Written evidence submitted by ITM Power (HCC0049)

 

 

 

1.      Introduction to hydrogen and its uses in refining

Over the last two years, the hydrogen industry has gained an incredible level of momentum, becoming a lightening rod in the current discussions around energy security, affordability, and, crucially, sustainability. However, this belies the fact that hydrogen has been used as a fuel source and in industrial processes for centuries, with the concept of the fuel cell dating back to 1801. Despite being the most abundant element in the universe, utilising natural hydrogen is a difficult proposition. It occurs naturally on earth only in compound form with other elements in liquids, gasses, or solids – for example, it is found as a free gas in layers of the continental crust; deep in the oceanic crust; in volcanic gasses; in geysers; and in hydrothermal systems. Therefore, in order to be used at scale, hydrogen must be created

through industrial processes. Currently, the lion’s share of this industrial hydrogen is produced using fossil fuels as the feedstock. According to the International Energy Agency (IEA), hydrogen production accounts for 6% of global natural gas use and 2% of coal consumption, leading to 830 million tonnes of annual CO2 emissions1.

The world’s two largest users of industrial hydrogen are the refining and chemical sectors. Indeed, of the global $120 billion+ annual market in hydrogen2, 55% is devoted to refining petroleum products where it is produced via the process of steam methane reformation (SMR) using natural gas, a process resulting in high carbon emissions. Depending on how this CO2 is managed, the hydrogen may be termed either “blue” or “grey”. To constitute as blue, the CO2 needs to be captured at the production facility and stored separately, otherwise the hydrogen must be referred to as grey. Where refining is concerned, industrial hydrogen is used for the desulfurisation and hydrocracking in the production of kerosene, gasoline, and diesel. It also enables the recovery of the elemental sulphur removed from petroleum products.

 

 


1  https://www.iea.org/reports/the-future-of-hydrogen

2   https://www.grandviewresearch.com/industry-analysis/hydrogen-generation-market


The use of hydrogen in refining is indispensable, therefore the challenge is not in reducing or curtailing the use of that hydrogen, but rather implementing ways of replacing or displacing natural gas as the feedstock. Refineries will serve as a keystone in the energy transition as we move away from an economy enabled and supported by fossil fuels, to one powered by clean technology, renewable energy, and zero emissions fuel. The answer lies in green hydrogen which, via the process of electrolysis, uses renewable electricity to split water into oxygen and hydrogen. The possibilities afforded by using green hydrogen in refining are currently being demonstrated by the pan-European REFHYNE project.

2.      Introduction to REFHYNE

REFHYNE launched in 2018 with the aim of supplying green hydrogen for refineries by building an electrolysis plant at the Shell Energy and Chemicals Park Rhineland in Wesseling, which accounts for 10-15% of the fuels demand in Germany3. The region, too, represents a major proving ground for decarbonisation, with 30% of German demand for hydrogen originating in the state North Rhine-Westphalia4. Estimates predict that demand will double by 2030.

Comprised of a consortium of Shell Deutschland Oil, Shell Energy Europe, ITM Power, SINTEF, thinkstep (now Sphera), and Element Energy, the project was formally started in January 2018 with a total investment of €20 million – including €10 million of European funding from the Fuel Cells and Hydrogen Joint Undertaking5 (FCH JU – now the Clean Hydrogen Partnership) – following a bid jointly developed by Shell and ITM Power. The project also received support from the European Union’s Horizon 2020 research and innovation programme, Hydrogen Europe, and Hydrogen Europe Research.

The five-year project down is broken down as follows:

The project objectives are to assess the economic, technical, and environmental impact of the deployment of a large-scale electrolyser; to develop and test business models based on existing and future revenue streams in a changing energy setting; and to explore the policy implications of the technology and disseminating the project results across Europe. As a proof of concept, REFHYNE will validate the business model for using electrolytic hydrogen as an input to refineries, prove the system can access revenues available from primary and secondary grid balancing in today’s markets, and create an evidence base for the policy/regulatory changes needed to underpin this market.

 

 

 

 


3 https://northsearegion.eu/media/20544/state-of-affairs-green-hydrogen-projects-in-the-north-sea-bart- biebuyck.pdf

4 https://www.fch.europa.eu/news/inauguration-europe%E2%80%99s-largest-pem-electrolysis-plant-refhyne- project

5

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&cad=rja&uact=8&ved=2ahUKEwjy1NL 08cX4AhW-SUEAHW1WCZcQFnoECB0QAQ&url=https%3A%2F%2Fwww.gov.pl%2Fattachment%2F04d1d9e6- 1de1-4066-8945-bd8c79f14ba6&usg=AOvVaw1XVyXWpbgVmf0DB53DVm8M


If successful, viable, and scalable, integrating a green electrolysis plant into refineries can be rolled out across Europe and beyond, enabling the industry that consumes the largest amount of industrial hydrogen to significantly decarbonise its operations.

