National Gas Transmission – Written evidence (LES0017)

 

National Gas Transmission (NGT) is the backbone of Britain’s energy system today. We own and operate the gas national transmission network, delivering energy to where it is needed in every part of the country. We keep households warm and underpin their quality of life. For business, we fuel growth and innovation. We are looking to the future by developing the hydrogen transmission system of tomorrow but recognise the need for a fair and affordable transition which includes a role for natural gas. We will play a leading role in the transition to a clean energy future that works for every home and business.

 

We welcome the opportunity to respond to this call for evidence. Energy storage (including hydrogen) will play a critical role in delivering secure, resilient and flexible energy system. We trust that the detail of our response will support the need to start developing long duration storage now to enable the delivery of a decarbonised electricity grid by 2035.

 

1. How much medium- and long-duration energy storage will be needed to reach the Government’s goal of a fully decarbonised power grid by 2035 and net zero by 2050, and by when will it need to be ready?

 

Energy storage will be critical in delivering a reliable, secure, and flexible energy system and can come in a number of forms, e.g., methane storage to supply abated CCGTs, hydrogen for new hydrogen-compatible stations and various electricity storage. To deliver the Government’s target for a fully decarbonised power grid by 2035 and net zero by 2050, energy storage will be a critical component, especially for UK where seasonality is key driver of energy demand.

 

Long duration energy storage (LDES) is required to smooth out seasonal supply/demand variations to support market-based arrangements, physical constraints and ensure a reliable and flexible energy system that will increasingly be supplied using intermittent energy sources. While the amount of storage required may vary across different scenarios, there is a well-defined need for it and therefore decisions to develop long duration storage facilities should not be delayed; due to the time taken to develop LDES storage (e.g., hydrogen storage), decisions on progressing a low regrets quantity of storage should be taken as soon as possible.

 

Regardless of future energy scenarios, there is a base level of storage that is consistent across them all, and there are limited options for LDES and long lead times. Therefore, to deliver a decarbonised grid by 2035, we cannot wait until we have certainty on the exact capability needed and work on long range storage solutions must begin now to enable the delivery of a decarbonised power grid.

 

The level of storage will also require a strategic approach, partly based on the ambition to provide a level of resilience and flexibility. There will need to be a decision on the need for storage that is not initially driven by the market but is seen as needed for the development of the relevant markets.

 

The Future Energy Scenarios (FES) currently produced by National Grid ESO provides an indication the level of storage needed. For example, in their System Transformation scenario, 56 TWh of hydrogen storage is required by 2050.

 

 

As mentioned above, long duration storage is essential across all net zero scenarios and therefore the electricity network would rely on LDES in all scenarios. Multiple factors, including technology, policy, and geography, influence the level of storage required. The Future Energy Scenarios (FES) currently produced by National Grid ESO provide a better indication of the potential needs case, and National Gas Transmission’s (NGT) GETIO innovation project (undertaken in conjunction with NGET and NG ESO) outlines how much hydrogen storage may be required as part of this. One of the GETIO conclusions states that “In all modelled scenarios, hydrogen storage is critical in supporting whole energy system demand during peak demand periods and low wind days.” It goes on to say “Hydrogen storage plays a critical role during high demand, low wind days, delivering up to 95GW of firm, dispatchable supply and supporting both the gas and electricity systems.”

 

 

FES provides an indication of the range of potential future electricity demands, and clearly shows that both electricity demand as well as peak electricity demand will increase. Rising from 289TWh in 2022 to 377TWh-482TWh across the scenarios in 2035.

 

The continued focus on peak demand and the corresponding reliable supply is needed, along with an increased focus on periods of low and high renewables resulting in supply / demand imbalances that will further emphasise the need for all forms of viable storage, i.e. more renewables in the energy mix would signal a need for higher levels of LDES hydrogen.

 

2. How sensitive is the amount of storage needed to assumptions about the future balance of supply and demand on the grid?

