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Net Zero, carbon capture and hydrogen: Regulatory developments 

 960 640 Stuart O'Brien
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By Matt Lewy (pictured), Energy Partner at law firm Womble Bond Dickinson

The UK government is pressing ahead with the development of the regulatory regime for carbon capture, utilisation and storage (CCUS), following the latest suite of updated business models published in May 2021.

Ultimately the CCUS regime will look like many regulated utilities, with a fixed (or regulated asset base) return paid to operators and investors. That said, there is risk inherent in developing the transport and storage components of a technology largely unproven at significant scale. This is coupled with a need to ensure enough power plants and industrial emitters connect to those systems at an early stage, in order to make them financially viable.

The business model updates look at options for mitigating those risks, with the government ultimately providing backstop support. At this stage, it has not been confirmed who will be the regulator for the industry, and whether this role will be split between the onshore and offshore elements.

The government is running a procurement process, with nascent CCUS clusters in UK industrial heartlands bidding to become one of two priority, or track-1, clusters. These will work with the government in implementing the regulatory regime and developing the returns model both for the development and operational phases of each project. The intention is to apply lessons learnt from the priority clusters, which on current projections will be operational by the mid-2020s, to smooth the path for future investment.

The announcement of the priority clusters is pencilled in for 9 August 2021. There are probably five or six viable proposals under serious consideration. These include St Fergus in Aberdeenshire and Teesside. Whichever of the clusters are selected there will be a certain amount of levelling-up achieved, as there is a requirement to include a significant component of local supply chain content, with associated employment opportunities, within the cluster bidding process. In connection with this, the government has launched a supply chain mapping exercise, the intention being to ensure the UK becomes a market leader in the industry.

It is telling that the CCUS regime is significantly more advanced than that for hydrogen. The priority appears to be the decarbonisation of heavy industry, and learning to apply CCUS to natural gas. Gas power with CCUS will be used to provide electricity whilst the UK scales up renewable electricity generation and addresses its intermittency. Gas with CCUS will also be used in the production of blue hydrogen.

A further update on the use of hydrogen and its regulatory regime is expected from the government shortly. Whether this extends to more long term uses of hydrogen, i.e. outside the confines of localised clusters, such as in domestic heating and mass transport systems, remains to be seen.

UK businesses pledge £3bn to back British hydrogen

 802 535 Stuart O'Brien
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The UK could see more than £3 billion invested in the emerging hydrogen sector as more businesses step forward to pledge funding – but only if PM Boris Johnson backs the low-carbon fuel.

Earlier this year, cross-industry group Hydrogen Strategy Now said its members were ready to pump £1.5bn into the UK hydrogen economy. The group revealed that figure has now doubled to £3bn as more businesses line up plans for hydrogen projects across the UK.

Now bosses from leading businesses have come together to call on Mr Johnson to pave the way for a British hydrogen economy in his long-awaited energy strategy as they vowed to heavily invest in hydrogen technologies.

Members of Hydrogen Strategy Now, which combined employs around 100,000 people and has a value of £100bn in the UK, said their shovel-ready projects would create thousands of jobs across the country, helping to kick start a post-Covid green recovery.

The group has welcomed the recent appointment of Andrew Griffith, MP for Arundel and the South Downs, as the Government’s Net Zero Business Tsar, as a positive step in the right direction from Parliament.

But its members have warned that unless the sector receives load and clear backing from the Government, the UK risks being left behind the rest of the globe.

Attracting cross-party support, the Hydrogen Strategy Now collective wants to see a clear, strategic plan to help unlock significant private funding in hydrogen technologies and manufacturing across the country, driving growth and generating hundreds of thousands of green jobs.

They believe a UK-wide hydrogen economy will:

●      Create and sustain hundreds of thousands of high-skilled, green jobs, in all parts of the country and in alignment with the Government’s ‘levelling-up’ agenda

●      Drive progress to Net Zero and improve air quality in towns and cities

●      Secure private investment into the UK, and unlock export opportunities for our products and skills

●      Increase our energy security by making fuller use of the UK’s natural resources

A letter from the group to Chancellor Rishi Sunak earlier this year stated: “As you look to design a post-COVID recovery, we encourage you to focus on creating high-skilled, green jobs, in sectors that will be critical to the future economy, such as low-carbon energy, transport and heavy industry.

“These measures would be wholly complimentary to the Government’s levelling-up agenda and long-term decarbonisation goals. For example, the Committee for Climate Change has made it clear that the UK will not meet its Net Zero targets without significant investment in the hydrogen economy.

“The global hydrogen economy is estimated to be worth $2.5 trillion by 2050, supporting 30 million jobs. Other nations, such as Australia, Japan, South Korea, Canada, and China have already set ambitious strategies for growing their hydrogen economies. Just last week, Germany joined this list with their own €9 billion hydrogen strategy. The European Commission is also creating an EU hydrogen strategy, which includes plans for multi-billion euro investment in hydrogen projects, and schemes to boost sales of hydrogen electric vehicles.

“It is now clear that hydrogen is going to play an essential role in the world’s future, low-carbon economy. The increasingly bold steps being taken by other nations underlines the need for the UK to bring forward urgent measures to establish a hydrogen strategy and unlock investment and innovation. We should not risk falling behind other nations in developing our hydrogen industry.”

Huge energy storage site planned in Utah

 960 640 Stuart O'Brien
By:

A plan to launch an Advanced Clean Energy Storage (ACES) project in central Utah has been unveiled by Mitsubishi Hitachi Power Systems (MHPS) and Magnum Development.

