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Hydrogen Supply Evidence Base–BEIS

March 19, 2021
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By Paul Homewood

 

 

I mentioned my FOI to the BEIS the other day, asking for more detail on hydrogen costs. This was what they sent me:

 

 

 

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https://www.gov.uk/government/publications/hydrogen-supply-chain-evidence-base. 

 

 

I have selected three pages regarding electrolysis:

 

 

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Beginning with the capital costs on the first page, and assuming the PEM (Proton Exchange Membrane), which I believe is the most likely system, base costs currently are £750/KW. To put this figure into perspective, Boris 10-point plan calls for 5 GW of hydrogen production capacity by 2030. CAPEX using PEM would be £3.7bn. (As we shall see later, operating costs will be more than the total cost of natural gas, so this capital spend will be money down the drain.)

Capacity of 5 GW would produce 42 TWh of hydrogen (@96% load). UK’s total primary energy consumption is 2320 TWh, so the new hydrogen capacity would be tiny in comparison. To build enough to supply a tenth of our energy needs, say, would cost about £20bn, though costs would be expected to come down with economies of scale. (These figures of course don’t include storage or distribution costs.)

We are also given the electrical efficiency, which is 55 KW per kg of hydrogen currently. The energy density of hydrogen , however, is 33.3 Kwh per kg, which means that the electrolysis process only works at 60% efficiency. In other words, 40% of the energy input is wasted.

 

Moving onto the costed example, they look at a standalone wind farm. This has the advantage of not paying for electricity distribution, but the disadvantage of intermittent operation. Note that this example is based on the lower 2025 CAPEX costs.

We know from the first table that you need 52 KWh to produce 1 KG of hydrogen (2025 assumptions). Assuming wind power costs of £50/MWh, electricity input would cost £2.60/kg. This translates to £78.08/MWh.

To that we can add:

  • Fixed OPEX for PEM = £914,000 pa. Annual output of hydrogen is 87600 MWh = £10.43/MWh
  • Variable OPEX = £0.0077/KWH = £7.70.MWh
  • Storage = £255,000 pa = £2.91/MWh

In total then, the operating costs of hydrogen work out at £99.12/MWh. This does not include CAPEX. When this is added in, according to Element Energy, the total cost rises to £137/MWh

We can compare this with the price of gas:

The current wholesale price of natural gas is around 40p therm. The conversion rate of 29.3 KWh per therm means a price of £13.60/MWh. The cost of hydrogen via electrolysis therefore will be ten times as much as gas. As I already pointed out, even the operational costs, excl CAPEX, are much greater.

 

Finally let’s compare all of this with what the CCC estimated for steam reforming costs:

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Put simply, hydrogen made via electrolysis costs about three times as much as steam reforming, which itself is triple the cost of gas.

None of this should in any way be surprising. We know that electricity costs much more than gas. We also now know that you throw away nearly half of the electricity used in electrolysis, and also have to spend money building and running electrolysis plants.

Yet some people still think hydrogen is a good idea!!

36 Comments
  1. Jack Broughton permalink
    March 19, 2021 3:54 pm

    It seems to be easy to get funds for hydrogen applications like trains and lorries: the climate-trough is always attractive to chancers.

  2. Cheshire Red permalink
    March 19, 2021 4:03 pm

    Only 10 times the price of gas? A bargain!

    Boris will be along shortly to share the joyous news of our country enjoying ‘cheap, green, renewable hydrogen power’.

    What could possibly go wrong?

  3. Ian Magness permalink
    March 19, 2021 4:15 pm

    You’d have to be a Looney to believe in all this.
    Oh, wait…

  4. March 19, 2021 4:23 pm

    It would be amusing to work out the cost with offshore wind as input, at £120-150/MWh.

    • March 19, 2021 7:10 pm

      If onshore wind at £50/MWh equates to £78/MWh, £150 would be an extra £156/MWh, effectively doubling our cost

    • Harry Passfield permalink
      March 19, 2021 9:22 pm

      Hi Bish! Any more news on the report that Mann’s case against Steyn has been dismissed? If so, could this be the crack that threatened the dyke?

  5. Peter Barrett permalink
    March 19, 2021 4:29 pm

    Can somebody please refresh my ageing memory? I recall reading that certain member(s) of the Committee for Climate Change have direct family links to companies/organisations which stand to gain from the promotion of hydrogen as a fuel in the future of the UK energy industry. This apparent direct conflict of interests seems not to have been reported widely, does a reader have a link, please?

