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This is a guest article by Anne Haase, Renewables Director at Aquaterra Energy.
Europe is currently driving plans forward to significantly decarbonise industry and accelerate its journey to a low carbon economy. Hydrogen is core to that decarbonisation strategy, with infrastructure projects being developed conceptually to support transmission and distribution across Europe, the UK and wider.
The market has traditionally been decentralised, with industrial operators building their own hydrogen plants to support their own assets. Now we are beginning to see the flourishing of a more fluid marketplace with buyers and sellers beginning to emerge – however, significant matchmaking still needs to be done to bring them together and there’s also the issue of transmission and storage.
Hydrogen presents a key opportunity for hard to abate sectors to decarbonise their operations and also create a foundation for wider deployment across the energy sector as an alternative to fossil fuels. Switching existing grey hydrogen production to blue or – even better green – would be an environmental win big enough to make it worth it.
The further that Aquaterra Energy and our clients travel down the path towards hydrogen, the more we see confidence building in the potential of an accelerated infrastructure which will bring buyers and sellers together and create an interconnected low carbon energy system. The announcement of the European Hydrogen Backbone initiative is exciting, with the various corridors expected to be constructed and ready to transmit hydrogen within the next decade. within the next decade.
Infrastructure, especially that which can connect countries and even continents, enables scale. How that scale is delivered is one of the key challenges facing the hydrogen sector. With an anticipated 475GW of hydrogen transmission capacity forecast across Europe by 2050, we need to find a way to make that happen.
Centralised production assets – onshore and offshore – are now starting to be developed into feasibility stage, and what were previously renders are being turned into reality. Offshore creates an opportunity to scale rapidly, and land use is less of an issue with civil works and their impacts on communities significantly reduced. The question will be – do we go down the energy island route or do we go down a platform route…or do we do both?
The environmental benefits need to be matched by an economic business case and the race will be to produce as much cheap, renewable hydrogen as possible over the next 10 to 15 years. Offshore offers an opportunity to standardise platform design, deliver shared services, support rapid build out and optimise the enabling balance of plant. All of this will help drive down the cost of LCOH.
The fundamental driver in reducing the levelised cost of hydrogen is finding a cheap source of electrons – electricity is the main feedstock of hydrogen and it’s expensive. Many projects focus on the CAPEX as a key determinant, but it’s actually pretty minor compared to the lifetime spend on electricity that any hydrogen plant would need to deliver hydrogen as an output.
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Hydrogen plants relying on PPAs and connection to grid can find this challenging. We have an opportunity offshore to couple wind farms and hydrogen production and “right-size” the combined assets to build a viable project.
Coupled wind and hydrogen plants can be designed so that hydrogen asset uptime is maximised and linked to the capacity factor of the connected wind farm. This supports capital efficiency – we really do think building in significant redundancy into hydrogen assets offshore is unnecessary. We believe the assets should be sweated. Hydrogen technology isn’t new, but the environments that we want to operate them in are.
We also have the challenge of DEVEX and its associated timeline. It needs to speed up. To make green hydrogen a major player on the path to achieving net-zero emissions, we’ve got to tackle a crucial challenge: speeding up regulatory processes.
Right now, innovation projects face a number of political and regulatory hurdles, taking seven to ten years from conception to operation. The onshore sector has rightly been the focus of permitting and development – this has given the foundation for investment in facilities by electrolyser OEMs – but we do need to have a framework for offshore development and offer a helping hand to Governments and regulatory bodies by building executable models for offshore operation so it can be brought to life for them.
We are already taking part in a number of collaborations in the UK and Europe which seek to create projects which couple offshore wind farms and dedicated hydrogen production. We will create the opportunity – with partners – to deliver the framework for executable offshore projects. This helps drive the vision that regulations can support.
Standardisation supports speed of deployment and overall cost reduction. There are elements which can be standardised and modularised, such as stack design, platform elements and services support and much of the balance of the plant. This will take work with electrolyser manufacturers and the supply chain to get right. However, once the designs are refined, we will see significant plant weight reduction and an elegant approach to automation and operations and maintenance. We will also have streamlined fabrication and construction.
If you are designing with the future in mind, for example, if we plan to change out electrolysers every 7-8 years, we will create structures which simplify upgrades and replacements.
At Aquaterra Energy, the focus has been on creating an approach that offers a versatile template for upcoming green hydrogen projects. This template is designed to have widespread applicability, enabling its implementation in diverse locations. Our strategy involves the development of streamlined green hydrogen modules that can be efficiently produced, transported, and put together by yards and facilities of varying scales.
Collaboration has to take centre stage. To make this happen we need to connect end-users to producers and help create a viable production asset. By connecting and collaborating with wind farm developers and owners, transmission and infrastructure companies and applying our offshore knowledge to support the business project, we can create a viable and sizable production asset.
Offshore green hydrogen’s success absolutely hinges on industry collaboration and tapping into each organisation’s skill base, know-how and appetite for a sustainable business model. This makes offshore green hydrogen production efficient, accessible, and ultimately commercially viable.
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