Strategy for Storage and Distribution of Energy A strategy for research, development, demonstration and commercialisation 2015-2025 The Danish Partnership for Hydrogen and Fuel Cells June 2015 + June 2015 © The authors Authors: Thea Larsen, Danish Gas Technology Center Allan Schrøder Pedersen, DTU Energy Benjamin Berg, Air Liquidé Carsten Rudmose, HMN Naturgas Lars Yde, University of Aarhus, Herning Lars Henrik Nielsen, DTU Management Engineering Theiss Stenstrøm, IRD A/S Ton Pichel, Akzo Nobel Josefine Jørgensen, the Danish Partnership for Hydrogen and Fuel Cells Aksel Mortensgaard, the Danish Partnership for Hydrogen and Fuel Cells Publisher: The Danish Partnership for Hydrogen and Fuel Cells Vodroffsvej 59 1900 Frederiksberg Denmark Online access: http://www.hydrogennet.dk/1054/ Layout and language support: Jill Ann Press and Charles Butcher Strategy for Storage and Distribution of Energy Table of contents 1Recommendations 4 2Preface 5 3 Future challenges for the energy system 6 3.1 The climate challenge 3.2 The energy system challenge 4 The role of storage in the energy system 4.1 Storage and flexibility options to balance future energy systems 4.2 Scenarios for a CO2-free energy system in Denmark by 2050 5Technologies 5.1 Conversion technologies and options for storage 5.2 Chemical storage technologies 5.3 Applications and requirements of storage technologies 6 6 7 8 11 13 13 14 16 6 Danish positions of strength 19 7 International perspective 20 8 Areas of action 21 9 Framework conditions 25 References 27 + Chapter 1: Recommendations Energy conversion and storage will be required in a future sustainable energy system based on intermittent renewable energy sources. This strategy document sets out areas of action for energy conversion and storage that support the ambition of becoming independent of fossil fuels by 2050. It discusses goals for technological development up to 2025. The reason for this cut-off date is the difficulty in forecasting suitable courses of action at longer timescales. We present potential conversion and storage options, with emphasis on the timescales at which they could operate. For these options or technologies the strategy identifies the most important Danish strengths, and sets these in an international context. The main focus of this strategy is to identify future areas of action for energy conversion and storage within the whole value chain, from research and development up to commercialisation. Most emphasis is given to Power-to-Gas and Power-to-Liquids, since most activity is expected within these areas. In the future much electric power will be converted to hydrogen, which in turn will allow biomass to be upgraded to methane and synthetic liquid fuels. Compressed air energy storage (CAES) and other storage technologies are also included in the strategy. As a relatively mature technology, CAES may catalyse the development of other energy storage projects that will ultimately provide significant storage within a fossil-independent energy system. Tables 8.1 to 8.4 show the future areas of action as foreseen today by the Danish Partnership for Hydrogen and Fuel Cells. Future updates to the strategy may include other storage technologies. An energy system increasingly based on fluctuating renewable energy will require balancing facilities for the upgrading and downgrading of power, as well as conversion and storage technologies. The strategy also points out the initiatives and structural changes needed to facilitate the adoption of the technologies and solutions described. Hydrogen technologies are already mature enough to begin operating alongside the wind, solar and biomass industries. With support, the Danish hydrogen industry should be able to begin exporting its technology within a few years. It is very important to set up the right framework conditions to make sure that green gases will find their way into the gas grid, and green synthetic fuels reach the market. Balancing technologies receive only minor support from today’s electricity tariffs. This situation must change in the future, so that renewable energy for conversion and storage processes receives incentives or is exempt from taxes. Public Service Obligation (PSO) support mechanisms need to change radically. Technologies for balancing power systems should be supported in the same way that wind, solar and biomass have been supported for years. Table 9.1 shows the necessary new framework conditions, with the highest priorities at the top. Strategy for Storage and Distribution of Energy 4 Chapter 2: Preface Denmark’s long-term political goal is to be independent of fossil fuels by 2050. There is also a political consensus that by 2020 more than 35 % of the country’s energy consumption should be based on renewable energy, and that approximately 50 % of all electricity consumption will be supplied by wind power. This transition in our energy systems in the years up to 2050 should take place without compromising consumer service quality or consumption patterns, while maintaining or improving the security of energy supply. To meet these ambitious political goals for energy it is necessary for Denmark to: 1) 2) reinvent the present energy system to accommodate the future supply of fluctuating renewable electricity; and implement new energy technologies that will allow the electricity grid to remain balanced during periods of both low production (when wind or sun are not available) and excess production relative to consumption. To meet these goals while continuing to improve the security of energy supply, energy conversion and storage will need to play a crucial role in the future energy system. Storage is already an integral part of our present energy system, of course. Much of our energy for electric power, heating and transport still comes from fossil fuels, which are easy to store. The interplay between these storable fuels and the various intermittent renewable energy sources, each with its own characteristics, provides a balance which underlies the effective functioning of our present energy system. The flexibility currently supplied by large central power plants will in the future have to be replaced by new balancing capabilities in the form of new technologies for energy supply and storage, as well as demand-side flexibility. Conversion and storage of renewable energy via synthetic chemicals offers the opportunity to use the same technologies and infrastructure for future back-up power as