Each member of the REFHYNE consortium exists as a pillar to hold the project aloft, bringing its own competencies and experience. Shell was responsible for building & civils, connection to services, and local permitting; ITM Power was responsible for designing, manufacturing, and fully integrating the 10MW electrolyser, as well as the service and maintenance of the plant; the rest of the partners were responsible for grid & balancing; hydrogen offtake, and analysis and dissemination (the latter of which the consortium received an outreach award from the FCH JU Programme Office6).

As well as enabling the refining industry to decarbonise, the project is also making a strong business case for implementing green hydrogen into operations. To that end, the project outlined its revenue streams as supplying steam reformed hydrogen to the local gas network; providing load balancing for the refinery site; and providing grid balancing.

Hydrogen production at the REFHYNE electrolysis plant began on 2nd July 20217 following two years of construction. At full load, the electrolysis plant will be capable of generating four tonnes of hydrogen per day up to 1,300 tonnes per year8.

3.      The electrolyser technology

At the heart of the REFHYNE project is the 10 MW electrolyser designed, built, and integrated by ITM Power. The Stack Skid (an assembly of electrolysis cells) is comprised of five 2 MW sub-modules packaged into one unit, each of which can be operated independently providing operational flexibility and resilience. This system scaled up stack technology that was originally developed at a 1 MW scale, indicating the scale and speed at which electrolyser technology has developed in the twenty years since ITM Power was founded.

Utilising proton exchange membrane (PEM) technology, the stacks enable an ultra-fast response, with efficiencies of 45-55 kWhr/kg9. The electrolyser system incorporates all the necessary balance of plant from rectifiers to hydrogen purification, thereby reducing parasitic losses and improving overall efficiency. Located in a new, purpose built, single storey building in the refinery, it only needs a feed in of water and another of renewable electricity to produce green hydrogen. The module is designed so that numerous units can be deployed in parallel to increase to a 100MW scale plant (see ‘5. REFHYNE II’ section).

The decarbonised hydrogen produced by the electrolyser can be fully integrated into refinery processes including the desulphurisation of conventional fuels. The hydrogen will be used for processing and upgrading products at the Wesseling site and testing the PEM technology at the largest scale achieved to date. It will also explore applications in other sectors including: industry, power generation, heating for buildings, and transport.

 


6   https://www.sintef.no/en/industry/news/refhyne-awarded-for-best-outreach-during-eu-hydrogen-week/

7 https://www.reuters.com/business/energy/shell-opens-10-mw-german-hydrogen-electrolyser-boost-green- fuel-output-2021-07-02/

8  https://phys.org/news/2018-11-green-hydrogen-world.html

9  https://refhyne.eu/wp-content/uploads/2020/06/REFHYNE-project-overview-Sep18.pdf


4.      Pan-European collaboration

ITM Power designed the electrolyser modules (and the stacks inside) and all elements of the balance of plant required to make the electrolyser modules work that could not be purchased from OEMs (Original Equipment Manufacturers). All other equipment was specified by ITM Power and built / supplied by OEMs. In most cases, ITM Power used the supply chain known at the time and where necessary new / previously un-used OEMs were used only where necessary. The specifics of manufacturing are outlined below.

The electrolyser modules were designed and built by ITM Power in Sheffield and consist of:

Designed / specified by ITM Power, built by OEMs:

/ specified by ITM Power and manufactured and installed in Germany by a sub- contractor on-site approved by Shell to work in the refinery

 

5.      REFHYNE II


In October 2021, the REFYHNE II consortium secured €32.4 million from the European Climate, Infrastructure and Environment Executive Agency10 (CINEA) to develop a 100 MW electrolyser at the Rhineland site. The project is coordinated by SINTEF and, as well as Shell and ITM Power, phase two includes project partners: Linde Engineering, ITM Linde Electrolysis, Fundacion Tecnalia Research & Innovation, Element Energy, and Concawe.

