Centrica – Supplementary written evidence (LES0045)

 

Executive Summary

 

Further to the evidence provided to the Committee by Martin Scargill, Managing Director of Centrica Energy Storage+, we undertook to share key findings from ongoing analysis that FTI are undertaking on our behalf which looks at the importance of taking a whole systems approach to net zero. This is the first stage of our work and we intend to test more assumptions using our economic model and generate further insights – many of these will be of relevance to the work of the Committee in relation to long-duration energy storage and the potential offered by hydrogen. This work is ongoing, however, this note provides a summary of findings to date.

 

  1. Under any Net Zero scenario, there will be significant increase in intermittent renewable generation capacity in Great Britain.

 

  1. Hydrogen expected to play a role in managing intermittency in the power sector as well as decarbonising hard-to-abate sectors.

 

  1. Managing peaks and troughs in electricity generation will require long-duration energy storage, of which hydrogen storage is the lowest cost.

 

  1. Storage can also provide security of supply for hydrogen users, given the absence of flexible production technologies.

 

  1. To lead the UK debate on the future of the hydrogen economy and infrastructure, we have developed a first-of-its-kind model which allows us to analyse the development of the electricity and hydrogen markets.

 

  1. The model co-optimises the electricity, hydrogen and natural gas sectors to assess the quantum of benefits of different hydrogen asset classes.

 

  1. Our initial results highlight the clear role for green hydrogen in a renewables-dominated system, centred around the critical importance of hydrogen storage and transport.

 


Background and introduction to the Whole-Systems Model

The significant deployment of renewables necessary to reach Net Zero will lead to a highly volatile electricity system. Wind and solar capacity is expected to increase more than fivefold, reaching 212-248GW by 2050 leading to unprecedented volatility in total generation.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy storage is needed to support low cost renewables. More than 500GWh surplus low-cost electricity will be available frequently on summer day and hydrogen, with storage, can bridge the gap between generation and demand in both directions.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

             

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


As an integrated energy company, working and investing across the value chain, Centrica is keen to contribute to the national debate about our energy future and, as part of this, have developed a whole-systems model. This first-of-its-kind model considers the dynamics by integrating all three energy vectors (electricity, gas and hydrogen) allowing us to analyse the effects of hydrogen economy developments on the energy system and consumers.

 

Our initial modelling explored differences in market outcomes under different infrastructure pathways.

Emerging Modelling Results

Our modelling illuminates the interplay between the three energy vectors and investment decisions.

 

Our results highlight the flexibility provided by storage and transport in different weather conditions, for example a windy day in 2045. Excess low-cost hydrogen production is stored while networks flow almost exclusively from North to South. A low wind day in 2045, where stored hydrogen released to meet both hydrogen and electricity demand while some networks flows reverse, to move hydrogen towards generators.

 


11th May 2045: 


9th November 2045:

 


Key Findings and Wider Implications