those we rely on today. This could solve the serious problem of how to provide power and heat during periods of low renewable energy production. The size of the requirements will depend on many external factors including the capacity of transmission interconnections, the penetration of demand-side management, and the installed generating capacity. There are many reasons to believe that market forces will ensure a significant future role for energy conversion and storage. This strategy presents some of the options for energy conversion and storage, and emphasises the timescales at which they may operate. Among these options, the strategy identifies those areas in which Denmark is strongest, and sets them in an international context. The main focus of this strategy is to identify areas for future action in energy conversion and storage, within the whole value chain from research and development to commercialisation. The Partnership for Hydrogen and Fuel Cells has set up advisory groups covering the various technological areas within hydrogen and fuel cells. Each of these groups has developed strategies and roadmaps identifying future areas for action. One of the strategy groups, Energy Storage and Distribution, developed this strategy document and published it in May 2015. Strategy for Storage and Distribution of Energy 5 Chapter 3: Future challenges for the energy system 3.1 The climate challenge Today the world depends heavily on fossil fuels: coal, oil, and natural gas. It has become evident that our current pattern of fuel supply and energy consumption causes global warming, environmental damage and climate change. The development and deployment of alternative energy technologies are crucial. Emissions of man-made greenhouse gases such as CO2, CH4 and N2O must be reduced. The basic challenge is therefore to transform today’s energy system towards a future system that is compatible with this reduction, without degrading our environment or risking the security of energy supplies. 3.2 The energy system challenge In Denmark, the political parties have reached a consensus to transform our energy system so that it is independent of fossil fuels by 2050. The technical lifetime of large energy system investments is typically up to 40 years. Thus it is important to identify robust forward-looking development paths towards a low-emission/non-fossil energy system. As a general trend, the power system continues to develop toward less-centralised generation. In addition, a smaller fraction of our future generating capacity will be fully dispatchable, while more and more of our energy will come in the form of unpredictable wind and solar power. These factors will make it increasingly difficult to balance the future energy system. Conversion and storage of energy are likely to become more and more important to provide such a balancing mechanism. Ancillary services linked to the transmission system, with very fast response times, will also in the future become increasingly in demand as a balancing mechanism. The future energy supply will be based mainly on biomass, waste, manure, wind, and solar. Biomass is storable and may be used according to the needs of the energy system, but it is a limited resource relative to Denmark’s present and future energy needs. The wind and the sun, on the other hand, generate fluctuating amounts of energy in the form of electricity, which is not storable without conversion. Until today, fluctuations in the conventional power system have originated mainly from the consumption side of the system. We still have only a limited degree of success in predicting future electricity demand, using historical data collected from various power grids. The future power system dominated by fluctuating renewable power resources will have a huge challenge in balancing supply and demand. Power fluctuations will increase on both the supply and the demand side. Backup capacity to meet peak loads and storage technologies to meet seasonal variations will therefore be of great value. As mentioned above, the energy system continues to develop towards decentralised generation. Bidirectional power grids allow energy from, for example, wind and solar resources – which are geographically distributed by nature – to be imported to cover regional shortages, or exported in times of surplus. Bio-methane and synthetic natural gas can be distributed in a similar way via the gas grid. Energy storage, system flexibility and increased inter-regional transmission capacity are therefore crucial to provide the required balance. Finally, energy efficiency improvements are generally robust solutions – “low-hanging fruit” from which it is relatively easy to profit. They are also independent of developments in the energy supply system. Beyond simple energy efficiency, it should also be possible to benefit from closer integration of demand and supply in electricity, heat, gas, transport, chemicals etc. Strategy for Storage and Distribution of Energy 6 Chapter 4: The role of storage in the energy system Various storage mechanisms are integral parts of our present energy system. Much of the fuel we use for generating electric power, heating, and transport is storable. These fuels are mainly fossilbased, in the form of coal, oil and natural gas, though recently biomass and biogas have also come into play. The interplay between these storable fuels and renewable energy, each form of which has its own characteristics, creates a balance that underlies the effective functioning of our energy system. The transition in energy systems towards 2050 should be carried out without compromising consumer service quality , while maintaining or improving the security of energy supply. In achieving this goal, storage will be crucial to the future energy system. In this context, storage is simply defined as “storing energy when it is produced, to be used at a later time” [1]. Any kind of storage system has the ability to absorb energy at times of surplus in relation to consumption, and to give back this energy during times of deficit. In an energy system with a very high share of wind power, there will be a significant number of hours per year when “excess” energy is generated. Under these conditions most of the wind turbines will be operating at close to their full rated output, producing far more electricity than is required to meet demand. The amount of excess energy generated can easily reach the GWh scale on an hourly basis, and