The electrolyser for this second, ten times larger project will be based on a state-of-the-art 5MW PEM stack integrated into pre-engineered 20MW electrolyser trains. Unlike the first project, in which ITM Power integrated the electrolyser itself, the plant for this second project will be built and integrated by the company’s partner, Linde Engineering.

The project builds on the lessons learnt from REFHYNE, maintaining these projects at the forefront of the low carbon energy transition. The project has shown that achieving an order of magnitude increase in the size at which a technology is deployed leads to new insight and learnings in both the design of the electrolyser system as well as in the associated learning around consenting and approvals on large industrial sites. The experienced team will scale up from the first project in a carefully managed and well controlled process. In so doing, the partners will prove that electrolyser technology is ready and available for 100 MW – and even GW – scale installations required for renewable hydrogen to be a major component of the energy transition.

The expanded electrolyser capacity is notably linked to Shell’s efforts to manufacture sustainable aviation fuels (SAF) at the Rhineland refinery. Shell says it wants to set up a “first” commercial bio-power-to-liquid (PTL) plant in a project that will entail the production of synthetic kerosene made from green hydrogen (using renewable and biomass power) and recycled carbon. A plant for liquefied renewable natural gas (bio-LNG) is also in development. Shell says construction of the PTL system could start in 2023, and it expects to start up at the end of 2025. The PTL plant could initially produce around 100,000 tonnes per year11.

However, the 100 MW REFHYNE II and SAF projects are still at “an advanced planning stage, with final investment decisions still pending”, according to Shell. So far, the consortium has been invited to prepare the associated grant agreement with the European Climate, Infrastructure, and Environment Executive Agency.

Once completed, the project aims to produce approximately up to 15,000 tonnes of green hydrogen per year12.

6.      Possibilities for Scotland

As previously explored, REFHYNE is serving as a template for the wider roll-out of electrolysis plants within the refinery sector (made up of more than 700 refineries globally13). With that in mind, a similar project could feasibly be implemented and scaled at the Grangemouth Refinery. Owned and operated by Ineos PetroChina, Grangemouth is


10 https://renewablesnow.com/news/consortium-secures-eu-grant-for-100-mw-refhyne-ii-hydrogen- electrolyser-756754/

11  https://www.reuters.com/article/uk-shell-germany-rheinland-idUKKBN2AQ13B

12 https://www.sintef.no/en/latest-news/2021/refhyne-ii-will-build-the-worlds-largest-pem-electrolyser-for- hydrogen-production-an-important-step-towards-gw-size-electrolyse-plants/

13  https://www.statista.com/statistics/973609/oil-refineries-by-region-worldwide/


Scotland’s only refinery (and one of only six left in the UK). With a refining capacity of 210,000 barrels per day, Grangemouth is critical in supporting Scotland’s fuel demand and economy, responsible for 4% of the country’s GDP, and approximately 8% of its manufacturing base14. On top of the 550 people it directly employs, the refinery brings in local contractors for large-scale operations, such as turnaround activities, as well as experts from across the UK and the United States.

Establishing an electrolysis plant on site would enable the refinery to take a leading role in

the UK’s energy transition. Crucially, it would also help to future proof the refinery in a low carbon economy with the growing necessity and demand for biofuels and cleaner infrastructure compatible fuels that can be produced in a more sustainable way. As has been demonstrated by the REFHYNE project, it would enable Scotland to operate within Europe, ensuring a robust international consortium and supply chain cooperation. Crucially, the first REFHYNE project has already gained valuable data and insights, and proven knowledge, from which Scotland can benefit.

Scotland continues to embrace green hydrogen in industry and mobility. In the last eight months alone, the Green Hydrogen for Scotland Consortium secured £9.4 million funding from the Energy Innovation Portfolio competition run by the UK Government Department of Business Energy Innovation and Skills (BEIS)15; and planning consent was granted to Eneus Energy for a green hydrogen/green ammonia plant in Orkney, the first commercial facility of its kind in the UK16. Now the onus is on Scotland and the major industrial players that have operations across the country to maintain its net zero journey and keep the green hydrogen momentum going. With ample wind and water supplies, Scotland is ideally positioned as a heartland of hydrogen. These natural assets should not be squandered, instead utilised in order to decarbonise industries such as refining and empower the transition to a low carbon economy.

 

June 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


14 https://www.petroineos.com/refining/grangemouth/

15 https://itm-power.com/news/uk-government-investment-secured-for-whitelee-windfarm-green-hydrogen- phase-1

16  https://renews.biz/65939/orkney-planners-back-green-ammonia-plant/