Incentives  for  deployment

• Increased Renewable Energy Generation

The necessity for dynamic grid balance with more renewables on the market is unavoidable. The combined system can successfully balance the grid to prevent the renewable energy systems from being curtailed, whilst taking the electricity from the grid in periods of very cheap or even negative prices. This situation is already happening in Germany and some parts of the United States, and similar trend is predicted to be seen in the UK in upcoming years. ​

• Decarbonisation of the Short Term Operating Reserve Market 

The likelihood of reducing, or even prohibiting fossil fuel generators from the Short Term Operating Reserve Market has been discussed in numerous articles in the past months. The amount of CO2 produced mainly by diesel generators is alarming, thus clean technologies might become an alternative solution any time soon. The ban of fossil fuel generators from the STOR market would immensely help our system become a key player in this niche market, as the technology can be described as a clean one.​

• More Incentives to Clean Transport Solutions 

The impact of the UK government’s subsidies would clearly improve economic feasibility of the proposed system. Predictions of government’s strategies are, however, very difficult to evaluate. Undoubtedly, clean transport and storage technologies will be parts of the future UK plans, however the amount of money dedicated to hydrogen technology is unknown, and therefore difficult to base our model on such a high uncertainty.​

• Carbon Tax Applied to Fossil Fuelled Systems

The application of Carbon Tax to all unsustainable technologies has been vastly discussed not only within the European states, but also globally. Such a  solution would rapidly accelerate the penetration of clean technologies to the market, however, it is unclear if or when this might to happen.​

• Mass Production - Lower CAPEX and OPEX

Mass production would significantly lower capital and operational cost. As with any other product or system, the investment costs would reduce rapidly with an increase in units on the market. As can be seen on figure 1, the capital costs of electrolysers and hydrogen fuel cell vehicles are expected to fall exponentially with higher production rates. This results in a great advantage for our system, which could be one of the leading clean technologies that can tackle the climate change issues.

Figure 1: Production cost for electrolyser for fuel cell vehicles as a function of annual production [1]

​Barriers  to  Deployment

• Storage of Large Quantities of Hydrogen on Site has Space and Safety Constraints

High capital costs are associated with hydrogen technology due to the lack of popularity with such systems. A solution could be to generate and store the hydrogen nearby offsite and pipe it to the site of use. Until the system cost is affordable and within the budget - which should hopefully happen as the technology becomes more developed - the project is not financially feasible without the need for intense funding.

• ​This Model Assumes there will be a Large Number of Fuel Cell Vehicles in the Future

One major assumption for this project is the vast popularity of hydrogen cars.  As long as petrol or diesel cars are cheaper to buy and run than hydrogen, there is a major challenge in the system's competitiveness.

Figure 2: Existing fuel cell vehicle fleet and targets announced by the European Union [2]

​Other barriers to deployment include:

• ​For large scale deployment, workers with new skills would be required for construction and maintenance of these facilities.
• Reinforcement of the network infrastructure would be required for operation of a large scale electrolyser.
• Inefficiency of system - improvements in technology would assist in the project development.

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[1] McKinsey and Co. (2011), A Portfolio of Powertrains for Europe: a Fact-Based Analysis, The Role of Battery Electric Vehicles, Plug-in Hybrids and Fuel Cell Electric Vehicles; US DOE (2012), Fuel Cell technologies Program Record; US DOE (2014d), DOE Fuel Cell Technologies Office Record – Fuel Cell System Costs.
[2] Weeda et al. (2014), Towards a Comprehensive Hydrogen Infrastructure for Fuel Cell Electric Cars in View of EU GHG Reduction Targets; personal contact with US Department of Energy; Japanese registration from database of Japan Automobile Dealers Association (JADA, March, 2015).