Tag: Electric Insights

It has long been recognised that low-carbon hydrogen will play an important role in the UK’s future energy system. It offers a route to decarbonise heavy industry, store energy between seasons, or to export excess low-carbon electricity overseas. Particularly in the UK, it is being explored for its complementary role in assisting the integration of offshore wind. The Government is targeting 10 GW of low-carbon hydrogen production by 2030, and has provided £240m of funding to the Net Zero Hydrogen Fund (NZHF). This will provide subsidies and capital investment to projects across the UK.

Almost all hydrogen is currently produced from high-carbon natural gas (referred to as “grey hydrogen”), but the addition of carbon capture and storage could reduce emissions (“blue hydrogen”). Alternatively, renewable electricity could be used to split water into hydrogen and oxygen in electrolysers (“green hydrogen”), reducing production emissions close to zero. The Government believes both green and blue hydrogen are crucial to the deep decarbonisation of power, transport and “hard to electrify” industrial processes. However, the use of hydrogen is becoming an increasingly contentious proposal, with critics highlighting the high costs, technical barriers, and recent global setbacks for hydrogen companies.

At the 2024 Hydrogen Investor Forum, the Government announced £21m of NZHF support throughout the UK. Three of the successful projects will produce clean hydrogen for industry and transport, while the other four will supply hydrogen to sectors ranging from pharmaceuticals to automotive. The seven successful projects are mapped below, alongside the fifteen projects supported through previous rounds of the NZHF.

The geographic distribution of projects supported under Round 1 and Round 2 of the Net Zero Hydrogen Fund (NZHF). Marker colour indicates the colour of hydrogen production being used, and marker size reflects the production capacity being planned.

Hydrogen will be competing against established fossil fuels and other emerging low-carbon technologies, including the direct use of electricity (e.g., electric arc furnaces for steel production). How expensive it is to produce and use low-carbon hydrogen will be the key factor shaping its competitiveness, and the sectors which use it for decarbonisation. The average lifetime cost of producing green hydrogen (the “levelised cost”) is driven mainly by electricity prices (the input fuel), electrolyser costs (which are expected to drastically fall by 2030), and the cost of financing projects. For blue hydrogen, the levelised cost will be driven by natural gas prices and the cost carbon capture and storage facilities, both of which are highly uncertain.

The UK isn’t the only country providing financial support for hydrogen production to help lower the levelised cost. Through the Inflation Reduction Act, the US is providing a Clean Hydrogen Production tax credit worth up to US$3 per kilogram of hydrogen, while the European Union awarded nearly €720m in fixed subsidy support through the European Hydrogen Bank. Many other countries, including Chile, India and Australia, are pushing forward with their own hydrogen subsidy schemes but have been unable to match the scale of the US and EU’s financial support.

Depending on how far and fast costs fall, hydrogen could grow to play a substantial role in the UK’s future energy system. The Climate Change Committee estimates that the UK’s demand for low-carbon hydrogen in 2050 could reach up to 376 TWh, more than current electricity demand of ~300 TWh. Developing a “hydrogen economy” in the UK could provide wider benefits beyond just emissions reductions, with the Government estimating that the sector could be worth £900m and support 12,000 jobs by 2030, rising to up to £13bn and 100,000 jobs by 2050.

Despite fierce debates over the suitability of hydrogen as a low-carbon technology, governments are pushing forward with regulations and policy support driven by the potential economic value of capturing the hydrogen value chain. Around the world, 41 governments now have a hydrogen strategy in place, up from just 15 when the UK published its own Hydrogen Strategy in 2021. Through schemes such as the NZHF, the UK Government is aiming become a world leader in producing and using low-carbon hydrogen. The next decade will show whether the UK is well-placed enough to deliver on that ambition.

The levelised cost of green hydrogen produced from onshore and offshore wind across the British Isles. Data from Bamisile et al., 2023.

Britain is surrounded by waves, and harnessing their energy could play a role in our transition to Net Zero. The Renewables for Subsea Power (RSP) project is one of the latest demonstrators, operating successfully off the coast of Orkney over the last year. Wave power is still in the early R&D phases, with demonstrators like RSP targeting specialist applications, but with continued work it has the potential to power up to a sixth of Britain’s electricity demand.

The marine energy sector covers both wave power, devices that convert the motion of waves into electricity, and tidal power, which uses the height difference between high and low tides to drive electrical turbines. The £2m RSP project combines ocean wave power with batteries located under the ocean. This balances out the intermittency of the waves, providing a continuous power supply to marine equipment such as offshore platforms or autonomous underwater vehicles used in environmental research and safety inspections of subsea cables and pipelines. The project has attracted Shell and TotalEnergies as partners, as major oil and gas companies seek ways to decarbonise their operations. This is an example of a high-value application which can act as a stepping stone towards larger deployments, in much the same way as the space race paved the way for cost reductions that led to terrestrial applications for solar panels.

The Blue X wave energy converter, built by Edinburgh’s Mocean Energy, operating off the coast of Orkney within the EMEC Test Centre. The converter is connected to a Halo underwater battery developed by Aberdeen’s Verlume.

