Constrained renewables and green hydrogen production study: final report

The study explored the nature of constrained renewables in Scotland, including constraints and curtailment levels around the country. It then investigated the possibility of diverting some of this constrained renewable power to produce green hydrogen via a electrolyser system, thus providing a zero-emission fuel or feedstock. The study examined the economics of six different scenarios for producing hydrogen from Scottish onshore wind power with the intent of identifying the optimum scenarios for producing hydrogen on a financially viable basis. This report presents the findings of the early indicative assessments.

The approach to the study was two-fold, examining the electricity network and wind farm connection aspects, as well as the hydrogen production aspects. The methodology consisted of a review of the constraint issues currently facing Scottish electrical networks and the technical, regulatory and other barriers; a review of the grid connection process for transmission and distribution networks; and a cost modelling exercise to assess potential scenarios where this application of combining curtailed wind with the production of hydrogen could prove cost-effective.

The study found that large areas of the electrical transmission and distribution networks across Scotland are facing constraints, primarily as a result of the unprecedented increase in distributed generation over the past decade. While there is no specific pattern to the areas of constraint, rural areas with plenty of land for development and abundant wind resources have been more susceptible, including: Ayrshire; Lothian & Borders; Dumfries & Galloway; and the Highlands & Islands. The study identified a clear appetite for innovative solutions to manage constraints, and noted that the deployment of green hydrogen production for this purpose could prove valuable under the right regulatory conditions. However, the cost modelling found that green hydrogen production is only financially viable if the hydrogen system is operating close to continuously, which would require a wind farm to be subject to curtailment levels of circa 15% - 25% in order to supply enough ‘curtailed power’ to the electrolyser. Consequently, the three scenarios that examined the production of hydrogen using only curtailed onshore wind power were found not to be financially viable under today’s CAPEX and OPEX costs for hydrogen systems. A further three scenarios that examined the production of hydrogen using non-curtailed onshore wind power (i.e. power that could otherwise be supplied to the grid) showed real promise for being financially viable.

A number of recommendations were made, including: undertake detailed analysis of all wind farms in Scotland to determine specific wind farms, or clusters of wind farms, that meet the minimum viable curtailment levels identified; investigate whether existing onshore wind projects that are eligible for Renewable Obligation Certificates (ROCs) would still be eligible if electricity was redirected to a hydrogen electrolyser; initiate a pilot scheme with a large wind farm, to demonstrate that continuous production of hydrogen is possible and that this can be achieved economically; examine whether the production of green hydrogen would be feasible for the marine energy sector to determine potential benefits; conduct a feasibility study, potentially leading to a pilot scheme, which looks in more detail at the specific aspects of building a business case for the transport sector on an island network; assess the potential of the sale of by-products (of the hydrogen production process) such as oxygen and heat; and produce a set of guidelines and/or specifications for each method of transportation for hydrogen for developers to reference.