#TheGrid – More than just electrons

‘The grid’ is synonymous with electricity, and it is often considered in isolation to fuels. But sector coupling technologies such as hydrogen and carbon capture are blurring the boundaries, necessitating a change in how we think about what ‘the grid’ really is – and how to decarbonise it.

Conventional wisdom holds that decarbonising electricity involves lots of wind, solar, pylons, substations and some storage. This is not wrong. But we need to think bigger: the grid is about more than just power. It is about the entire energy system, and how it interacts with discrete segments of the wider economy.

E-FWD members discussed the role of hydrogen and carbon capture at The Grid, our latest in-person event in Aberdeen in June. The wide-ranging discussion contemplated macro and micro challenges to sector coupling, and identified several no-regrets solutions.

• Systems thinking: Hydrogen and CCUS overlap electricity and fuels, so require a holistic approach. No more policy silos.
• Vision & strategy: A clear vision of the future energy mix and utilisation of each energy vector is crucial to crafting policy that builds investor confidence.
• Resource mapping: The geographic availability of H2 and CCUS must be coordinated with end-use requirements to avoid prohibitively costly transmission and transportation
• Skills: Hydrogen and CCUS hold great promise for transitioning the North Sea oil and gas workforce, so play a key role in enabling a just transition

Systems thinking

‘The grid’ should include all energy infrastructure, not just onshore power networks. From offshore and onshore energy production and injection, pipelines, transportation, connectivity to the network and distribution all the way to the end user – the grid encompasses every aspect of the energy system.

Considering the breadth of this approach, there is no room for politics in decision-making. Energy and net zero should transcend politics and an excessive focus on party positions or energy factions hinders creativity. Nascent industries cannot progress when they become political footballs, or when confronted with too many hoops to jump through.

Carbon capture, utilisation and storage (CCUS) is crucial for realising net-zero ambitions and also supporting the continuation of UK industry. But too often it is viewed through the prism of culture wars: enabling a continuation of fossil fuel expansion. An all-encompassing systems approach is needed to articulate where CCUS achieves cornerstone objectives without undermining other areas of energy policy delivery such as renewables, transmission upgrades and energy efficiency.

Utilisation in particular is too often overlooked in the conversation around carbon capture. Treating CO₂ purely as a waste product denies the opportunity for creative business models that are revenue-generating for critical industries facing a heavy decarbonisation liability. CO₂ is used in many end products such as plastics and surfactants and carbon removal must be included in the holistic plan.

Similarly, geothermal offers opportunities to attend to both power and heat demand in ways that could relieve the burden of electrification on the grid. Advanced geothermal technologies, as well as conventional and modular nuclear, are complementary to the expansion of wind, solar and energy storage on the grid and a holistic approach must provide room for these solutions.

Vision & strategy

A holistic approach to the energy grid would open the door to a comprehensive vision for the future energy mix. All energy vectors must be considered on their merits, allowing the articulation of a vision that plays to the strengths of each in a UK-specific context.

Key to achieving this is a demand-oriented approach that considers the energy requirements of the future economy. The cluster sequencing approach to CCUS development is an improvement on what came before. While it still requires further reform (see below), it offers a more cost-beneficial template for the rollout of hydrogen than the current atomised market-driven hydrogen production business model.

A targeted strategy underpinned by systems thinking would end the uncertainty surrounding the future role of hydrogen. For example, if hydrogen is not going to be used in heating, then why delay what appears to be an inevitable announcement to that effect until 2026?

There is a mountain of evidence supporting the view that hydrogen is best deployed for heavy industry with excessive heat requirements, and in heavy-duty transportation. Wind on its own is not a panacea and a cluster-based policy framework for marrying up hydrogen supply and demand would go a long way towards resolving the impasse.

A clear vision and strategy will enable market demand, offer a clearer picture of how and where demand will evolve, and support a clear pipeline of opportunities. This, in turn, will generate the certainty required for investors, developers and the supply chain.

