August News

GB Electricity Commissioner’s Review
The British government published a review by Mark Winsper, the GB Electricity Commissioner, on times for transmission grid connections. These are ridiculously long (12-14 years) and getting longer, fast: together with poor regulations and bad market design, these are the major constraint adding cost and time to the energy transition. Yet the majority of these grid reinforcements and other costs would be unnecessary, given an appropriate regulatory and contracting system. The rest of the problem is largely because of the always-faulty view that the electricity system had once been “gold-plated”, so now National Grid is forbidden from building it ahead of need. His recommendations on the need for strategies, guidelines and spatial plans are sound.

UK and EU Enact Green Hydrogen Definition
The EU’s definition of what is green used to allow a producer to label hydrogen green if the producer procures enough green energy etc., regardless of when available. This means, for example, that they can over-procure green energy when the wind is blowing and the sun is shining, to balance out under-production when they are not. The Delegated Regulation of 10th Feb 2023 requires that, within 3 years, it must be produced solely with green electricity; balancing excess green with some dirty is not allowed. We flagged this in our December newsletter.

The UK has its own version of that regulation, the Low Carbon Hydrogen Standard, which means that the energy must be made (including any carbon capture and transportation to a CO2 network) with very low emissions indeed, “using actual data to demonstrate that the hydrogen production facility is operating at the same time as the electricity input source” and “evidencing hydrogen producers have exclusive ownership of the electricity used to cover the amount of hydrogen produced.”

Other than powering electrolysis with nuclear or biomass (which is, itself, only questionably green), the only cost-effective way to do this is to remove the intermittency of renewables with storage of sufficient scale and duration. This is a core part of a number of Storelectric initiatives both in the UK and elsewhere.

German Electricity Costs Rocket
An article by Thunder Said Energy explains “Why does Germany have the joint highest electricity price in Europe, doubling in the past 20-years, despite ramping low-cost wind and solar to 32% of its grid by 2022?” Although they don’t explain about inertia, power quality and ancillary services, most of the problems would be solved by connecting intermittent generation to the grid through Storelectric’s CAES.

Low Carbon Hydrogen Agreement Consultation
The UK government is consulting on establishing Low Carbon Hydrogen Agreements, comparable with CfDs for electricity. This will offer premium prices for low carbon hydrogen, combined with minimum off-take quantities, which are two pre-requisites for building up the industry. Like CfDs, their cost is likely to drop fairly quickly in the following years, as the industry matures; and hopefully will be superseded eventually by markets and private contracts.

Hydrogen Transportation and Storage Consultation
The government’s consultation on hydrogen transportation and storage has closed, with excellent minded-to positions including:

  1. A Regulated Asset Base model for hydrogen transport infrastructure;
  2. A 15-year revenue floor for hydrogen storage infrastructure (the duration should be longer, potentially indefinite as the assets may have a very long life);
  3. Strategic planning and a regulatory framework for the industry;

They will also consult on blending hydrogen with natural gas, which is OK up to 10-15% but then useless until 100% as most industries need pure hydrogen. Our views are here.

Mark’s Blog
This month Mark’s blog is a brief outline of an affordable, reliable and resilient energy transition. It was originally drafted as his input to the House of Lords Science and Technology Committee inquiry into long-duration energy storage as part of a net zero grid.

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