 

Balancing the future electricity demand and supply in real time will become more challenging as increasing levels variable generation are connected to the electricity grid, bringing in weather risk. One of the key considerations for the level of storage needed to provide a reliable, flexible, and secure energy system will be the supply mix and the variability of demand (and how these correlate). There will also be other key considerations such as level of Security of Supply and level (and duration) of Demand Side Response (DSR)

 

 

Natural gas (including natural gas with carbon capture and storage) and hydrogen generators will have a key role to play in delivering flexible dispatchable electricity generation to help balance supply and demand. These technologies are an essential flexible energy source as they are dispatchable and can also provide long duration storage. The electricity supply mix will require diversity (i.e. mixture of baseload and dispatchable plants) to ensure security of supply and growing exposure to intermittent and imported electrons.

 

 

Electricity interconnectors will play a meaningful role in managing supply-demand imbalances. However, they may not be able to be relied upon during certain events e.g., long duration low wind events that may spread across the North of Europe, and require no barriers for trade. Greater interconnectivity will also be beneficial for methane and hydrogen, providing wider energy sources.

 

 

Demand side response (DSR) of electricity can be used to manage supply-demand balance and will be limited to shorter timescales. This will require strong consumer engagement and may not be suited or economic for longer periods of time.

 

Hydrogen production via electrolysis will play a key role in managing demand supply imbalances (as indicated in the FES) i.e., being able to utilise excess renewable supply in times of supply excess or reducing demand for hydrogen production in times of renewable supply deficit; this will also facilitate the production of hydrogen that can be stored for long periods. Additionally, natural gas DSR is used as a flex tool, albeit primarily for industrial/commercial purposes.

 

 

Assessment of network needs are dependent on defined circumstances with the aim of providing a reliable and secure energy system for a large range of reasonable circumstances. The impact of climate change on these circumstances will need further consideration; as an example, average warmer winters may not result in changes to extreme winters and therefore may not result in changes to requirements.

 

Within the FES, there is an estimate that there will be increases in summer temperatures resulting in an increase in air conditioners and therefore an increase in summer electricity demands. Importantly, higher summer temperatures additionally impact power generation technologies such as nuclear and hydro, thereby adding further a call on energy storage.

 

For the assessment of storage, a dunkelflaute event (long duration low wind and solar event) can occur at any time, resulting in the need for alternative electricity production, such as hydrogen generation, regardless of the time of year.

 

3. Which technologies can scale up to play a major role in storage?

 

Technologies will be largely dependent on timescales for which storage will be required, and both natural gas and hydrogen storage will play a major role in long duration storage, alongside other technologies such as pumped hydro and flow batteries.

 

Hydrogen and natural gas storage can be scaled up allowing them to play a major role in delivering LDES and also providing medium range storage. These technologies are already providing such services into the natural gas market within the UK and across Europe and we believe that hydrogen will be able to provide scalable energy storage solutions to the future hydrogen system.

 

The graph below illustrates the potential for different storage technologies and their energy storage characteristics together with their technology readiness.

 

Comparison between different storage technologies [7]. Courtesy of Dr... | Download Scientific Diagram

 

 

Natural gas and hydrogen will both play a significant role in long duration storage and can also play a role in medium duration storage.

 

 

Natural gas storage technology is mature and has been in usage for some time. Likewise, hydrogen storage technology is mature and further studies are being conducted to assess the readiness of rock and salt caverns for hydrogen storage purposes. See image above for technology readiness for other technologies.

 

 

Long term storage serves to smooth out the difference between over and under supply, and studies show that it will be possible to generate enough green hydrogen from renewable electricity to store and use during periods where demand is greater than supply. Furthermore, a whole systems approach to decarbonising the electricity grid will be lower cost than a pure electric one, allowing renewable electricity to be fully utilised, instead of being constrained off.

