Project Definition, Aims and Concept

Project Definition

        This project investigates a futuristic response to the Capacity Market. It investigates the viability of a novel type of peak power plant, which would use hydrogen as a means of energy storage. This plant would be a modular in construction. The unit, or module size of an individual plant would be fairly modest, but the module could be replicated as many times as required.

Aims

        To investigate the viability of a novel hydrogen-based peak power plant, of modular construction, to see if it may be financially viable in the future, and if so, in what circumstances.

Approach

        The project took the following steps:
  1. Select a relevant module size of plant.
  2. Identify components of a simple type of peak power plant, based on hydrogen storage.
  3. Create a mathematical tool to calculate the necessary size of components, and the plant’s financial performance.
  4. Validate the tool.
  5. Identify realistic input information, using a scenario-based approach.
  6. Assess the cost-effectiveness of the plant, according to different scenarios, using the tool.
  7. Find out if there are any scenarios in which this type of plant could be cost effective.
  8. Consider the likelihood of the plant being financially viable in the future, and what circumstances, if any, would be needed.
  9. Briefly comment on other considerations for this project.

Concept Overview

  • Selection of the module size
        In order to define what would be the good size for our modular system, we get interested in an existing peak power plant scheme, aiming to ensure a security of supply and developed by National Grid, called the:
[3]  National Grid. (2013). Short Term Operating reserve (STOR) Frequently asked questions.
        Available: http://www2.nationalgrid.com/uk/services/balancing-services/reserve-services/short-term-operating-reserve/


         Peak power plants may bid to participate in the programme.  The main requirements of STOR - which were used to determine the module size of our system - are:

                               -   3MW  or more generation capacity
                               -   Able to generate for at least 2 hours at a time
                               -   Available for at least 3 calls per week
                               -   A 20 hours period is allowed between calls
                               -   Able to start generating within 20 minutes of being called

        National grid currently has over 200 peak power plants participating in the scheme. Over half of these plants are small: 3-10MW capacity [4]. Plants receive remuneration according to their individual contracts with National Grid.  Average payments for 2014/2015 [4] were:
                                -   Availability payments:    £ 2.56 /MW/h of availability         (i.e. payments for being on stand-by)
                                -   Utilisation payments:      £ 157.69 /MWh                                 (i.e. payments for generating electricity)

        Based on these STOR payments, it is assumed that the income for the envisaged hydrogen peak power plant will be:
                                -   A utilisation payment, or sale price of electricity, of:     £ 150 /MWh
                                -   An availability payment of:     £ 3/ MW/h of availability  

  • Overview of plant operation
        Here is the description of our system. It is made up with different components (electrolyser, compressor, hydrogen storage tank, fuel cell, power electronics), and behaves as follows.

        As stated on the diagram above, the concept of this system is to buy as cheap electricity as possible in order to refill the hydrogen storage tank, and to sell back this electricity to the grid at a higher price when it is needed.
        Each component has associated capital cost, operation and maintenance cost, and its own efficiency. As we will see later, these elements have an significant impact on the viability of the system. Altogether, due to the non-ideal aspect of the components, much more energy will need to be supplied to the plant, than the energy it will be able to deliver.

        This study aims to identify in what circumstances such a system would be viable.
[3]            National Grid. (2013). Short Term Operating reserve (STOR) Frequently asked questions. Available: http://www2.nationalgrid.com/uk/services/balancing-services/reserve-services/short-term-operating-reserve/
[4]            National Grid. (2016). Short Term Operating Reserve (STOR) Annual Market Report 2014/2015. Available: http://www2.nationalgrid.com/UK/Services/Balancing-services/Reserve-services/Short-Term-Operating-Reserve/Short-Term-Operating-Reserve-Information/