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Hydrogen islands: a foretaste of things to come?

Mon 20 May 2019 by David Foxwell

Hydrogen islands: a foretaste of things to come?

Offshore wind’s potential as a source of green hydrogen is growing, and industry leaders such as Shell, Mitsubishi Heavy Industries and Ørsted recognise that, David Foxwell argues.

The Dutch have always been good at land reclamation. Large parts of the Netherlands are built on reclaimed land. Dutch expertise has been used to build airports on reclaimed land in Hong Kong, and to create vast holiday resorts like Palm Island in Dubai.

But it is not so much the potential application of the same kind of techniques to build energy islands in the North Sea that excites me. It is what could be built on those islands. One of the things that could one day flow from the IJmuiden Ver (IJVER) project, a study looking at an offshore island providing a site for future high voltage direct current (HVDC) transformers for offshore wind, is a site for producing green hydrogen.

Netherlands Minister of Economic Affairs and Climate Policy Eric Wiebes asked transmission system operator TenneT to investigate whether it would be beneficial to place HVDC transformers on an ‘energy island’ as an alternative to the more traditional solution based on fixed offshore platforms or jackets. The conclusion was that an island solution could be 10-15% less expensive than jackets, although building an island in the required timescale might be challenging.

It is only a study at the moment but the type of island Mr Wiebes envisaged could also play a role in the energy transition as part of an interconnector to the UK. The same island could house banks of electroylsers producing green hydrogen using renewable energy, Offshore Service Facilities, a consortium of Dutch companies with experience in offshore wind and land reclamation projects believes.

As Hydrogen Envoy for the Ministry of Economic Affairs & Climate Policy, the Netherlands, Noé van Hulst noted here, the challenge usually cited as holding back green hydrogen is the cost of electrolysers. The business case does not stack up, say critics of the idea. Well, five years ago, the business case for offshore wind did not really stack up, but it certainly does now.

As Mr van Hulst noted, some big industrial players, like Engie, already have cost targets for green hydrogen. These ambitions are long term, but they do not preclude significant use of green hydrogen in the next few years. “It is already happening in Europe, where Danish wind power company Ørsted recently announced that its bid in an offshore wind auction in the Netherlands includes producing green hydrogen for industrial use,” he said.

“That shows that new business models are being invented as we speak, raising the possibility of positive surprises ahead,” said Mr van Hulst. So too does a proposal from Shell, Siemens and TenneT to organise combined auctions of offshore windfarms for electrolysis.

Mitsubishi Heavy Industries group agrees. “Hydrogen is fast approaching a tipping point,” it said. “Offshore wind’s potential as a source of electricity for green hydrogen is attractive to those developing hydrogen projects for its potential to provide utility-scale levels of electricity at low cost. But it is also attractive to windfarm owners seeking to diversify the markets that they sell their electricity into, beyond the electricity grid, and address issues such as curtailment.”

Five years ago, the idea that the UK would expect to obtain 30% of its electricity from offshore wind by 2030 and that this would be government policy would have been regarded as risible. So too would the idea from the Committee on Climate Change that the government should propose a 10-fold increase in UK offshore wind capacity – to 75 GW by 2050, up from 7.9 GW now. You would probably have been laughed out of court for suggesting five years ago that offshore windfarms would soon be ranged up and down the US east coast. It was all too expensive!

The reason that all of this is possible is because offshore wind has seen unprecedented cost reduction; and because new business models were invented by far-sighted companies like Ørsted. If the high cost of electrolysers is the main reason you are sceptical about green hydrogen from offshore wind, think again. Scale and enhanced technology will address the cost issue and, as Mr van Hulst put it, new business models are being invented all the time.

*On 21 May the Offshore Wind Industry Council said a major programme of work had begun to ensure that the UK’s low-carbon energy system makes the best use of the increasingly large proportion of electricity we are generating from renewable sources, including offshore wind. A wide-ranging group of experts and business leaders will examine how to the UK can continue to decarbonise by building a reliable modern energy system, managing variability of demand and supply, based on renewable technologies, with offshore wind playing a leading role. The group will publish a road map identifying pioneering techniques, such as using electricity from offshore wind to generate and store hydrogen as a power source.

*As Foresight Climate & Energy reported, when EU climate and energy commissioner Miguel Arias Cañete visited The Netherlands in early April 2019, he was presented with an investment plan to deliver emissions-free hydrogen at commercial scale by 2030. Companies and governments in the northern Dutch provinces of Groningen and Drenthe have drawn up a €2.8Bn plan that is intended to turn their region into a ‘hydrogen valley’ and be a springboard for the hydrogen economy globally. The initiative is supported by over 50 partners around the world.

The investment plan lists 33 projects, most of them led by one or more companies including leading firms such as Shell, Nuon, Engie, Gasunie and Nouryon. As Foresight Climate & Energy noted, the projects are varied. They include plans to build large-scale electrolysers of up to 1 GW and ‘hydrogen wind turbines’ with an electrolyser incorporated into the turbine to produce hydrogen rather than electricity.

 

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