the TWh scale on a yearly basis. In such situations, instead of curtailing the turbines’ output – and effectively wasting energy – the surplus can be stored for use at times when the wind is not blowing. Efforts to develop flexibility in the overall energy system will increasingly become key focus areas, in particular for balancing the power system. As a potential solution to future system challenges, energy storage technology will be highly important. Flexibility Future need for balancing power - Flexibility Demand Flexibility Storage Flexibility New Supply Flexibility Existing Supply Flex Low High Renewable Energy – Penetration Figure 4.1. Increasing shares of renewable energy will create a “ flexibility gap" in the electricity system unless we can add flexibility in other ways. After ECOFYS, Sustainable Energy for Everyone (2). Figure 4.1 shows how the flexibility that exists in the present energy system will fade away with time as more and more renewable energy comes into play. This balancing capacity will have to be replaced by new flexibility on the supply and demand sides, and through storage. Strategy for Storage and Distribution of Energy 7 An imbalance at any a given timescale must always be corrected through counteracting measures at the same timescale or faster. Below we give a brief account of some of the potential storage options, focusing on the timescales at which they operate. Today, we already see signs that the electricity market cannot fully absorb variations in demand and supply: we have an increasing number of short periods in which electricity prices are negative. The need for storage depends on how well the market develops and how fast the capacity of the power grid expands – through not only cross-border connections, but also inter-regional connections in large countries such as Germany. 4.1 Storage and flexibility options to balance future energy systems The work carried out under the Danish Partnership for Hydrogen and Fuel Cells promotes the conversion of wind power, when prices are low, into hydrogen (H2) as a gaseous energy carrier. This process is known as Power-to-Hydrogen (P2H2). Once produced, the hydrogen can be used to decarbonise other parts of the energy system. These include the mobility sector, via fuel-cell cars, and industry, via the production of methanol in a step known as Power-to-Liquids (P2L). Hydrogen can also be used to upgrade biogas by converting the carbon dioxide (CO2) in biogas to bio-methane (CH4), which can then be injected into the natural gas grid. This process, known as Power-to-Gas (P2G), allows the hydrogen effectively to be converted back to electricity and/or heat through fuel cells or gas turbines. System integration, reinforced grids and gas storage More power transmission capacity linking different geographic regions will likely level out wind power produced across the larger interconnected system, and may reduce the need for backup power and storage. Enlarged electricity markets, made possible by increased interregional transmission capacity that eliminates bottlenecks in the grid, can be instrumental in distributing the increased available regulation assets across the entire market area. Large gas storage facilities, including pipeline storage, are important parts of the regional energy system. In the future such storage could be an asset, for example in relation to upgraded biogas, biomass gasified to synthetic natural gas, or the widespread use of hydrogen as an energy carrier. The gas system would also be important in a future where, for instance, P2G technology is deployed. Denmark currently has two large storage facilities for gas: the Stenlille aquifer and the salt dome caverns in Lille Torup. The pan-European BioCat Consortium has made large investments in a 1 MW P2G demonstration site at Avedøre. By converting electrical energy to chemical energy in the form of methane, through the use of hydrogen, P2G allows surplus energy to be injected into the existing natural gas infrastructure to a practically unlimited extent. Also noteworthy is the very successful MeGa-Store methanation project led by DTU Mechanics in collaboration with GreenHydrogen.dk, Elplatek and Lemvig Biogas. The Power2Hydrogen project in Hobro will demonstrate dynamic operation of a 1.2 MW polymer electrolyte membrane (PEM) electrolyser for balancing the electric grid. The project will produce green hydrogen to fuel hydrogen cars, for industrial purposes and to upgrade biogas. The project is led by Air Liquide in collaboration with Cemtec. The Danish gas grid is well connected to the European natural gas grids, and considerable flexibility exists in the system. Danish natural gas production in the North Sea has been in operation for more than 30 years, and future depleted gas fields could potentially constitute a huge storage opportunity. Strategy for Storage and Distribution of Energy 8 The Danish gas grid covers most of the country, and may thus help to level out geographic local, national and even regional energy system imbalances. Such an extended network for gas is complementary to the power grid, and may allow for distributed renewable power developments that could ensure high security of energy supply. Then there is the huge potential to store vast amount of energy in the gas grid, even from one season to another. Heat and hydro storage in the present power system A combined heat and power (CHP) plant must meet demand and market profiles for both heat and electricity. This is often achieved by including heat storage, which reduces the operating constraints on the power side of the system and allows the plant to be dispatched as the electrical grid requires. Heat storage capacity thus reduces regulation constraints that otherwise may build up in the power system. The timescale for conventional heat storage covers about six hours of consumption. Heat storage systems integrated into future non-fossil energy systems, however, may in the future be considerable larger, potentially providing enough heat to meet demand for weeks. The gas system can also contribute to seasonal storage. Hydropower systems that include reservoirs can supply storage services on timescales ranging from seconds to months, or even years, depending on the site in question. This form of storage can provide system balance and stabilise output from the hydro plant as rainfall varies between seasons or in consecutive years. Pumped hydro describes a system in which water