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What is becoming clear in the attempts to reach net-zero greenhouse gas emissions by 2050, is that there is not one simple solution; huge changes need to be made to the way we power our businesses, heat our homes and fuel our transport, but what role does hydrogen have to play in this?
Hydrogen is found in water and is the most plentiful element in the world – it is an energy intensive gas that can be used for transport, heat and power – whilst only emitting oxygen and water. It is for this reason that hydrogen is being considered as a legitimate option to make a significant contribution to decarbonising energy.
A report by GenComm (and its project partners, National University of Ireland Galway (NUI Galway), Dublin City University and HyEnergy) exploring the opportunities for hydrogen in Northern Ireland found that:
“Northern Ireland is uniquely positioned in the United Kingdom (UK) and Europe to become a leader in hydrogen deployment and technology. Abundant, and in many cases untapped, onshore, and offshore renewable resources, modern gas and electricity networks, interconnection to both Ireland and Great Britain, a relatively small geographic area, availability of salt cavern storage, and an internationally recognised track record of engineering and manufacturing innovation give Northern Ireland a competitive edge. Third-level education and research institutes, exemplified by Belfast Metropolitan College and Ulster University, are leading the way in hydrogen training and safety.”
As with any early-stage technology, hydrogen is more expensive than its fossil fuel equivalents; government policies and public funding will therefore play a key role in the development of the hydrogen economy to bring down costs to the point where it can be commercially viable.
Last year the Department of the Economy provided £5million of support to NI Water to procure an innovative 1MW hydrogen electrolyser at its Waste Water Treatment Works – the first project of its kind in Northern Ireland. Water will be fed into the electrolyser which produces oxygen and hydrogen; the oxygen can be used to increase capacity at the Waste Water Treatment Works, reducing the need for investment that would otherwise be needed, and the hydrogen produced can be used to meet future energy demands across transport, heat or power.
Earlier this year the Ballymena-based bus manufacturer, Wrightbus, was awarded £11.2m from the UK government to develop hydrogen-fuel technology. The money will be used to manufacture low-cost hydrogen-fuel cell technology for buses at its Ballymena site. Three hydrogen powered buses have been introduced by Translink with a further twenty ordered from Wrightbus. At £500,000 each, a hydrogen bus is twice as expensive as a diesel equivalent but it is hoped that government sales will drive volume and reduce the cost. The hydrogen used to power the buses is being produced using electricity from a County Antrim wind farm.
Despite the success in increasing the level of renewable electricity generation on the grid, 17.4%, nearly 300,000 MWh, of NI’s wind generation failed to reach consumers due to dispatch down in the first half of 2020. This is the highest figure for any region in the Single Electricity Market. The need to tackle rising levels of dispatch down/wastage is important in ensuring the continued cost-effective growth of renewable energy in NI. A variety of solutions are needed, including increased interconnection, development of the transmission grid, and demand side management. Energy storage, including that provided by hydrogen, can also play a key role in minimising the wasted energy resulting from dispatch down. A key advantage of hydrogen is the fact that it can be stored on a large scale, which enables the system to cope with large swings in demand as well as allowing for inter-seasonal. NI has the potential to utilise its existing windfarm infrastructure to power water electrolysis to produce hydrogen.
The consultation on policy options for the new Northern Irish Energy Strategy produced by the Department of the Economy, places a great deal of emphasis on the role of hydrogen in reaching net-zero targets, but also as a significant driver of the green economy. It cites the importance placed on hydrogen by the European Commission in driving the EU’s green recovery and the role of hydrogen in the Prime Minister’s Ten Point Plan for a Green Industrial Revolution. One report suggested that hydrogen solutions could unlock up to an estimated 75,000 jobs in the UK by 2035. Wrightbus has said that the creation of a centre of excellence for zero-emission technology would safeguard more than 1,000 skilled jobs, and will allow them to create more than 3,000 additional jobs over the next 10 years.
Consensus across industry and policymakers is that a robust support regime will be key to the uptake of emerging hydrogen technology, in particular in its early stages of development. The development of incentive schemes for hydrogen projects will play an important role in the bankability of projects and the structuring of any project financing. As the size and complexity of hydrogen projects grow, project finance is likely to play an important role in the expansion of the sector.
If Northern Ireland’s ambitions on hydrogen are clearly articulated and a pathway to exploit the potential mapped out, the development of a hydrogen economy would provide real benefits in decarbonisation and energy security but also in economic growth, jobs and innovation for the region.
This article has been produced for general information purposes and further advice should be sought from a professional advisor. Please contact our Energy & Renewables team at Cleaver Fulton for further advice or information.