    • March 21, 2021 4:26 pm

      It sounds more like a “happy” though typically dishonest, corrupt accordance of interests!

  6. March 19, 2021 5:13 pm

    Hydrogen expensive? Simple. Just tax fossil fuels much more heavily then hydrogen will be quite cheap-relatively speaking of course

  7. MikeHig permalink
    March 19, 2021 5:23 pm

    Paul,
    Thanks for digging out that info. It’s disappointing but no surprise that you had to resort to using FOI to get information which should be openly available to all.

    As expected, the numbers are frightful. Also I think there may be a fairly basic howler in their calculations. They state that 3 days’ storage will raise the capacity factor from 0.32 to 0.96. Aiui, capacity factors are the average of the generator’s output across the year as a percentage of the theoretical maximum output if it ran at nameplate for the whole year. So 3 days of storage would help smooth out some of the lulls but will not fill in bigger gaps, such as the 10 day doldrum spell we had recently.
    Or have I misunderstood their thinking?

    • March 19, 2021 7:08 pm

      It sounded very optimistic to me!

    • Graeme No.3 permalink
      March 19, 2021 7:52 pm

      They also state “Higher scenario of off-shore R3 wind has a 0.48 load factor so only requires 2 days storage”.
      Where will they get a load factor of 0.48 because from some figures I have only overall only 4 out of 61 off-shore wind farms average around that figure.
      The average figure for German fans was 0.384, for Danish 0.40, for Belgium 0.376 and for UK 0.379.

      There is also the problem of year to year variability; thus German off-shore average 0.352 for 2018, a drop of 8.4%. One Danish farm recorded a drop of 27% in output that year.

      It seems that their figures have a certain amount of wishful thinking.

      • Ben Vorlich permalink
        March 19, 2021 10:47 pm

        There’s a wealth of data on The Renewable Energy Foundation. Unfortunately it seems to be a bit out of date now but the load factors won’t have changed much

        “The database describes 15,935 sites with a capacity of 44,007 MW. In the year to the end of December-2019, there were 6,936 of these sites
        with a capacity of 38,584 MW generating approximately 101,382 GWh and receiving 95,310,675 ROCs. Data last updated : January-2020
        Page 1 of 160 in descending order of Latest MWh p.a.”

        https://www.ref.org.uk/energy-data

      • Phoenix44 permalink
        March 20, 2021 8:53 am

        They seem to be confused by averages. You cannot model this sort of thing based on the average, you need to model the actual data. A great deal of information is often hidden in the average.

  8. Rowland P permalink
    March 19, 2021 5:33 pm

    If hydrogen is being produced from gas, is not CO2 a byproduct which negates the whole idea instead of burning natural gas directly?

    Seems like the man of certain nationality who was stranded on a desert island. He walked round it and eventually found a boat which he chopped up and made it into a raft!!

    • Graeme No.3 permalink
      March 19, 2021 7:56 pm

      Hydrogen from natural gas is around 15% yield with the rest being CO2. Normally this latter would be vented to atmosphere but in LaLa Land it is ‘sequested’ easily and at no cost.

  9. Joe Public permalink
    March 19, 2021 6:28 pm

    Thanks for sharing that Paul.

    It contains a great deal of information that needs time to assimilate.

  10. March 19, 2021 7:07 pm

    Good to know Britain is expected to have strongly negative price inflation, aka deflation, for the next 30 years — at least where anything remotely ‘green’ is concerned.

    Marvellous 😆

  11. Tim Leeney permalink
    March 19, 2021 7:47 pm

    Hydrogen embrittles steel, leaks very readily, and has an explosion limit range of 4 to 75%. Compare gasoline wih explosion limit range of 1.2-7.1%, both in air. Considering storage in motor transport, liquid hydrogen has a hydrogen content of 71 kg/cu. m., compressed hydrogen at 700 atm (suggested by L’Air Liquide website for vehicle hydrogen tanks) has a a hydrogen content of 42 kg/cu. m.. Compare gasoline with a hydrogen content of 83 kg/cu.m. or isooctane with a hydrogen content of 109 kg/cu.m., and that’s without the extra fuel value of the carbon chain to which those hydrogens are attached.