is pumped up to a reservoir when power prices are low, and then turned back into electricity when there is shortfall of wind or solar power. Strengthening inter-regional power transmission capacity will allow for more efficient use of existing storage, production and regulation capacity. Interconnecting regional power grids to form larger systems creates mutual benefits, such as covering local imbalances and improving security of energy supplies, at the expense of increased investment and greater reliance on grids. The expanded electricity markets will permit regulation exchange among subsystems and regions. The Scandinavian power system has historically been an example of this. The Norwegian power system is dominated by hydropower, while Denmark has had mainly thermal power plants. In dry years, when hydropower is in short supply, Danish thermal power can help conserve water in Norway; in wet years, excess Norwegian hydropower can be exported to Denmark and beyond. This is an example of mutual energy balancing on a timescale of years. Increased market development and new infrastructure connections linking Norway and potentially Denmark to the U.K. might change this situation in the future, thus adding further need for domestic balancing and storage services. Strategy for Storage and Distribution of Energy 9 CAES Compressed air energy storage (CAES) is the most effective bulk storage technology available in the market today. The process is proven, with two plants in operation: at Huntorf, Germany (310 MW) since 1978, and in Alabama, USA (110 MW) since 1991. Figure 4.2 shows the principle. Figure 4.2. How CAES works. Credit to 'Ridge Energy Storage & Grid Services LP' Recent EU policy coupled with innovation has positioned CAES as a technology for the 21st century. CAES’s ability to store excess renewable energy, combined with major improvements in efficiency (up to 60 % by 2018) and continued cost optimisation roadmap, will put CAES on an equal footing with combined-cycle gas-fired power plants on a total life-cycle cost basis. This optimism is reinforced by the advent of the first PCI (EU Project of Common Interest) CAES project in Ireland, which cites round-trip efficiencies of 53 % and construction costs of approximately €950 per kW and €200 per kWh. The expected commissioning date is late 2017. The Irish grid system offers up to €235 million per year to operators who can provide regulating services such as fast frequency response and primary operating reserve. Other markets across Europe face similar challenges in terms of promoting renewable energy, and these challenges are likely to grow stronger. New options for distributed electricity generation, storage and flexible consumption Demand-side management (DSM), which mobilises flexibility in energy consumption, is another important option for technical control. As a way of balancing power systems, demand-side flexibility is equivalent in its effects to conventional supply-side control options at the equivalent timescales. Demand-side flexibility aggregated into larger-scale regulation assets is being developed and marketed via so-called Smart Grids and Smart Energy Systems. An example of the latter could be a large number of small residential heat pumps, each equipped with heat storage covering several hours. Managed collectively, these could provide very fast response by switching off during times of high renewable power production. However, such systems are only able to down-regulate the power system. A more advanced example is a virtual power plant (VPP): a group of smaller generators or storage systems, possibly widely distributed, which thanks to power electronics is able to act as a single unit. One example is a VPP based around CHP systems based on hydrogen-driven fuel cells. In the future, electric vehicle (EV) batteries with higher capacities than those of today, fuel cell cars, and electrolysis for hydrogen production could extend regulating ability to much longer timescales. Strategy for Storage and Distribution of Energy 10 Another example of a VPP is a collection of uninterruptible power supplies (UPSs). These small autonomous systems provide reliable power to IT systems, hospitals and other applications where even a short power interruption is unacceptable. Since UPSs are idle for much of their lives, they could in principle be designed to provide regulating services to the grid without compromising their prime purpose. Wind and solar power based power systems with limited regulation capability may benefit from the above potential power balancing sources, which may to some extent compete with dedicated storage solutions. 4.2 Scenarios for a CO2-free energy system in Denmark by 2050 The Danish Energy Agency has published a detailed analysis of four scenarios developed to illustrate realistic options for transforming the Danish energy system towards fossil independence by 2050 (Table 4). Wind Biomass Bio+ HydrogenFossil Fuel consumption 255 PJ 443 PJ 710 PJ 192 PJ 483 PJ Level of self-sufficiency 104 % 79 % 58 % 116 % (*) Gross energy consumption 575 PJ 590 PJ 674 PJ 562 PJ 546 PJ Annual costs 140 bn DKK 136 bn DKK 159 bn DKK 143 bn DKK 130 bn DKK * Depending on Danish fossil-fuel production in 2050. Table 4. Main figures from the Danish Energy Agency scenarios for 2050. Fuel consumption includes any biomass conversion and transport losses abroad. (Source: Danish Energy Agency)(3) It is possible to draw some conclusions from this analysis: With the exception of a fossil baseline scenario, the scenarios analysed meet the aim of an energy system independent of fossil fuels by 2050. The scenarios outline the scope available for Danish energy supply in the future, showing that it is possible to realise Denmark’s very ambitious vision for 2050. The two scenarios named Wind and Hydrogen are of particular interest to the members of the Partnership. In summary, they are: • Th e Wind scenario is designed to use bioenergy corresponding more or less to what Denmark itself can supply, i.e. around 250 PJ. This does not mean that the bioenergy necessarily has to be Danish, but that it can be supplied from Denmark. This requires massive electrification within transport, industry and district heating, as well as a considerable expansion of offshore wind turbines. To keep the consumption of bioenergy low, hydrogen is produced and used to upgrade biomass and biogas to make it last longer. • Th e Hydrogen scenario imagines very small