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Decentralised hydrogen

image credit: Courtesy Demo4Grid and Green Energy Center Europe in Innsbruck
philip LEijTEN's picture
Director Soka Solutions

Energy professional with comprehensive skill-set in the project development cycle across the technical, commercial and economic modeling space. Available to take on responsibilities for renewable...

  • Member since 2020
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  • Nov 3, 2020
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Another informative webinar last week on green hydrogen hosted by Nadim Chaudry of GreenPowerGlobal and the Hydrogen Leaders network. This time on electrolyser technology and what it takes to scale up to 10MW plants, and (much) bigger. Lots of nuggets on hydrogen schemes, I share a few here.

One of the sessions concerned the choice between centralised and decentralised hydrogen production. This is a question that pops up often in business and I’m sure many of you have dealt with such choices, as have I. The 1 GW (or bigger) schemes tapping into North Sea wind involve so much scale that hydrogen production will be central (whether onshore, or offshore). Of course, this means infrastructure needs to be put in place to transport all that hydrogen to the end-consumers. The regulator will need to ensure access to infrastructure can be negotiated to achieve this where this transport involves pipelines (the cheapest solution).

Decentralised schemes offer proximity to the end-consumers but rely on niches of local, cheap renewable energy. That can be on offer when local renewable energy production exceeds local demand and there are grid capacity constraints. This monetising of curtailed renewable power production includes grid balancing as a service and the beauty of smaller, decentralised schemes is that they can thus be tailored to the local situation.

Take for example this 4MW scheme under construction near Innsbruck, Tyrol (Austria) where a large regional supermarket chain (MPreis, I know them from my skiing holidays over there) is the anchor hydrogen off-taker: https://www.demo4grid.eu/project/

Power is drawn in from the local grid at low prices (during curtailment) as the system provides primary and secondary grid balancing services. Provision of baseload power through a local hydropower plant can be added later to increase hydrogen production. Key enablers for this rapid response are the pressurised alkaline electrolyser (as opposed to non-pressurised) and hydrogen storage. The latter decouples the electrolyser from hydrogen demand so that it can be turned down or up depending on available power without the customers running short of the agreed hydrogen supply.

Ultimately, this scheme will produce hydrogen for four different applications:

  1. Industrial heat for MPreis’ bakery and butchery
  2. FCE trucks for MPreis’ fleet of vans, forklift trucks, and trucks
  3. Public transport: FCE busses
  4. Private mobility: hydrogen for FCEV’s of local residents

Clearly, MPreis wants to decarbonise its supply chain and it is the sort of thing ec-conscious consumers are beginning to demand from their supermarket retailer. What I’m missing is an indication that the oxygen produced is monetised. And if the same is true for the waste heat from the pressurised alkaline electrolysis (PAE) which the co-location next to the MPreis plant offers. At 15-20% of installed capacity, this waste heat could be between 800-1000kW at peak load. That is a reasonable amount which would free up more hydrogen to sell to mobility customers improving project economics.  Provided of course that the investment to capture and transfer the waste heat provides an acceptable return in the first place.

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Matt Chester's picture
Matt Chester on Nov 3, 2020

Decentralised schemes offer proximity to the end-consumers but rely on niches of local, cheap renewable energy. That can be on offer when local renewable energy production exceeds local demand and there are grid capacity constraints. This monetising of curtailed renewable power production includes grid balancing as a service and the beauty of smaller, decentralised schemes is that they can thus be tailored to the local situation.

From a carbon standpoint, having an immediate solution to the excess renewable generation is one thing, but would the availability of hydrogen production then provide incentive to further build out excess renewables? Can that help tilt the economic scales in the favor of this pathway? 

philip LEijTEN's picture
philip LEijTEN on Nov 5, 2020

Hi Matt, that's a really interesting perspective that widens the context. One factor in whether an existing hydrogen scheme triggers further build out of local renewable energy production, as you describe, is whether the initial investment facilitates it. One can think of space to expand reserved in plotplans, modular configuration in balance of plant, oversizing the grid connection and so on. Often I have seen these 'pre-investments' for follow-on projects not survive the economical challenge that comes with an uncertain, future cash flow. 

On the demand side, having an existing local scheme derisks revenue streams considerably. That said, in the Demo4Grid example because it is a decentralised scheme, there might be limits to how much local untapped demand can be satisfied before one needs to look at transporting hydrogen to customers further away. 

philip LEijTEN's picture
Thank philip for the Post!
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