The energy company SSE has begun work to develop an underground cavern in east Yorkshire to store hydrogen, aiming to stockpile the renewable source of power for when the freezing, windless conditions experienced in the last week occur in future.
The project will produce hydrogen using renewable energy in a 35-megawatt electrolyser which will be stored in a cavern the size of St Paul’s Cathedral located a mile deep at an existing SSE site in Aldbrough on the Yorkshire coast.
The hydrogen will be used to fire a turbine which can export power to the grid when demand is high.
SSE hopes the “pathfinder” project, which could cost more than £100m, will demonstrate the technology before bigger projects in the area which would require larger pipelines and infrastructure. The company hopes to receive government money for the project through a fund set up to support low-carbon hydrogen projects.
Last week icy conditions led to a surge in energy demand as Britons cranked up their heating. Simultaneously, a lack of wind cut the power available from windfarms, forcing National Grid to pay high prices to encourage operators of gas “peaking plants” into action.
Hydrogen is an expensive form of power generation as it requires large amounts of electricity to produce. However, it is seen as important in efforts to decarbonise heavy industries reliant on fossil fuels.
Catherine Raw, managing director of SSE’s thermal division, told the Guardian: “Even if hydrogen is expensive relative to other fuels, you’re able to deliver the power exactly when you need it during peak demand and when power prices are justified. So this would be, even as a research and development project, helping to ease that system pressure during periods of peak demand like we’ve just seen.”
It emerged last week that Ofgem is pushing for a cap on how much power stations can charge National Grid for backup electricity. Ofgem wants to tighten rules to prevent “excessive” profits and intends to publish proposals early next year.
The Grid spent more than £27m paying power stations to increase supplies at short notice as temperatures dropped on Monday last week. Vitol Group’s Rye House gas-fired power station, just north of London, earned as much as £6,000 per megawatt-hour, reigniting a debate over power generators’ profits.
Gas-fired power stations were exempted from the electricity generators levy announced by the chancellor, Jeremy Hunt, last month, as the government cited their role in providing security of energy supplies.
SSE has several gas-fired plants in the UK and Ireland. Raw declined to comment on last week’s events but said: “The rising gas price has meant that we’ve had to take risks that we would not normally take, and therefore how do you get rewarded for taking those risks? Our responsibility as a generator of power is to keep the system balanced and SSE takes that very seriously.”
SSE, which runs gas-fired power stations alongside hydroelectric plants and windfarms, last month reported a more than tripling of profits thanks to soaring energy prices.
SSE hopes to get the project running by 2025, before a larger hydrogen storage project planned for the same site in 2028 in partnership with the Norwegian energy company Equinor. The pair are also developing the Keadby hydrogen power station, planned to be the world’s first big 100% hydrogen-fired power station. SSE has signed a contract with Siemens Energy for design and engineering work on the pathfinder project.
Centrica, the parent company of British Gas, has invested in an industry joint venture which will trial using hydrogen at an existing peaking plant at the Brigg station in Lincolnshire.
The pilot, which will launch in the second half of next year, is aimed at examining the role that hydrogen can play in producing power.