bioenergy consumption (below 200 PJ). This entails considerable use of hydrogen, and considerably more wind power than in the Wind scenario. Strategy for Storage and Distribution of Energy 11 These two scenarios show that for Denmark to attain self-sufficiency by 2050, in terms of its own renewable energy resources, it will be necessary to use hydrogen for storage. In these two cases, self-sufficiency of Danish resources is shown to be 104 % and 116 % respectively. Finally, Table 4 shows that the calculated annual costs of the Wind and Hydrogen scenarios are 140 bn. DKK and 143 bn. DKK respectively. Given the uncertainties associated with long-term cost projections, their costs are essentially the same. In Figure 4.3 the Danish Partnership for Hydrogen and Fuel Cells has sketched its vision of how a CO2-free energy system in Denmark could be configured around fluctuating renewable energy sources plus biomass, mainly via hydrogen-based electrochemical technology. The focus is on integrating electrolysis, fuel cells, biogas/bio-methane, thermal biomass gasification and synthetic gas production, and liquid synthetic fuel production with the grids for power, heat and gas. Figure 4.3: The Energy Value Chain, a vision for future energy supply systems. Source: The Danish Partnership for Hydrogen and Fuel Cells (4). Figure 4.3 outlines the Energy Value Chain, a long-term vision for an energy supply system that introduces hydrogen as an essential storable energy carrier in a 100 % renewable-based energy system. This vision may initially be seen as a hydrogen-based sub-system that in principle could develop and expand over time, if this is made a priority. The components of this sub-system, however, must still achieve competitive costs, efficiencies and environmental characteristics before we can transform the energy system of today into the vision set out above. For further information on the future electricity and gas infrastructure, please see ref 5 & 6. The following chapters in this Strategy address the various storage technologies shown in Figure 4.3. For each technology we note the status with respect to development, demonstration and deployment, outline the requirements for further technological development, and identify the framework conditions needed to reach international commercial markets. Strategy for Storage and Distribution of Energy 12 Chapter 5: Technologies Below we give an overview of the different energy storage options for Denmark. The Partnership recognises that energy storage technologies and conversion technologies are closely interconnected. In fact, this Strategy is founded on the idea that storage and conversion really cannot be separated. We could have chosen an agenda based on chemical principles, as shown by the right-hand column in Figure 5.1 (below). Instead, however, we chose to group storage and conversion technologies based simply on the physical forms of energy – electricity, gas, liquid fuels or heat – that they take in and give out. These are shown on the left-hand side of Figure 5.1. This structure matches that of Figure 4.3 showing the Energy Value Chain as previously published by the Danish Partnership for Hydrogen and Fuel Cells. The conversion technologies addressed here are those considered of highest importance for the storage of renewable energy. In Chapter 5 we give more details of this chosen structure, with the aim of underlining the relationship between conversion technologies and storage options. We place special emphasis on hydrogen and the related conversion and storage technologies. Finally we match the applications of storage technologies to the various requirements. Details are in Appendix 1. 5.1 Conversion technologies and options for storage Figure 5.1 gives an overview of the different energy storage options, grouped according to their physical or chemical principles. At the top of the list are the storage technologies that are most important from the perspective of the Danish Partnership for Hydrogen and Fuel Cells. The high priority of Power-to-Gas and Power-to-Liquids stems from the fact that these are the only ways to store electricity as a fuel both in large quantities and for discharge over long times (see Chapter 5.3 for more details). Physical principle Power to Gas Power to Liquid Power to Power Chemical principle Chemical Storage Electrochemical Storage Hydrogen Synthetic Natural Gas (SNG) Other chemical compounds (e.g. methanol, DME, Fischer-Tropsch diesel) Lithium Ion Batteries Metal-Sulphur and Metal-Air Batteries Flow Batteries (e.g. Vanadium Redox) Thermal Storage (heat and cold) Sensible Heat Storage (e.g. hot and cold water as well as other liquids or solids) Phase Change Materials Thermo-Chemical Systems Power to Power Mechanical Storage Pumped Hydro Storage (PHS) Compressed Air Energy Storage (CAES) Flywheel Storage Power to Power Electrical Storage Power to Heat Super Capacitors (sometimes considered electrochemical) Superconducting Magnetic Energy Storage (SMES) Figure 5.1: O verview of the main energy storage technologies, grouped according to their physical or chemical principles. Strategy for Storage and Distribution of Energy 13 Fossil fuels have allowed nature to store energy derived from the sun over millions of years. In the future we can mimic this approach by producing synthetic gaseous and liquid fuels for storage, using renewable energy as our starting point. In terms of energy content and heating value, these stored forms of renewable energy are directly comparable with fossil fuels. Unlike fossil fuels, however, they can be produced quickly. The storage technologies shown on the right-hand side of Figure 5.1 are addressed in more detail in Appendix 1 published at the webpage of the Partnership and ref 7 & 8. In this chapter, however, we will group and rank them according to the physical principle shown on the left-hand side of Figure 5.1, and below: Power-to-Gas Power-to-Liquids Power to Heat Power to Power Figure 5.2: Storage and conversion technologies classified by physical principle. These four physical conversion principles or energy forms follow the value chain through which energy is produced, transported, converted and stored for future flexible use in the energy system (see Figure 4.3). The conversion forms are presented in priority order, with Power-to-Gas at the top. Power-toPower, for example, will probably be less important than Power-to-Gas in a Danish context, so we will address it only briefly in this Strategy. Notwithstanding the priorities shown here, however, it is important to remember the valuable role that other technologies can play in balancing the future Danish energy system. 