is consumed in fuel cells to generate power. Even burning it in combustion engines produces no carbon emissions.
Currently, it is more expensive to produce green hydrogen than the grey variety, which is made by steam reforming natural gas to create the same end-product, but releases carbon dioxide in the process.
The cost of producing green hydrogen with offshore wind varies between £2.12/kg and £4.86/kg, with an average cost £3.83/kg, according to calculations from Imperial College London. That compares with a range of £0.8/kg to £2.0/kg for grey hydrogen in 2021 before Russia’s invasion of Ukraine sent natural gas prices spiralling upwards.
To bridge the gap until prices decline, and generate demand for green hydrogen in the short- and medium-term, government support will be necessary.
For the UK to fulfil its potential and become the ‘Saudi Arabia of Wind’ a number of pieces need to fall into place, including a continued decline in the cost of both electrolysers and electricity produced from wind, as well as the right level of government support.
The UK has vast offshore wind resources. It currently has 14 GW of offshore wind fully commissioned, the second highest figure globally behind China and enough to power more than 10 million homes. The government has a target of 50 GW of offshore wind capacity by 2030 and a fully decarbonised grid by 2035.
The waters around the UK have the potential to host up to 140 GW offshore wind capacity by 2050, according to The Crown Estate, which owns it. That compares with total electricity generation capacity of 76.7 GW in 2022. That leaves plenty of room for generating hydrogen from surplus offshore wind capacity.
The cost of offshore wind in the UK has plummeted in recent years due to technological advancements, economies of scale and government held competitive auctions. The first developers to receive government contracts in 2015 were guaranteed prices of above £114/MWh, while in 2022 that had fallen to a record-low £37.35/MWh.
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And while there was a bump in the road at the UK’s latest renewable energy auction in September, when no new offshore wind capacity was added thanks to soaring inflation, power generated by offshore wind continues to be considerably cheaper than natural gas, which has been around £100/MWh for most of this year after spiking above £500 in 2022.
With bigger turbines and greater scale as other nations develop their offshore wind programs, prices are likely to begin to fall again.
Green hydrogen is a great fit with offshore wind for a number of reasons. It could help overcome a key barrier to the UK’s energy transition: the lengthy backlog for new connections to the grid. Developers are having to wait 6-10 years to connect to regional distribution networks because of constraints on the grid.
By producing hydrogen with the electricity generated by offshore wind and transporting it back to shore through pipelines or ships, grid connection waitlists are be avoided.
Turning wind into hydrogen can also minimise the amount of curtailed wind electricity, where wind turbines are switched off when more power is being generated that can be accepted by the grid. Green hydrogen offers a way to store surplus electricity generation avoiding wind energy from being wasted, while simultaneously reducing our current reliance on fossil fuels for back-up power.
The other major cost for green hydrogen production is electrolysers. However, the capital expenditure of electrolyser systems are expected to fall dramatically in the coming years. The UK government predicts PEM electrolysers, for instance, to halve in price by 2030 and fall a further 20% by 2040.
Turning wind into hydrogen can also minimise the amount of curtailed wind electricity, where wind turbines are switched off when more power is being generated that can be accepted by the grid.
There have also been a number of major technological breakthroughs in electrolyser technology in recent years that could bring a step change in the cost and efficiency of such systems.
Earlier this year, a team from Korea Institute of Science and Technology’s Hydrogen and Fuel Cell Research Center announced the development of a technology that can substantially decrease the quantity of precious metals used in electrolysers while maintaining performance and durability.
Around the same time, UK-based Oxford nanoSystems announced that its proprietary coating called nanoFLUX can improve the hydrogen production capacity of alkaline electrolysers by over 50% and could lead to “radically” reduced production costs.
A lot of clean hydrogen is going to be needed if the world has a hope of achieving net zero. The IEA’s Net Zero by 2050 Scenario sees global hydrogen demand increasing almost sixfold from around 90 million tonnes in 2020 to 530 million tonnes in 2050, of which 60% will be met by green hydrogen.
The UK has ambitious targets for low carbon hydrogen production, with the national target of 10 GW by 2030 (at least 50% met by green hydrogen).
If these ambitions are realised, the UK could play a significant role in exporting clean hydrogen to nearby countries such as France, Belgium and the Netherlands, which anticipate the need for considerable hydrogen imports to decarbonise industry.
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