Ørsted moves ahead with H2RES
Ørsted has made a final investment decision on the H2RES renewable hydrogen demonstration project at Avedøre Holme in Copenhagen.
It marks the energy group's first renewable hydrogen project and new era in the company’s green journey, with offshore wind harnessed to decarbonise society beyond direct electrification, offering a path to zero emissions.
The HSRES facility will have a capacity of 2MW and produce up to around 1,000kgs of renewable hydrogen daily, which will be used to fuel road transport in Greater Copenhagen and on Zealand. The project is expected to produce its first hydrogen in late 2021.
"We see renewable hydrogen and other sustainable fuels as cornerstones in reaching net-zero emissions by 2050, and H2RES will contribute with key learnings to turn Europe's ambitious build-out targets for renewable hydrogen into a new industrial success story," said Martin Neubert, Executive Vice President and CEO of Ørsted Offshore.
"With the right framework in place that incentivises the shift away from fossil fuels, renewable hydrogen can decarbonise transport and heavy industry, which is paramount to creating a world that runs entirely on green energy."
Over the past 18 months, Ørsted has partnered with different consortia in seven renewable hydrogen projects in Denmark, Germany, the Netherlands, and the United Kingdom.
The practically unlimited global offshore wind resources are ideally suited to power renewable hydrogen electrolysis. The H2RES project will investigate how to best combine an electrolyser with the fluctuating power supply from offshore wind, using Ørsted's two 3.6 MW offshore wind turbines at Avedøre Holme.
"Renewable hydrogen will be a cornerstone in achieving Denmark's ambitious decarbonisation target. H2RES is an example of how public co-funding coupled with a committed hydrogen industry and ambitious offtakers can drive the decarbonisation of the transport sector," addsd Anders Nordstrøm, Vice President and Head of Ørsted's hydrogen activities.
"H2RES is a small but important step towards large-scale renewable hydrogen production, and it will allow us to demonstrate how offshore wind combined with onshore electrolysis can offer decarbonisation beyond direct electrification."
The Energy Technology Development and Demonstration Programme (EUDP), under the Danish Energy Agency, has previously awarded £4.13 million for the development of the H2RES project to Ørsted, Everfuel Europe A/S, NEL Hydrogen A/S, Green Hydrogen Systems A/S, DSV Panalpina A/S, Hydrogen Denmark, and Energinet Elsystemansvar A/S.
Ørsted’s Hornsea Three wind project off the coast of Britain was granted development consent at the end of December.
Industry movement with heat decarbonisation
It is estimated that the heat network market requires approximately £30 billion of investment by 2050 to meet the UK Government’s net zero targets, and the decarbonisation of heat has been highlighted as a particular challenge.
The Climate Change Committee’s Sixth Carbon Budget states the UK should target 20% of UK heat demand through low-carbon heat networks by 2050 - but as with most discussions surrounding mass decarbonisation, even reaching that target won't be an easy task. In the UK approximately 40% of energy consumption and 20% of GHG emissions are due to the heating and hot water supply for buildings.
The International Energy Agency (IEA) estimate that globally, around half of all energy consumption is used for providing heat, mainly for homes and industry.
Source: Heat Trust
This week saw some positive movement, however, with gas distribution company SGN and UK renewable energy solutions provider Vital Energi announcing a 50:50 joint venture, which will create an Energy Services Company (ESCO) representing utility infrastructure and heat network providers.
This includes delivery of heat to developments planned by SGN’s property arm, SGN Place, and the local vicinities where there is a demand for low-carbon heat.
The objective is to supply new and existing residential, industrial and commercial facilities and development activity is already underway for two projects in Scotland and the South East, with another 20 in the pipeline. SGN is looking to develop alternative heat solutions alongside its core gas distribution business and expand into the growing district heating market, recognising the future of heat is likely to include a mix of technological solutions and energy sources.
Vital Energi is seeking to expand into asset ownership opportunities to complement its core design, build and operations businesses. The complementary skillsets of both organisations will offer a compelling proposition for developers, commercial and industrial users and public sector bodies seeking low-carbon heat solutions.
SGN’s Director of Commercial Services and Investments Marcus Hunt said: “Heat networks are likely to play an increasing role in the delivery of UK heat in the context of net zero. The creation of this joint venture with market-leading Vital Energi enables us to build a presence in this emerging market, delivering new heat infrastructure and supporting decarbonisation.”
Nick Gosling, Chief Strategy Officer at Vital Energi, said: “Combining the resources, expertise and know-how of both organisations will allow us to play a major role in delivering the UK’s transition to low and zero-carbon heat.”
