Integration of low-carbon hydrogen value chains for hard-to-decarbonise sectors with wider energy systems: Whole-systems modelling and optimisation

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Low-carbon hydrogen has a crucial part to play in the UK's transition to net zero by 2050, complementing renewable electricity, and providing an alternative low-carbon energy source for sectors that are difficult to decarbonise. To kickstart a thriving low-carbon hydrogen economy, the UK Government has set a target capacity of 5 GW of hydrogen by 2030. This will require a rapid and large-scale deployment of generation capacity, infrastructures to support the delivery of the hydrogen to its end uses, and growing its demands. Switching energy-intensive industries to low-carbon hydrogen could help accelerate its uptake and provide a reliable demand to entice producers into the market. This is also the largest opportunity for reducing CO2 emissions: per tonne of hydrogen used, heavy industry can abate about 4 times as much CO2 as other sectors. Once the market has been established, this could trickle down to other sectors, such as heating in buildings and transport, particularly long distance and heavy duty, where battery vehicles are not well suited, helping to progress the UK towards net zero.Switching energy-intensive industries to hydrogen is an effective way of integrating hydrogen into the whole energy system. This project will investigate how this can be done: what the system requirements are as well as the benefits and impacts of doing so. First, we will understand how energy-intensive industries will perform technically, economically and environmentally if they switch to hydrogen, using steelmaking as an exemplar with a process known as Direct Reduction of Iron combined with Electric Arc Furnace, by building high-fidelity mathematical models of these processes. These will be compared with other decarbonisation options for steelmaking, such as efficiency improvements, retrofitting with carbon capture, storage and utilisation technologies, and using alternative reductants and fuels such as biomass.We will then explore the implications of integrating these processes and the value chains for supplying low-carbon hydrogen into the wider energy system. This requires a whole-system modelling approach that uses optimisation for the planning, design and operation of the overall system. The model includes a representation of the possible technologies, infrastructures and resources, and determines the optimal combination of these (what technologies and infrastructures to deploy, where and when, and how to operate them over time) in order to satisfy the demands for energy services and products, while satisfying constraints (e.g. environmental), to minimise an overall performance criterion (e.g. total costs or GHG emissions). We will use the whole-system model to answer the following questions.1. Can sufficient low-carbon hydrogen be produced in the UK for the steel industry? What is the optimal mix of green and blue hydrogen to minimise costs and environmental impacts? How much renewable energy will be needed?2. How to ramp up demands in low-carbon hydrogen and what are the roles that technologies could play in achieving the levels of production needed to meet the targets? How will the hydrogen value chains develop and expand?3. Once the energy-intensive industries, such as steel, have been decarbonised using hydrogen, which sectors should be decarbonised next?4. What are the impacts on the electricity network and the wider energy system? How much energy storage capacity will be needed and in what form?5. What are the costs and benefits of developing highly integrated industrial clusters from the start, and expanding the network by building more clusters and linking them, as opposed to developing less-integrated networks nationally and then gradually increasing their integration?6. What market frameworks and policies can be put in place to ensure that steel, and other products and energy services, produced from low-carbon hydrogen will be economically competitive, locally and internationally?