Northern Gas Networks Deployment Study Findings

RNS Number : 8506L

ITM Power PLC

24 April 2018

 

24 April 2018

ITM Power plc

("ITM Power" or the "Company")

Northern Gas Networks Deployment Study Findings

ITM Power (AIM: ITM), the energy storage and clean fuel company, is pleased to announce the outcome of the Large-Scale Power-to-Gas Energy Storage Deployment Study with Northern Gas Networks, the gas distributer for the North of England, Northern Cumbria and much of Yorkshire.

The feasibility study, announced in November 2017, and funded from the Department for Business, Energy and Industrial Strategy (BEIS) was to collaborate with Northern Gas Networks (NGN) to undertake an examination of the potential deployment of large-scale Power-to-Gas energy storage. The focus was on deployments capable of operating cost-effectively from 50MW energy storage capacity upwards within the boundaries of the NGN gas distribution network.

Findings

Four locations would be suitable for a large-scale first-of-a-kind power-to-gas demonstration supplying the stored energy to either majority domestic or industrial customers gas customers. Of the four locations Low Thornley in Gateshead is recommended as the most suitable site for deployment of a large-scale first-of-a-kind power-to-gas demonstration facility in the size range 50-100MW.

Low Thornley, the site of the InTEGReL (Integrated Transport Electricity and Gas Research Laboratory) facility in Gateshead, is capable of supporting large scale Power-to-Gas throughout the year from peak demands in winter, to the lower demand conditions experienced in the summer months.   Hydrogen injected at Low Thornley would deliver stored energy in the form of low carbon gas to over 243,000 customers. Also, Low Thornley' s close proximity to the A1 and the urban centres of Newcastle and Gateshead would provide opportunity for local export of hydrogen necessary to develop a local hydrogen refuelling station network which would enable fuel cell electric vehicles to travel from London to Aberdeen.

The recommended next steps are:

Undertake a Front End Engineering Design (FEED) study for a large-scale power-to-gas demonstrator in the size range 50-100MW to be built at the Northern Gas Networks Low Thornley site, to fully scope the programme and to establish the cost to build, install, commission and demonstration the facility.

Develop and agree a UK-wide gas network industry strategy for the wider demonstration and deployment of power-to-gas energy storage as a near-term contribution to the decarbonisation of heat and as a means to support the wider deployment of renewable generation by providing a route to a proven technology which can bridge the power and energy networks.

Process:

Areas of existing network constraint on the electricity distribution network were identified and the system balancing mechanisms in use by the System Operator were reviewed. Candidate locations were identified within the area of NGN's two Local Distribution Zones (LDZ), that could form the basis for large-scale power-to-gas energy storage demonstration sites on NGN's large scale distributed gas network.

Candidate locations were prioritised and analysed from a gas network perspective to identify sites suitable for detailed analysis including; pressure, gas flows, seasonal variations in demand, grid infrastructure. Taking existing network planning models for NGN's North and North East LDZ, maximum and minimum hourly natural gas flows across a range of demand levels were extracted.

Hydrogen production and efficiency data was taken from ITM Power's existing electrolysers and extrapolated to provide a long-list of hydrogen production rates up to 100MW size that could accommodate hydrogen injection at 20 vol%. From the long-list sites were categorised based on their ability to support the volumes of hydrogen energy produced by electrolysis at different scales and gas demand conditions.

These were centred on offtakes and large pressure regulator installations (PRIs) where the flows of natural gas are such that all year-round hydrogen injection can be achieved. One area identified, Seal Sands, is adjacent to three existing salt caverns used for hydrogen which are sufficient to provide low pressure intra-day and inter-seasonal storage.

Cross-sector export opportunities for hydrogen as a transport fuel for Fuel Cell Electric Vehicles (FCEV) in the North and North East regions were investigated using the rollout strategy set out by the industry / Government led UK Hydrogen Mobility (UKH2Mobility). Conclusions were drawn and suggestions made for the location and scale of size for a next step first of a kind deployment and demonstration of large-scale power-to-gas energy storage project in the region.

Graham Cooley, CEO of ITM Power, said: "This feasibility study has resulted in a close working relationship with Northern Gas Networks and the results are very exciting for the deployment of large scale Power-to-Gas energy storage on their network. Northern Gas Networks have emerged as leaders in the use of hydrogen in the UK gas network for both energy storage and for renewable heat. "

Mark Horsley, CEO of Northern Gas Networks said: "Power-to-gas technology has the potential to answer some of our key energy storage challenges because of the gas network's sheer size and flexibility. This study has delivered some compelling results and insight into how a whole systems approach and green hydrogen can facilitate decarbonisation across all energy vectors. By bringing gas and electric together, there is a valuable opportunity to drive down costs for customers, increase resilience and improve sustainability."

Keith Owen, Head of Systems Development and Energy Strategy at Northern Gas Networks, added: "The outcome of this feasibility study shows the exciting potential of power-to-gas energy storage on our network. With four preferred locations identified to cost-effectively deploy 50MW of energy storage facilities we now look to practical implementation. A Whole Systems approach to UK energy will drive decarbonization across the gas, electricity and mobility sectors. Power-to-Gas energy storage offers a new role for the UK gas grid which places a new value on an important UK asset, delivering new market opportunities, options for flexibility for the UK electricity Grid and Ultra Low Carbon solutions for transport."

For further information please visit www.itm-power.com or contact:

ITM Power plc Andy Allen, CFO	[phone]
Investec Bank plc (Nominated Adviser and Broker) Jeremy Ellis / Chris Sim / Jonathan Wynn	[phone]
Tavistock (Financial PR and IR) Simon Hudson / James Collins	[phone]

About ITM Power plc

ITM Power manufactures integrated hydrogen energy solutions for grid balancing, energy storage and the production of green hydrogen for transport, renewable heat and chemicals. ITM Power was admitted to the AIM market of the London Stock Exchange in 2004. In September 2017 the Company announced the completion of a GBP29.4m working capital fundraise. The Company signed a forecourt siting agreement with Shell for hydrogen refuelling stations in September 2015 and subsequently a deal to deploy a 10MW electrolyser at Shell's Rhineland refinery. Additional customers include National Grid, RWE, Engie, BOC Linde, Toyota, Honda, Hyundai, Anglo American among others. The Company's order pipeline stands at £33.3m of projects under contract and £5.8m of contracts in the final stages of negotiation, totaling £39.1m (subject to exchange rate variation).

About Northern Gas Networks

Northern Gas Networks Limited (NGN) distributes gas to households and businesses in the north of England. It owns and maintains approximately 37,000 kilometres of gas pipes and delivers gas to 2.7 million customers in the North East, Northern Cumbria, and Yorkshire. NGN is regarded as a frontier network, taking a lead on efficiency, safety and relentless focus on the customer to ensure the highest levels of service. NGN has pioneered the research into hydrogen as a new fuel source and has been actively pursuing the possibilities of utilising hydrogen as a heating source in the UK through the H21 Leeds City Gate project.

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