In March, the European Marine Energy Centre (EMEC) starting collaborating with Highlands and Islands Airports Limited (HIAL) to decarbonise heat and power at Kirkwall Airport through green hydrogen technology. 2G Energy was selected to deliver a CHP plant which generates heat and electricity from 100% hydrogen.
Heat decarbonisation options
The Energy & Climate Intelligence Unit (ECIU) highlights the following options for decarbonising heating.
Use renewable electricity to generate heat in the home. As power sector emissions fall, emissions associated with electric heating are decreasing rapidly.
Low carbon gases
Replace natural gas that most homes use for heating with hydrogen, which releases energy but not carbon dioxide, the only waste product is water. Biomethane is also an option as it produces less carbon than natural gas over a full lifecycle.
For hydrogen to work, the pipes in the national gas grid would need to be replaced and home boilers would need to be adapted or changed. This is possible but could incur considerable cost.
Biomethane is chemically identical to methane from natural gas, so is suited to existing infrastructure and appliances. It is unlikely, however, that it can be produced in sufficient quantities to replace fossil gas entirely.
A hybrid system combining both electrification and hydrogen is a third option. Here, heat pumps could be used to meet the majority of heat demand, with a (low carbon) gas boiler taking over in extremely cold weather. Advantages of this approach include helping establish a market for heat pumps while hydrogen is developed to displace natural gas in the hybrid system eventually, and the ability to call on hydrogen when heat demand is at its very highest.
Heat networks connect a central heat source to a number of buildings via a series of underground hot water pipes, and are popular in countries such as Denmark, where heat networks supply 63% of households. The Government expects the heat networks market in the UK to grow quickly to supply up to 20% of heat demand over the next decade or so, investing £320 million into its flagship Heat Networks Investment Project to help get this underway.
Heat networks work particularly well in built-up urban areas or industrial clusters where there is a large and concentrated demand for heat. Over time, it is thought that if the central heat source can be low carbon, then there is the opportunity to ensure that multiple homes and buildings are decarbonised at once.
Biomass can be used to reduce emissions when used instead of more polluting fuels like oil in off gas grid properties. Support for biomass boilers has been available since 2011 via the Renewable Heat Incentive (RHI), but take-up has been low.
Supply constraints also restrict the role that biomass – burning solid material such as wood – can play. In any case, according to the Committee on Climate Change, this resource may be better used in other sectors of the economy such as construction, where it provides carbon storage without the need for CCS and reduces demand for carbon-intensive materials such as steel and cement.
The Energy Transitions Commission (ETC)'s latest report sets out how rapidly increasing demand for bioresources could outstrip sustainable supply, undermining climate mitigation efforts and harming biodiversity, unless alternative zero-carbon options are rapidly scaled-up and use of bioresources carefully prioritised.
"Alternative zero-carbon solutions, such as clean electrification or hydrogen, must be developed rapidly to lessen the need for bio-based solutions," it states.
The overall decarbonisation of industry is another major challenge, especially among four sectors that contribute 45 percent of CO2 emissions: cement, steel, ammonia, and ethylene, according to a McKinsey report.
The process demands reimagining production processes from scratch and redesigning existing sites with costly rebuilds or retrofits. Furthermore, companies that adopt low-carbon production processes will see a short- to mid-term increase in cost, ultimately placing them at an economic disadvantage in a competitive global commodities market.
Ken Hunnisett is Project Director for the Heat Network Investment Project (HNIP)’s delivery partner Triple Point, which is the delivery partner for the government's Heat Network Investment Project, which is responsible for investing up to £320million in strategic, low-carbon heat network projects across England and Wales.
He is calling for the urgent need to invest in the development of new heating infrastructure to support the nation’s decarbonisation effort. So far £165m of HNIP funds have prompted £421m CAPEX, providing more green jobs as the UK economy eases from the lows sustained from the pandemic.
Decarbonising the UK's heating infrastructure is critical if we are to reach our net-zero goals and it’s crucial that progress is made in this decisive decade, he added.
"Heat networks are a part of the lowest-cost pathway to decarbonising our homes and workplaces in the future but are also the bit of the jigsaw that we can be putting into place now," he said. "Penetration into the UK market is still low, despite heat representing 37% of UK greenhouse gas emissions, the largest single contributor by some way. Funding needs to be urgently directed towards reducing the environmental impact of the residential sector, particularly given the slow pace of the decline in residential emissions in comparison to those of business and transport."
Currently, just 3% of UK buildings are serviced by heat networks. "Further investment in this industry, using public and private funds, will not only drive wider sustainability targets but will boost the economy by providing more green jobs as the country emerges from the pandemic," he said.