 

 

There is a potential role for technologies for solar thermal at a domestic level that could be workable/affordable as part of the overall energy mix. This evidences the need for all employable technologies to play a part to address the challenge of climate change.

 

4. What policy support is currently in place to support deployment of storage technologies? Is it sufficient to support deployment at scale?

 

The Department for Energy Security and Net Zero (DESNZ) is currently working to a timeline of 2025 for the design and implementation of the business model for hydrogen storage. However, to ensure that there is sufficient storage in place to deliver the decarbonised electricity system by 2035, decisions may need to be made earlier to facilitate the long lead times for the development of underground storage facilities. For natural gas, the development of storage facilities are market-driven.

 

 

Natural gas storage has traditionally been seen as a commercially driven provision. However, the more expansive role of storage in energy resilience and security of supply can only strengthen the economic case. The DESNZ recent minded to position on business models design, regulatory arrangements, and strategic planning for hydrogen transportation and storage infrastructure, sets out the Governments direction of travel for hydrogen storage, and serves as a useful reference point here.

 

 

To meet our net zero commitments, there will be a need for significantly increased amounts of electricity, which translates to increased levels of storage to support it. This will result in changes to all networks including natural gas, hydrogen, and transmission and distribution. The existing natural gas system will continue to provide reliable, secure, and flexible energy for natural gas consumers and also for electricity production. Project Union is our vision for the development of a hydrogen transmission network that will be vital as it will provide the necessary network resilience by connecting hydrogen production, storage, and demand (including hydrogen electricity generation). It links stakeholders across the board and ensures security of supply for the UK. The development of Project Union looks at whole system interaction and the interaction between electricity and hydrogen systems. Project Union will provide a whole system approach to delivering a net zero energy system at lower costs.

 

 

Market drivers alone are unlikely to meet Government’s need for the development of storage to manage system needs in line with the proposed timelines for a decarbonised electricity system. We believe that storage development will require strategic investment decisions ahead of need in order that the physical and commercial frameworks are successfully developed and implemented. This was also a key recommendation from the latest CCC review of Net Zero policies and their recent report on “delivering a reliable and resilient decarbonised power system by 2035”.

 

6. Beyond the cost of deploying long-duration energy storage, what major barriers exist to its successful scale up (e.g., the availability of a skilled workforce, the ability to construct the necessary infrastructure on time, or safety concerns around new technologies)?

 

 

The development of any new and scalable technology (i.e. heat pumps, offshore wind, etc.) needs a supply chain that is robust and resilient and in place ahead of need. Whilst there is a methane storage industry, this is mature and unlikely to be ready to deploy an increase of scale without further investment in skills. The development of a hydrogen system (including hydrogen storage) will require the development of appropriate skills and supply chains. There are limited hydrogen training schemes available at present.

 

 

Hydrogen storage development timelines must be aligned with the development of a hydrogen ‘backbone’ in the form of Project Union, the proposed hydrogen transmission network. This will repurpose existing transmission pipelines to connect hydrogen production, storage, and demand to enable net zero by the early / mid 2030s.

 

7. What steps should the Government take now to ensure this storage can come online later in the current decade?

 

There needs to be definitive decisions and funding from Government’s side to ensure that LDES can come online later in the current decade, as the commercial risk associated is far too great for industry alone to take such projects forward. LDES, just like Project Union, is geared to deliver national resilience and relies on the delivery of robust business models to help implement both projects. These decisions should not be dependent on the development of the FSO and will need to be made at a faster pace. Government also needs to promote and support these solutions/technologies for a significant period of time in order for industry to develop the supply chain and the level of maturity for them to be sustained.

 

 

There are examples of countries like the Netherlands supporting large-scale hydrogen storage. HyStock is one such project by Dutch TSO Gasunie which recently saw an open season where the requested reservations far outbid the offered stored capacity. HyStock’s first hydrogen storage is expected to be commissioned in 2028.

 

11 September 2023