  12. Harry Davidson permalink
    March 19, 2021 8:32 pm

    I saw a suggestion on WUWT from an engineer that a good solution would be splitting water into H3O+ and HO-. He said you need two tanks but the energy density is good which makes it a practical replacement for petrol. Can anyone offer informed comment on this? It is way beyond my expertise.

  13. March 19, 2021 10:22 pm

    When, if ever, will everyone, including Boris, come to realise that the UK’s greenhouse output, as a proportion of total global, is so trivial that no decarbonization at all could be relevant to attempts to influence the planet’s climate.

    • Gerry, England permalink
      March 19, 2021 11:03 pm

      Probably when we have gone bankrupt destroying everything so have no money to rebuild. I suppose we could hope China will offer a yen to take us over.

    • Slingshot permalink
      March 20, 2021 9:30 pm

      A pretty young girl, brimming over with idealistic zeal, came to the house to try to sign me up to the government’s green agenda to replace oil and gas CH with nice, clean electric. Kindly, I told her that all such attempts would make not an iota of difference in reducing the UK’s CO2 emissions, the UK being a tiny country, and only emitting a tiny fraction of the world’s CO2 output, and I would save the government its taxpayers’ money by saying no. She looked deeply puzzled and went away, her enthusiasm dented.

  14. Ray Sanders permalink
    March 19, 2021 11:21 pm

    I am beginning to despair. These government papers read more like an A level students extended project than anything in the real world. I would bet my house that nobody on these committees knows a damn thing about spin isomers let alone the problems of intermittent use of electrolysers causing ortho to para conversions and all the problems that entails. It really does seem like the children have taken over…who needs experts eh?

  15. It doesn't add up... permalink
    March 19, 2021 11:49 pm

    I don’t think I’ve understood how they think storage operates. Consider a 100MW wind farm. It has a long term average output of 30MW. But the output will vary all the way between zero and 100MW according to the wind. In fact, it spends 60% of the time outputting less than 30MW, so if you build a 30MW electrolyser it is only guaranteed to operate at capacity 40% of the time, so either you have to top up its power or suffer reduced output during the other 60% of the time.

    Of course, the 40% of the time when the wind is blowing strongly, there is surplus electricity that would have a low or negative value in the market. But how are you going to store it? They refer to 2.25GWh of “medium pressure storage” – i.e. they are assuming the storage will be as gas – it certainly won’t be batteries at say $500/kWh, or another $1.125bn in cost!. But how are you going to convert the surplus electricity to gas? You can only do that if you increase the capacity of the electrolyser. Say we make it 50MW. Then 5/6ths of the time it will be underutilised. Or go the whole hog and make the electrolyser 100MW, operating at an average capacity of 30% like the wind farm.

    Pilot wind/electrolyser projects in fact go the other way – they are very small capacity – so perhaps just 10MW for a 100MW wind farm, which means that they can expect to achieve reasonable utilisation, with the balance and bulk of the electricity being sold elsewhere or even curtailed.

    Having stored some hydrogen, are you going to convert it back to electricity to make a smaller quantity of hydrogen than you started with just to increase electrolyser utilisation? Surely the answer to that is no. The only possible use for gas storage is if there is a capacity constraint on the pipeline away from the electrolyser. It could be used to smooth out the flows exported. But that does absolutely nothing to improve the capacity factor achieved on the electrolyser – it just means you can get away with a smaller export pipe if you aren’t handling the peak volume of output, but only a more averaged flow. It is unlikely to guarantee a continuous average flow unless the storage is much larger.

    Meanwhile it does nothing to solve the problem that the more wind we install the greater the volume of curtailment we will endure, and the greater the problem we create for backup capacity which is still needed for essentially the total maximum demand, as we saw this winter with wind output falling almost to zero. These proposals are for stand alone operation, not absorbing curtailment surpluses.

    There is no evidence that the proposals have been modelled properly, taking account of hourly production figures over several years, and ensuring that the electricity and hydrogen flows are all accounted for. Only that can reveal the effects of prolonged lulls in wind, or a long period of high winds. Assumptions that the wind will blow again strongly in a couple of days just don’t cut the mustard.

    However, we do have at least some confirmation that green hydrogen is, as I have reported, relying on analysis by Timera, about 10 times the cost of methane as a first order ballpark.

