Energy company SSE has started work to develop an underground cavern in Yorkshire to store hydrogen, with the aim of storing the renewable energy source for when the freezing and windless conditions experienced over the past week occur.
The project will produce hydrogen using renewable energy in a 35 megawatt electrolytic which will be stored in a cavern the size of St Paul’s Cathedral located one mile deep at an existing site SSE at Aldbrough on the Yorkshire coast.
The hydrogen will be used to power a turbine that 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 ahead of larger projects in Humberside that would require larger pipes 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 spike in energy demand as Britons turned up their heating. At the same time, the wind shortage cut off the energy available from wind farms, forcing National Grid to pay high prices to encourage operators of gas “peak plants” to act.
Hydrogen is an expensive form of energy generation as it requires large amounts of electricity to produce it. However, it is considered important in efforts to decarbonize heavy industries that rely on fossil fuels.
Catherine Raw, managing director of SSE’s thermal division, told the Guardian: “While hydrogen is expensive relative to other fuels, you can deliver the energy exactly when you need it during peak demand and when fuel prices ‘energy are justified. So this would, even as a research and development project, help relieve pressure on the system during periods of peak demand like we just saw.’
It emerged last week that Ofgem is pushing for a cap on how much power stations can charge National Grid for back-up electricity. Ofgem wants to tighten the rules to prevent “excessive” profits and intends to publish proposals early next year.
The Grid spent more than £27m paying power stations to increase supply at short notice as temperatures plunged on Monday last week. Vitol Group’s Rye House gas-fired power station in north London earned up to £6,000 per megawatt-hour, re-igniting a debate about the profits of power generators.
Gas-fired power stations were exempted from the electricity generators levy announced by Chancellor Jeremy Hunt last month, as the government cited their role in security of energy supply.
SSE has several gas plants in the UK and Ireland. Raw declined to comment on last week’s events, but said: “The increase in the price of gas has meant that we’ve had to take risks that we wouldn’t normally take, and so how do you get rewarded for taking those risks? Our responsibility as a power generator is to keep the system balanced and SSE takes this very seriously.”
Sign up for Business Today
Get ready for the workday – we’ll tell you all the business news and analysis you need every morning
Privacy Notice: Newsletters may contain information about charities, online advertisements and content funded by third parties. For more information see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply.
SSE, which runs gas-fired power stations along with hydro and wind farms, last month reported more than tripling profits thanks to higher energy prices.
SSE hopes to have the project up and running in 2025, ahead of a larger hydrogen storage project planned for the same site in 2028 in partnership with Norwegian energy company Equinor. The pair are also developing the Keadby Hydrogen Power Station, which is expected to be the world’s first large 100% hydrogen 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 that will trial the use of hydrogen at an existing flagship plant at Brigg station in Lincolnshire.
The pilot, which will be launched in the second half of next year, aims to examine the role that hydrogen can play in energy production.