The ACES initiative, the largest project of its kind, will develop 1,000 megawatts of 100 percent clean energy storage, thereby deploying technologies and strategies essential to a decarbonised future for the power grid of the Western United States.

Carnegie Mellon University researchers found that carbon emissions from the U.S. power sector have dropped 30 percent since 2005 (www.emissionsindex.org), because of a combination of natural gas and renewable power replacing retiring coal-fired power plants.

MHPS claims it has been instrumental in the transition and last year became the global market share leader for heavy duty gas turbines. As a next step in decarbonisation, MHPS has developed gas turbine technology that enables a mixture of renewable hydrogen and natural gas to produce power with even lower carbon emissions. 

The MHPS technology roadmap aims to use 100 percent renewable hydrogen as a fuel source, which will allow gas turbines to produce electricity with zero carbon emissions.

Magnum Development owns and controls the only known “Gulf Coast” style domal-quality salt formation in the western United States. With five salt caverns already in operation for liquid fuels storage, Magnum is continuing to develop Compressed Air Energy Storage and renewable hydrogen storage options. Strategically located adjacent to the Intermountain Power Project, the Magnum site is positioned to integrate with the western U.S. power grid utilising existing infrastructure.

In many parts of the western United States, there are times of day when demand for electricity is lower than the production of renewable power. This leads to curtailment of renewable generation and negative electricity pricing. As such, continued deployment of renewables will require that excess power be stored for later use. To serve the needs of the entire western United States, many gigawatt-hours of storage capacity are required.

Initially developing enough energy storage to completely serve the needs of 150,000 households for an entire year, the ACES initiative will deploy four types of clean energy storage at utility scale. These energy storage technologies include:

  • Renewable hydrogen
  • Compressed Air Energy Storage
  • Large scale flow batteries
  • Solid oxide fuel cells

“For 20 years, we’ve been reducing carbon emissions of the U.S. power grid using natural gas in combination with renewable power to replace retiring coal-fired power generation. In California and other states in the western United States, which will soon have retired all of their coal-fired power generation, we need the next step in decarbonisation. Mixing natural gas and storage, and eventually using 100 percent renewable storage, is that next step. The technologies we are deploying will store electricity on time scales from seconds to seasons of the year,” said Paul Browning, President and CEO of MHPS Americas. 

“For example, when we add gas turbines powered with renewable hydrogen to a hydrogen storage salt-dome, we have a solution that stores and generates electricity with zero carbon emissions.”

“Central Utah is the ideal location for this project, and Utah is a business friendly state for projects like this. Magnum’s site adjacent to the Intermountain Power Project is positioned to take full advantage of existing regional electricity grid connections, fully developed transportation infrastructure, ample solar and wind development capacity, a skilled workforce currently transitioning away from coal, and, of course, the unique salt dome opportunity,” said Craig Broussard, CEO of Magnum. 

“Magnum and MHPS are great partners. Magnum has the below-ground technologies necessary to store energy at utility scale, while MHPS has the above-ground technologies such as hydrogen-fired gas turbines, compressed air storage, solid oxide fuel cells and battery storage technology, to supply electricity at grid scale. With the ACES initiative, we will dramatically accelerate the vision of a western renewable energy hub that we launched over a decade ago.”

“The unmatched investment and innovation brought forward by MHPS and Magnum Development to rural Utah again demonstrates the power of the forward-looking energy policy I have advanced throughout my administration. Utah continues to set the standard among states for driving next generation solutions to market,” said Gov. Herbert. “I’m proud that Millard County’s skilled workforce, strategic energy infrastructure and unique geological salt domes have put Utah on the map as the epicenter of utility-scale storage for the Western United States.”

Image by Free-Photos from Pixabay

Waste2Tricity and PowerHouse Energy push solution for plastic waste

 960 640 Stuart O'Brien
By:

Waste2Tricity (W2T) has signed a binding heads of terms for engineering services with PowerHouse Energy (PHE), giving it exclusive rights to use innovative technology that turns waste plastic into hydrogen, which can be used for transport fuel. 

The company says the technology has potential to not only create a green fuel but to clean up plastic from our oceans.

W2T are the exclusive developer in the UK and South East Asia, including Japan and South Korea for the Powerhouse PLC DMG (distributes modular generation) for Waste plastic to hydrogen and electricity. 

This converts unrecyclable plastic into high-grade hydrogen for use as a transport fuel, whilst also generating power for export by private wire or to the grid.

The technology has been developed by Powerhouse Energy over several years at the University of Chester Energy Centre.  The plastics to hydrogen plant will be located at their 54-acre Protos site near Ellesmere Port in Cheshire.

Waste2Tricity are fundraising and currently in discussions with large institutional investors and hope to expand across the UK for future projects with a vision for it to be scaled out globally.

John Hall, chairman, Waste2Tricity said: “We are excited to be the exclusive representative for the Powerhouse DMG system in a number of geographical regions particularly in South East Asia, where 90% of Ocean plastic emanates from.  

“Signing this agreement with PowerHouse Energy means this technology will soon be ready for a large scale roll out to eliminate the bulk of ocean plastics and making hydrogen the go-to fuel for the future.”

The next stage of development will focus on switching the technology to allow it to produce hydrogen for use in a distributed hydrogen network as well as syngas production for generating electricity.

The Engineering, Procurement and Construction (EPC) contract is in negotiation and planning application for the development of the plant at Ellesmere Port is expected to be submitted in Spring 2019.

Subject to planning approval the plant could be operational later this year.

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