An independent study by Energy Link has found that large-scale hydrogen storage is a more effective and better solution compared to alternative options.
Energy Link, a New Zealand-based energy analyst and advisor, has been commissioned by Firstgas Group to conduct an independent study which tested methods to meet supply and demand fluctuations in a completely renewable electricity system.
The key question to be answered by the study was – how does an electricity system utilising large-scale hydrogen storage compare with other key alternatives in delivering the needs envisaged in 2050 across all three sides of the ‘energy trilemma’?
The analyst utilised three options for the study; a pumped hydro solution, overbuilding of renewables, and large-scale hydrogen storage. In this case the two key alternatives are the MDAG Reference Case and Lake Onslow Pumped Hydro Energy Storage (PHES).
James Irvine, Firstgas Group’s Future Fuels General Manager says that the group wanted to assess if one possible use for hydrogen was to deal with increasing energy storage needs.
The study also addressed the issue of the ‘dry-year; in which a lack of rain causes a reduction in hydro-electricity generation.
“We asked Energy Link to compare hydrogen storage with two main storage options being considered by policymakers,” explains Irvine.
“Firstgas didn’t know what the outcome would be when we commissioned it but thought there was a case for hydrogen – the results were even more positive that we expected.”
A future for large-scale hydrogen storage
The scenario was created using Energy Link’s EMarket model and adjusted accordingly to match the MDAG case. Due in part to these deviances in the models, it’s not possible to obtain a perfect match – however the key attributes of the MDAG case were recreated for use in this scenario and as a base in the Onslow and hydrogen storage scenarios.
Moreover, the scenario was based off a New Zealand electricity system in which fossil-fuelled generation is phased out and replaced with a large-scale expansion of wind and solar generation that is complimented with a smart ‘demand response’ to reduce the stress on the system in times of wholesale prices.
While Energy Link notes in its report that it would be premature to jump to any firm conclusions about the hydrogen storage scenarios due to a lack of certainty with regard to future costs of constructing grid-scale electrolysers in 2050, the study shows that hydrogen storage scenarios do yield some promising benefits.
The testing determined that large-scale hydrogen storage is capable of achieving the lowest wholesale electricity process and the lowest level of price volatility. It was the only option to recover its costs from the wholesale market, essentially paying for itself.
According to the study, large-scale hydrogen storage also offers far greater security of supply with less than half the amount of anticipated emergency events and outages compared with the alternatives. Notably, all three options performed rather similarly in regard to minimal carbon emissions.
Hydrogen storage has the potential to be developed in a phased fashion and scaled up in stages, enabling the delivery of benefits faster. It can also make best use of existing assets and infrastructure, with the potential to support decarbonisation far beyond the electricity system. Hydrogen is most notable for its potential to be an effective and efficient alternative for gas consumers who are unable to electrify, such as hard to abate industries.
“The results make stored hydrogen now the lead contender to provide ‘dry-year’ capacity and provide security and affordability in a totally renewable system,” says Irvine.
“Even considering overall conversion efficiency, it is an attractive option that offers many benefits. The findings have interesting implications for the future use of gas infrastructure, particularly underground gas storage.”
Irvine says that Energy Link’s analysis is likely to inform work on the NZ Battery project, which had shortlisted hydrogen storage as one of three non-hydro options for solving the ‘dry-year’ problem.
Works are already underway in New Zealand to investigate the feasibility of large-scale storage of hydrogen in depleted natural gas fields, and Energy Link’s study further confirms that a hydrogen storage strategy warrants further investigation.
“We urge policymakers to approach renewables with an open mind. The nation cannot afford to be dogmatic about how we reach the 2050 goal,” he says.
Firstgas Group commissioned the independent study as part of what is now a four-year old programme of work preparing the transition to renewable gases. The Energy Link study follows on from the release of the company’s Hydrogen Feasibility Study in 2021.
For more information visit Firstgas.