There are dozens of wave energy sites worldwide, demonstrating machines from 1 kW up to tens of MW in scale. Just as the UK is at the forefront of offshore wind energy, many of these are hosted at UK testing facilities (see map). For example, Orkney hosts the European Marine Energy Centre (EMEC) which is a test bed for multiple technologies from UK and European manufacturers.

The UK’s key wave energy hotspots, and the strength of wave energy resource, measured in terms of the average mean power produced per metre of wave converter. For context, the Pelamis design was ~150 m in length, and the Oyster design is ~25 m in width. Reproduced from Jin & Greaves, 2021, with data adapted from the Renewables Atlas.

Scaling up these machines to supply a notable portion of national electricity demand relies on overcoming technical challenges around the extreme marine environment, and especially on reducing costs – as is common among all earlystage technologies. Wave energy converters are currently more expensive than floating offshore wind, which is in turn more expensive than conventional (fixed-bottom) offshore wind. Research investments from UKRI and Wave Energy Scotland are targeting cost reduction, for example through novel materials that are flexible and deformable to replace steel, or new forms of power take-off. Just as conventional offshore wind saw rapid cost declines in the second half of the 2010s, floating offshore wind could follow suit, and give cross-learning that helps wave energy reduce its costs also.

If these challenges can be overcome, the benefits of scaling up wave energy could be two-fold. First, wave energy could bring substantial system benefits as it complements the intermittency of wind farms, reducing the need for flexibility options such as long-duration energy storage (which is also very costly). Wave energy matches the seasonality of electricity demand, being higher in winter than in summer, and its output is offset from the profiles of other variable renewables, as well as being more predictable. Tidal energy on the other hand is available in highly predictable cycles, as tides are controlled by the orbit of the moon. The second benefit is that Britain has an opportunity to capitalise on its leading role in R&D. Extending this into a lead in deployment could potentially secure the manufacturing benefit to the UK, creating high-tech jobs and the potential for a new export industry.

The UK has seen great success in cutting the cost of offshore wind so it could become a central part of our electricity system. This was helped by effective policy frameworks such as Contracts for Differences (CfDs), offering a potential route forwards for marine energy. The UK is leading the world in terms of demonstrations, and the multi-million pound programme of funding by Wave Energy Scotland and UKRI is enabling firms to design, build and test new wave energy devices. Bringing these to market could unlock substantial benefits in terms of reduced system costs and enhanced energy security. By promoting focused investment and supportive policies, the UK could both lead in marine energy technology and also make Net Zero easier and cheaper to reach.

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Written in collaboration with the Supergen Offshore Renewable Energy (ORE) Hub – a £16.5 Million Engineering and Physical Sciences Research Council (EPSRC) programme which brings together academia, industry, policy makers and the general public to support and accelerate the development of offshore wind, wave and tidal technology for the benefit of society.

Wind power was Britain’s largest source of generation for the second quarter running – the first time it has taken top spot for two consecutive quarters. Over the six winter months (Oct–Mar), wind supplied 20% more electricity than natural gas.

Biomass and hydro output were both up strongly from a year ago, but nuclear output fell to its lowest share of electricity production since 1965. During the first three months it produced just 10.4% of Britain’s electricity, with January seeing 6 of the country’s 9 reactors offline for maintenance. Hinkley Point C was originally expected to come online last year, more than sufficient to fill the looming gap, but it is now not expected to start operations for another five years.

Share of Britain’s electricity demand met by nuclear power.

Britain’s electricity supply mix in the first quarter of 2024.

Installed capacity and electricity produced by each technology [2] [3].

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[2] Other sources give different values because of the types of plant they consider. For example, BEIS Energy Trends records an additional 0.7 GW of hydro, 0.6 GW of biomass and 3 GW of waste-to-energy plants. These plants and their output are not visible to the electricity transmission system and so cannot be reported on here.

[3] We include an estimate of the installed capacity of smaller storage devices which are not monitored by the electricity market operator.

Britain’s wind farms produced more than seven-tenths of electricity demand for the first time on 26 January. Output was boosted by strong winds in the North Sea enabling the world’s largest offshore wind farm (Hornsea Two) operating at almost 100% capacity factor. The quarter also saw the highest ever share of electricity produced from clean sources, at over 95% on 23 March. That same day also had the lowest ever carbon intensity, 33 g/kWh averaged over 24 hours. Just as nuclear output hit a new low averaged over the quarter, it also fell to record lows for instantaneous and daily-average share on 18 January, and monthly average output across January.

The tables below look over the past fourteen years (2009 to 2023) and report the record output and share of electricity generation, plus sustained averages over a day, a month and a calendar year. Cells highlighted in blue are records that were broken in the first quarter of 2024, or annual records broken in 2023. Each number links to the date it occurred on the Electric Insights website, so these records can be explored visually.

[4] Note that Britain has no inter-seasonal electricity storage, so we only report on half-hourly and daily records. Elexon and National Grid only report the output of large pumped hydro storage plants. The operation of battery, flywheel and other storage sites is not publicly available.