Long-Term Energy Storage: Hydrogen Opportunity. Stanford Natural Gas Initiative

Transcription

1 Long-Term Energy Storage: Hydrogen Opportunity Stanford Natural Gas Initiative October 17, 2018

2 Background Rationale Growing mismatch of timing of supply and demand due to increasing penetration of renewables Need for long-term energy storage Natural gas grid is a scalable and technologically feasible solution Status Countries and regions with high share of renewables are actively exploring long-term energy storage alternatives California regulators and policymakers are becoming increasingly aware of challenges associated with moving to higher RPS Interest is growing in hydrogen as a scalable and environmentally attractive energy storage solution and carbon reduction pathway 2

3 Growth of Renewables Is Creating Challenges for California Power Market Curtailments of Renewable Power Frequency of Negative Power Prices Curtailments of renewable power have been growing over last several years driven by the timeof-day mismatch of supply and demand and exacerbated by seasonality In parallel, instances of negative power pricing have been also growing as renewable generators bid below zero in pursuit of value of production tax credits Current trends are likely to continue as California moves to higher share of renewables in state s power supply When comparing spring months in recent years, the ISO recorded a 147-percent increase in renewable curtailment from the first quarter of 2016 to the same time frame in In the first quarter of 2017, about 3 percent of the total potential wind and solar generation was curtailed, and about 1 percent of the total potential renewable generation was curtailed. But during certain times of the year, it s not unusual to curtail 20 to 30 percent of solar capacity. On March 11, 2017, the ISO observed solar curtailment exceeding 30 percent of the solar production for an hour. Curtailment Fast Facts, CAISO Note: prices in 5-minute real-time market Source: CAISO 3

4 Storage Duration of Batteries Is Predominantly Limited to Four Hours Power Capacity and Duration of Large Scale Battery Storage PJM CAISO Rest of the U.S. Note: energy capacity data for large-scale battery storage installed in 2017 are based on preliminary estimates. Duration is calculated by dividing nameplate energy capacity in MWh by maximum discharge rate in MW, except in cases where the maximum discharge rate was not available, in which case the nameplate rating was used instead. Source: U.S. Energy Information Administration, Form EIA-860M and Form EIA-860 4

5 Minute Hour Day Week Season Hydrogen is a Scalable Energy Storage Solution for Low-Carbon Grid 10 GW 1 GW 100 MW 10 MW 1 MW 100 KW 10 KW 1 KW Battery Flywheel Capacity Pumped hydro Compressed air Super capacitor 1 As hydrogen or synthetic methane Comparison of Energy Storage Alternatives Hydrogen storage 1 Discharge Duration Source: IEA Energy Technology Roadmap, Hydrogen and Fuel Cells Energy storage is emerging as a critical element of transition to low-carbon energy mix: Provides grid stability Avoids economic disruption of power market Provides benefits to rate- and taxpayers Hydrogen may be the only scalable solution to address long-term energy storage need Batteries are mostly limited to duration of four hours Pumped hydro lacks scalability due to shortage of suitable sites and environmental permitting challenges Storing energy in chemical form as hydrogen or synthetic methane is scalable and has no losses over time 5

6 Hydrogen: Global Momentum International Energy Agency has identified hydrogen as instrumental in diversifying the global energy mix and reducing emissions Shell is predicting that hydrogen will be a major energy carrier from 2040 McKinsey estimates that hydrogen could account for up to 18% of global energy demand by 2050 Keele University explores hydrogen blending into is private gas network beginning 2019 (up to 20% hydrogen blend) Leeds, one of the largest cities in the UK, launched a project exploring feasibility of transition to hydrogen from natural gas (Citygate H2) Hydrogen Utility (H2U) and Thyssenkrupp are planning to build an electrolyzer plant with a 5MW hydrogen fuel cell and a 10MW hydrogen-fired turbine A $15-billion Asian Renewable Energy Hub project in Australia is planning to use part of its wind and solar capacity to produce hydrogen using electrolysis. Backed by CWP Energy Asia, Intercontinental Energy and Vestas, the project is targeting a final investment decision by 2021 AGL Energy and Shell partner with Japanese groups on a $375m Hydrogen Energy Supply Chain (HESC) project to import liquefied hydrogen to Japan Engie employs hydrogen energy storage for solar power (2018) Environment and Energy Management Agency announces goals of 10% decarbonized hydrogen in industrial energy use by 2023 and 20-40% by 2028 Toyota, Honda, Nissan, Tokyo Gas and others form a JV JHyM to expand hydrogen fueling station network in Japan; 900 stations are expected by 2030 Japanese companies such as Kawasaki, Iwatani, J-POWER and Marubeni are investing in hydrogen production projects in Australia and Brunei DEWA (Dubai Electricity and Water Authority) and Siemens sign MOU to pilot region s first solar-driven electrolysis facility (Feb 2018) Gov. Brown signs executive order setting the target of 200 hydrogen refueling stations in the state by

7 Policy Momentum for Hydrogen Is Building in California A growing number of thought leaders sees hydrogen as the critical part of a low-carbon energy solution: Ernest Moniz, Secretary of Energy Stephen Chu, Secretary of Energy Spencer Abraham, Secretary of Energy Daniel Yergin, founder of CERA consultancy and author of The Prize, a definitive book on global energy International activity in hydrogen is ramping up: Germany France Japan South Korea Australia China Hydrogen has support among California s policymakers: Gov. Jerry Brown (200 hydrogen stations by 2025) Mary Nichols (ARB) Policy makers and industry leaders worldwide are recognizing hydrogen as a major component of low-carbon future California s leadership is becoming increasingly attuned to hydrogen role Time is right for a focused and coordinated policy, regulatory and commercial effort to advance adoption of hydrogen in California 7

8 Multiple Pathways of Zero-Emissions Hydrogen Production Water Electrolysis / Power-to-Gas The use of electricity (e-) to split water (H 2 O) into hydrogen (H 2 ) and oxygen (O 2 ) H 2 O Renewable Electricity Electrolyzer Zero emissions hydrogen Using Renewable Natural Gas and Water Renewable CH 4 H 2 O Reformer Zero emissions hydrogen Using renewable natural gas (e.g., dairy methane) in a steam methane reformer (SMR) to produce renewable hydrogen (H 2 ) Carbon Capture Utilization / Storage Using natural gas in a SMR to produce H 2 and capture CO 2 CO 2 can be used as a feedstock for production of valuable materials (CCU) or stored in geologic formations (CCS) CH 4 H 2 O Reformer Zero emissions hydrogen CCU Carbon Fibers, Fuels, Concrete, Chemicals, etc. Applicable to fossil-fuel natural gas and RNG CCS Underground Storage 8

9 Zero-Emissions Hydrogen Can Decarbonize Multiple End-Use Sectors Enable renewable energy Decarbonize End Uses Hydrogen Transport, storage, End uses in transportation, production and distribution energy, buildings and feedstock Sources: Hydrogen Council, McKinsey & Co. 9