5.2 Chemical storage technologies Of all the storage options presented above, chemical storage through Power-to-Gas and Power-toLiquids is by far the most important. Thermal storage (both heat and cold) in the form of Powerto-Heat is also important, and will be widely applied due to the vast district heating network in Denmark. In the context of hydrogen and fuel cell technologies, however, heat is often considered a waste product that society should benefit from through system integration. The focus here is the interplay between the physical forms of energy – power, gas, and heat – as previously addressed. However, Figure 4.3 also underlines the future importance of electrolysis and hydrogen. Recognising this, we will now focus on conversion technologies and storage technologies that relate to hydrogen. First, we will look at the role of hydrogen in the past and its potential for the future. Storage of hydrogen for industrial purposes Hydrogen has been used for decades in industrial applications such as oil refining, heat treatment of metal parts, fertiliser production, and electronics. More recently it has also seen application in hydrogen-powered road transport. There are several ways to store hydrogen. The most common is as a compressed gas. For small and medium-sized industrial applications, hydrogen is today most often stored at a pressure of 200 bar in cylinders (transport or stationary) or “tube-trailers” (transport), and at 30 bar in vertical steel vessels (stationary). The traditional supply chain for hydrogen is well-understood and safely managed. Strategy for Storage and Distribution of Energy 14 Hydrogen is of major interest for transport applications because of its high energy content relative to its weight. Most new fuel-cell buses and cars that run on hydrogen are fitted with on-board tanks made from composite materials that store compressed hydrogen at 350 bar or 700 bar. Biogas upgraded through the use of hydrogen can also be used as a renewable energy source for long-haul or heavy transport vehicles, and in smaller vehicles that are already commercially available. Steam reforming of upgraded biogas (CH4) can produce methanol and diesel via processes known as Fischer-Tropsch reactions (Figure 5.3). Methanol can be added to petrol, while Gas-toLiquids diesel is a direct substitute for fossil diesel. From Straw to Liquid Fuels Manure and Straw H 2O Biogas reactor CH4 CO2 H 2S Gas purifier CH4 CO2 Methane reactor CH4 Steam reactor CO H2 Synthesis reactor Methanol CH3OH Diesel C18H38 S Heat Heat Heat H2 Figure 5.3: Hydrogen can be used to upgrade biogas – a mixture of CH4 and CO2 – to pure methane, which can then by turned into methanol and synthetic diesel. Alternatively, the syngas (H2 + CO) used as the raw material for Fischer-Tropsch synthesis can be produced directly through the thermal gasification of biomass. Biogas is a mature technology; thermal gasification, however, is still in the early stage of development. In terms of raw materials, the two technologies complement one another: thermal gasification is not suitable for straw, while biogas cannot easily be produced from wood. In both cases, adding hydrogen increases the burning value of the fuel produced: a stoichiometric balance between carbon and hydrogen allows all the carbon in the biomass to be fully utilised. In the same way, hydrogen is needed to convert CO2 to CH4 when upgrading biogas to methane. Transport currently accounts for almost one-third of final energy demand. Decarbonisation therefore demands that we find a way to run the transport system on renewable energy. Battery storage is likely to play a significant role, but today’s battery technology lacks sufficient energy density to supply mobile energy for long-distance passenger transport, heavy trucks, ships and aircraft. For these applications, energy stored in chemical forms, such hydrogen or synthetic methane, appears to be an attractive solution. Hydrogen can be liquefied and stored in insulated tanks at a temperature of -253°C. The liquid form gives very fast refuelling, and compared to compressed gas it allows more hydrogen to be stored in a container of a given volume. However, liquefaction requires much more energy than compression, and the insulation increases the weight and size of the tank. Several types of advanced materials, including intermetallic hydrides and complex hydrides, have been investigated for hydrogen storage. The idea is to bind hydrogen within the structure of the material, by either surface adsorption or chemical combination. These new methods have the Strategy for Storage and Distribution of Energy 15 potential to store hydrogen in smaller volumes than gas or liquid storage systems, and may require less conversion energy, but will often weigh more. Some metal hydride storage solutions are already available commercially. Energy storage based on hydrogen in larger volumes is done today in several places in the world, notably Teesside, UK, and several locations in Texas, USA. In Teesside, for example, the British company ICI has for many years stored approximately 1 million Nm3 of nearly pure hydrogen (95 % H2) in three salt caverns at a depth of about 400 m, without problems. Other forms of underground storage, such as in depleted oil and gas fields or aquifers, must be considered non-proven, although some experience has been gained with gas mixtures containing hydrogen. Large pipelines used to distribute gaseous hydrogen can also be considered as providing quite large storage volumes. Storage for balancing the future energy system In the future, storage at larger scale in caverns may be the most common way to use hydrogen to provide flexibility in matching supply and demand at an energy system level. Energy carriers such as hydrogen, bio-methane and synthetic natural gas have the potential in the future to interconnect the power and gas grids, thus providing flexibility in matching supply and demand at the energy system level. Storage of gas is already an integral part of both the power and the gas grids. The advantage of hydrogen and other renewables-based gases is that they can be stored at large scale below ground level, in aquifers, depleted gas fields and salt caverns. Salt caverns are ideal for gas storage because, unlike many other rock types, salt is completely impermeable to gas. They are normally produced as a by-product of the solution mining of salt. Methane is already stored below ground in Denmark. Energinet.dk, the Danish transmission system operator (TSO) for electricity and gas, owns two underground natural gas storage facilities. One is located in Lille Thorup near Viborg on Jutland (5.2 TWh of energy stored as 440 million Nm 3 of gas), and the other in Stenlille, about 70 km east of Copenhagen (7 TWh of energy as 575 million Nm3 of gas). Salt caverns used to store natural gas typically have volumes up to 1,000,000 m3, and are typically located at depths of 1,000-1,500 m. A single cubic metre of cavern volume can hold 100 Nm3 of hydrogen (as a rule of thumb) at a working pressure range of 100 bar (the difference between the minimum and maximum allowed pressures). 