With these elements in place, government can then move forward with the implementation of a UK Carbon Border Adjustment Mechanism (CBAM) or similar export framework. The GB market needs a bilateral trade agreement to support transportation of CO₂ and H2 between the UK, Europe and other international trading partners.

Resource mapping

A key challenge to overcome is the geographical dislocation between supply and demand. This applies principally to hydrogen, but is relevant also to the development of CCUS initiatives.

A comprehensive resource mapping exercise should identify zones where grid constraints make hydrogen production a more viable route to market, and where these overlap with future industrial demand for H2.

Scotland faces significant wind energy curtailment due to grid constraints, low demand, and lack of storage solutions. Despite having abundant wind resources ideal for green hydrogen production, the absence of onshore salt deposits for energy storage necessitates relying on transmission to the rest of the UK or neighbouring countries. This reliance is crucial to ensure that valuable renewable energy isn’t wasted and can be economically utilised elsewhere.

Excess wind could be used to create hydrogen for small scale advanced bio-fuel production. For example, one offtaker in the E-FWD tent explained how they are struggling to source hydrogen for their project even though wind is being curtailed in the vicinity.

This mismatch highlights the need for hydrogen policy to consider demand at both the macro and micro scale. Large capital investments are needed to mobilise capacity to meet ambitious targets, but at the same time there is an evident need to plan for smaller modular hydrogen production that can also make a significant contribution to the alleviation of grid constraints.

The resource mapping exercise should include an assessment of supply chain capability to address gaps, encourage more local manufacturing and inward investment from overseas. Existing green hydrogen targets require a vast number of electrolysers, but currently there is no local manufacturing available to attend to this need. Also, the lead time on compressors is a problem for both CCUS and electrolysers for hydrogen.

A geo-strategic supply chain plan would allow small and medium businesses in particular to plan targeted capacity investments that attend to these deficiencies with reduced risk of under-utilisation.

Progress in CCUS is hindered by the cluster and hub model and Government track approvals. Since the 1930s, natural gas facilities have used amine technology to remove CO₂, but without storage, the CO₂ is vented into the atmosphere. Currently, carbon capture companies in the UK are capturing CO₂ from various industries, yet lack storage options until the approved clusters become operational in 2030.

A key challenge for CCUS is connecting remote emitters to storage sites. Building new pipelines is costly, so road transport to a pipeline or storage site may be a short-term solution if no nearby storage is available. Transportation in CCS adds to the cost, prompting efforts to streamline this process, such as the source-to-sink model in the US and the cluster and hub model in Europe.

Skills and a just transition

Hydrogen and carbon capture offer distinct job creation opportunities than conventional grid decarbonisation technologies such as wind and solar. As such, they hold promise as a means of delivering a more just energy transition that supports the reskilling and redeployment of the existing North Sea workforce.

Identifying transferrable skills, expertise and capabilities will be a core element of the holistic approach to decarbonising the grid. Collaboration across industry, government, regulators, investors, operators and the supply chain is paramount.

The ‘low hanging fruit’ in this regard has already been picked. Now, the magnitude of investment and coordinated efforts required to deliver an integrated and flexible energy system will need a much-improved co-ordinated response.

Collaboration – the overused C-word of the energy transition – will be key to fostering a sustainable workforce. An adherence to the competitive approach that defined energy contracting in the 20^th century will perpetuate the squeeze on small and medium enterprises. These companies will do much of the heavy lifting on job creation and retooling workforces so must be supported.

If the UK creates a commercial environment in which only the big players can survive, the personnel who design and build the hydrogen and carbon capture assets of the future will not be sourced from the existing GB workforce – increasing the risk of communities that host these developments being left behind in the process.

Creating pan-industry opportunities for SME participation would help. For example, there are technical challenges for certain safety and integrity-critical technologies for CCUS and H2. The supply chain cannot shoulder the full cost for development and qualification testing. In order to keep this equitable and ensure SMEs can access future opportunities, these are best managed through Joint Industry Partnerships and coordinated by not-for-profit enabling bodies such as the Net Zero Technology Centre.