  16. It doesn't add up... permalink
    March 20, 2021 12:44 am

    I ran a simple analysis on some 324,336 hours of refactored wind data for the UK 1985-2016 showing the average outputs for a 100MW onshore wind farm with varying capacities of PEM electrolyser installed. The output is split between hydrogen, and surplus electricity when the wind output is greater than the PEM capacity installed. Chart:

    https://datawrapper.dwcdn.net/YcdMN/1/

    It is clear that the marginal output from additional electrolyser capacity soon drops off, making further investment questionable. For example, going from 40MW of PEM to 50MW of PEM increases hydrogen output by just 1.26MW, whereas the first 10MW of PEM produces 5.67MW of hydrogen.

    I note their analysis uses the non standard Higher Heating Value for hydrogen: correcting to the normally quoted LHV would increase their cost estimate from £137/MWh to £162/MWh.

  17. Matt Dalby permalink
    March 20, 2021 12:57 am

    There is a problem with using hydrogen instead of gas for heating (either household or commercial) that I haven’t seen mentioned anywhere but is a major stumbling block.
    Individual premises, either domestic or commercial, are connected to a large distribution network. In other words we can imagine a large pipeline leaving a gas storage depot, this splits into several smaller pipes each serving a small town. Each of these pipes splits into smaller pipes to serve a part of the town, then smaller and smaller pipes to serve individual streets and finally individual buildings. Therefore hundreds of thousands, or maybe millions, of premises all ultimately rely on the same pipeline that leaves the depot. Since this pipeline can only carry one type of fuel, either natural gas or hydrogen, potentially hundreds of thousands of buildings would have to be converted to hydrogen use simultaneously otherwise people could spend months without any form of heating. Obviously it would be theoretically possible to do this by training a huge number of engineers, but the cost would be astronomical. Also if there were tens or hundreds of thousands of engineers, the whole country would be converted to hydrogen in a couple of years or thereabouts. Who would want to spend maybe 6 months training if there’s only going to be 2 years work available. For this reason alone, never mind the other costs involved, hydrogen for heating is totally unworkable. I bet the CCC haven’t thought of this.

    • MikeHig permalink
      March 20, 2021 9:10 am

      There is the precedent of the switch from town gas to N. Sea gas.
      That was less of a challenge, however, since there were fewer users, hardly any boilers to deal with and the existing local networks were already 100% compatible.
      Otoh they did have to put in a nationwide distribution system since most towns/areas had their own independent gas works.
      It would be interesting to read how thy handled it.

    • Ray Sanders permalink
      March 20, 2021 9:27 am

      You raise an excellent point. The government have considered this and produced a report. It does not however make for god reading.

      Click to access hydrogen-logistics.pdf


      Nothing is really impossible given enough time but the conversion from Natural gas to hydrogen is very close to impossible in any sort of reasonable time scale! .

  18. europeanonion permalink
    March 20, 2021 11:12 am

    I’d accept a heat exchanger on the exhaust of my gas central heating, that would save a bit. As to the rest? I’m old. Have fun. Hydrogen fuelled cremation!

  19. Tim the Coder permalink
    March 20, 2021 4:46 pm

    This hydrogen, produced so expensively from electrolysis….in what form is it?
    I would assume STP, i.e room temperature, atmospheric pressure (or close to STP).
    So what use is it? Far too dilute to store, pipe or do anything with.

    So how much more is wasted in compressing this into high pressure tanks, or liquifying it, to a storable or transportable format?
    Even putting in a pipeline will take a lot of compression.

    Perhaps it should be stored in combination with a bonding element: something to increase the density and make a storable fuel at room temperature. Carbon seems just the stuff from its chemistry: we could call the result ‘methane’ or ‘gasoline’, depending on the mix perhaps?

    • Ray Sanders permalink
      March 20, 2021 8:14 pm

      And as I have mentioned earlier at STP electrolysis will be producing an imbalance between orthohydrogen and parahydrogen. On compression the ortho will degenerate to para releasing heat and causing major problems at scale

      • MikeHig permalink
        March 21, 2021 12:11 am

        How is that problem dealt with currently? Existing electrolysers must run into this issue, like the ones that supply our few H2 fuel stations, for example.

    • MikeHig permalink
      March 21, 2021 12:12 am

      That’s what the “e-fuel” programme is all about!

    • It doesn't add up... permalink
      March 21, 2021 1:51 pm

      They claim the system will produce hydrogen at about 3MPa, or 30 bar, so presumably there are compressors included.

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