1 Nm3 of hydrogen has an energy content of 3.5 kWh (high heating value), so 1 m3 of cavern can store 350 kWh (0.35 MWh) of energy in the form of hydrogen. A 1,000,000 m3 cavern could store 350 GWh of energy, which is roughly equal to the yearly production of a 200 MW wind farm (say 40 turbines of 5 MW capacity) operating at a load factor of 0.3. 5.3 Applications and requirements of storage technologies In the context of balancing different power systems, we can divide the various storage technologies into two classes: power-intensive (unit: kW) and energy-intensive (unit: kWh). Power-intensive applications are required to provide so-called ancillary services to the TSO, the party primarily responsible for balancing the power system. In Denmark this is Energinet.dk. Powerintensive applications are characterised by a high ratio of power to energy (short discharge times) and fast response. On demand, they deliver bursts of power for time periods measured in seconds to maintain frequency and voltage, and so prevent blackouts. Strategy for Storage and Distribution of Energy 16 Energy-intensive applications are required to level the load across different parts of the power system by matching the supply of power to the local demand. Energy-intensive applications are characterised by a lower ratio of power to energy (long discharge times) and response times in the order of minutes to tens of minutes. When demand rises or production falls, such as when the wind is not blowing, they deliver power to the grid for periods ranging from hours to months. Figure 5.4 maps the different energy storage technologies presented in Figure 5.1 according to their power ratings and discharge times. It clearly shows the suitability of different storage technologies in providing particular balancing services to the power system. In particular, Figure 5.4 shows that storage technologies involving hydrogen and other renewable gases are most suitable for energy-intensive applications such as load levelling – that is, for providing a way to balance power systems with large shares of intermittent renewable generation. Figure 5.4: Suitability of different storage technologies in providing certain balancing services to the power system. Inspiration: the Electricity Storage Factbook of the Schlumberger Energy Institute. Figure 5.4 also shows the efficiency ranges for different technologies. Most efficient are the systems operating at relatively low power levels and short discharge times. Energy-intensive applications based on hydrogen and synthetic natural gas can still show respectable efficiencies, however. The response time or dispatch time of a storage system is also very important. Power-intensive technologies such as high-power supercapacitors would be expected to have very short response times, probably below one second. At the other end of the scale, energy-intensive storage technologies would probably have response times of up to a few minutes. Strategy for Storage and Distribution of Energy 17 Taking conversion losses into account, and assuming a conversion efficiency of 82 % for Powerto-Hydrogen, 458 GWh would be the energy content of the hydrogen produced yearly by electrolysis from a 335 MW wind farm. This hydrogen can be stored in a single cavern resulting in that roughly 80,000 fuel cell cars can run for one year on the hydrogen stored in a single cavern. In conclusion, hydrogen and synthetic methane are ideally suited to connect the power and the gas grids, thus providing a way to store the enormous amounts of excess renewable energy that are expected to be produced in the Danish energy system in 2050. As such, they provide the necessary flexibility to cope with the intermittent nature of our future primary energy sources: wind and solar power. Strategy for Storage and Distribution of Energy 18 Chapter 6: Danish positions of strength In Denmark we are widely recognised for our high standards and ambitious targets in areas such as environmental protection, wind power, energy efficiency, district heating, power and gas infrastructure, energy saving, and the use of large amounts of decentralised renewable energy. These achievements have not come easily. Over four decades, an intense focus on this sector by the public authorities, universities and enthusiastic private industrial stakeholders has played a crucial impact. The Danish Partnership for Hydrogen and Fuel Cells sees the strengths listed below as our most important: • • • • • • • • • • Decades of experience with the integration of large amounts of fluctuating wind and solar power in the power grid The Danish hydrogen and fuel cell industry, chemical industries, catalyst production industries, etc. Development and application of energy effective technologies Modelling techniques for energy system integration and balancing mechanisms Experience with building a nationwide gas grid and large-scale underground gas storage facilities Know-how on gas quality in mixtures of green gases with natural gas, and how this affects gas appliances Production of green synthetic gases, various kinds of fuel factories, and expertise in catalyst technology Tradition of strong public-private partnerships Strong base of small and medium-sized companies delivering specialised equipment and services Tradition of political consensus on energy matters. There is a solid future potential for job creation in relation to the process of making Denmark independent of imported fossil fuels and developing, demonstrating, deploying and marketing new energy technologies, all with the purpose of balancing the future