Equinor, SSE plan 1.8GW of low-carbon power capacity

Author: Jake Stones

2021/04/08

LONDON (ICIS)--Equinor and SSE announced plans to develop two low-carbon power plants, one equipped with carbon capture and storage (CCS) and the other powered entirely by hydrogen, adding a total capacity of 1.8GW by 2030, the two energy companies said in a statement on Thursday.

Both plants, Keadby Hydrogen and Keadby 3, would be the first of their kind in the UK.

Moreover, the Keadby Hydrogen plant provides a clear indication of how hydrogen might be used in the UK as the country aims to reach net-zero emissions by 2050.

KEADBY HYDROGEN

The Keadby Hydrogen power plant is expected to have a 900MW capacity, with potential completion within this decade.

The plant will run entirely from hydrogen, with an expected hydrogen peak demand of 1800MW.

The project will be connected to the hydrogen pipeline infrastructure under development by the Zero Carbon Humber (ZCH) partnership. The first hydrogen production unit to connect to the ZCH infrastructure will be Equinor’s H2H Saltend project, which has an expected capacity of 600MW and will come online during the mid-2020s.

“H2H Saltend is one potential source for the hydrogen required for the Keadby Hydrogen project, but with peak demand of 1,800MW, clearly other production facilities will be needed, and we are exploring this alongside Equinor,” a spokesperson from SSE told ICIS.

One potential source of supply could be hydrogen from other industrial clusters. UK grid operator National Grid recently announced plans to convert up to 25% of the British gas network to carry hydrogen. The plan, named “Project Union” focuses on linking industrial clusters across country, such as HyNet North West, a future blue hydrogen production project spanning Liverpool, Manchester and parts of Cheshire.

Joe Howe, chair of the North West Hydrogen Alliance and executive director of the Thornton Energy Institute at the University of Cheshire, stressed the importance of linking industrial clusters producing hydrogen.

“The Keadby Hydrogen power plant will use up to one third of the UK’s 5GW hydrogen production goal, and we will need to ramp up production capacity to meet this demand. Therefore, it is vital that we develop HyNet North West. It could deliver up to 3.8GW of hydrogen, more than three quarters of the UK target,” Howe told ICIS.

Hydrogen for power generation could also be used in the Keadby 2 project, a combined cycle gas turbine (CCGT) plant currently under construction.

The partnership between Equinor and SSE will also review blending hydrogen into the feedstock for Keadby 2 - although blend quantities are being reviewed.

KEADBY 3

The Keadby 3 900MW plant will be one of the first major CCGT plants with CCS in Europe.

According to ICIS power analyst Matthew Jones, CCGTs with CCS are expected to play an important role across Europe in the long-term, but will take a while to be implemented.

One of the main reasons for slow uptake of the technology is down to high operating costs, which for many years did not seem to stack up. However, the implementation of carbon capture via CCS will be key for most markets to achieve net zero.

In terms of the technology’s uptake in the UK, most projects will likely require some element of government funding to take off, as mentioned in last year’s budget . In addition to support, the technology also requires a higher carbon price to compete against unabated gas.

ICIS analytics expects the first CCGT with CCS plant in the UK to come online by 2030 in a scenario where decarbonisation is targeted aggressively (High RES scenario). In a more conservative Base Case scenario, such a plant wouldn’t come online until 2040.

FLEXIBLE POWER GENERATION

One of the main benefits of hydrogen in relation to renewable production is that it can be generated using excess renewable energy at periods of high output. Hydrogen can capture the excess power and store it, ready for use during periods of lower renewable production.

Recent ICIS analysis of net capacity changes on a de-rated basis suggests that the UK will face a 2GW deficit in capacity as early as 2023. Besides interconnectors, hydrogen-for-power plants offer a reliable dispatchable form of generation.

Besides being able to be called on as quickly as gas and coal plants, the ability to store energy will help alleviate grid constraints such as frequency drops due to excess renewable generation.

Current European hydrogen strategies show little alignment on whether hydrogen should be used for power generation.

For example, the French strategy focuses solely on hydrogen for decarbonising industry and transport, while the Dutch strategy outlines using clean hydrogen as a means of flexible power.