renewable-based energy system. Markets for these new technologies will probably first materialise in Denmark, as a consequence of the rapid penetration of high shares of fluctuating renewable energy into the Danish energy system. This development will be followed in northern Europe, particularly Germany, and then, gradually, in the rest of Europe. Later still, the trend will spread more broadly to the rest of the world. Today the Danish wind turbine sector alone has approximately 30,000 employees. Assuming that we adopt the Wind scenario from the Danish Energy Agency report (Section 4.2), and with a yearly public investment of approximately 30 billion DKK from 2020 to 2050, we can expect to need up to 20,000 extra employees. The background for this number is a productivity index of 1.5 million DKK annually per employees. This number gives an idea of the huge potential for creating jobs in the transition of the Danish energy system from fossil fuels to one based on sustainable, renewable sources. Many of these new jobs are expected to be created in the commercialisation of new technologies, and the creation of integrated business and system models relating to energy conversion, storage and distribution. Strategy for Storage and Distribution of Energy 19 Chapter 7: International perspective Denmark is strongly integrated within the European energy landscape. Energy and energy services are intensively traded over borders. High-voltage electricity transmission lines connect Denmark tightly to neighbouring regions, and the Danish gas grid is similarly connected to the extensive gas grids of the rest of Europe. Denmark is a firmly committed partner in both the EU single market and other free trade agreements such as the Transatlantic Trade and Investment Partnership (TTIP). Technically and commercially, Denmark must operate in an international environment of competition, standards and mobility. The EU 2030 climate and energy goals agreed in October 2014 confirm that the EU as a whole is on the same track as Denmark, with a commitment to 40 % greenhouse gas reductions, 27 % renewable energy and a 27 % increase in energy efficiency by 2030. The planned European Energy Union will also focus on renewable energy. Obviously, no country in this situation can define and pursue its own independent path without taking notice of developments in other countries. For example, it would make no sense to develop Danish technologies for traction in transport independently of trends in the global car industry. On the contrary, it is important to work along the same lines as the rest of the world, so that we can target high production volumes and low prices. This does not mean that Danish technology cannot have a significant impact on international developments – as exemplified by our wind turbine industry. But it is important that technical developments in hydrogen and related technologies are made in collaboration with international partners across national borders. This has taken place fruitfully until now, and we must take the same approach in the future. Luckily we are in a strong position: Denmark is one of the leading countries in renewable energy technologies, including advanced hydrogen technologies. Nevertheless, many foreign partners are doing excellent work on hydrogen technologies, and cooperation with them will aid the development of competitive high-performance solutions suitable for the Danish energy system. Technologies based on skills, leading competences and international collaboration are effective routes to worldwide export markets and the growth of societal wealth. Strategy for Storage and Distribution of Energy 20 Chapter 8: Areas of action In the previous chapters we have shown that members of the Danish Partnership for Hydrogen and Fuel Cells are active within the whole value chain of energy conversion and storage technologies, from research and development through to commercialisation. A considerable amount of experience on the storage and transport of hydrogen, natural and green gases, liquid fuels, electrochemical energy and heat is gathered among the members of the Partnership, along with much experience on energy conversion processes and technologies. Finally, much experience is available in universities, especially in systems analysis and novel materials for conversion and storing hydrogen. The common goal for all stakeholders is to further develop these technologies and deploy them commercially. The background is Denmark’s very ambitious political energy goals for 2050, which pave the way for the rapid introduction and commercialisation of new technologies in an international context. Tables 8.1 to 8.4 show areas of action that support Danish ambitions to be independent of fossil fuels by 2050, though the goals listed in the Tables apply only until 2025. The reason for this cut-off date is the difficulty of foreseeing actions at longer timescales. The Tables also give most emphasis to Power-to-Gas and Power-to-Liquids, since most activities are expected to happen within these areas. Power-to-Gas in the form of methane has two different technology tracks. After the biomass has been gasified in a biogas plant, further processing into pure methane, to be fed into the gas grid, can be either by a chemical catalytic process (such as the MeGa-stoRE project in Lemvig), or by a biological process (such as the Electrochea project at Avedøre Holme). In both cases hydrogen is added, and reacts with the CO2 content in the biogas to form pure methane. The Power-to-Gas technologies referred to in Table 8.1 are based on the chemical catalytic processing route. Power-to-Liquids can be either by thermal gasification, where the biomass is converted into syngas, or by gasification of the biomass in a biogas plant. In both cases, hydrogen has to be added to the process, in order to adjust the stoichiometry to avoid emission of excess CO2. The Power-to-Liquids technologies referred to in Tables 8.1 and 8.2 are based on biogas followed by chemical catalytic processing. CAES and other energy storage systems are also included in Tables 8.3 and 8.4. With time, other storage technologies may be included, but the members of the Partnership have not yet identified the need to develop these. Strategy for Storage and Distribution of Energy 21 Power-to-Gas 2015–20172018–20202021–2025 Research and development CO2 methanation Optimisation and scale-up Scale-up to 250kW of biogas to 50 kW electrolysis, electrolysis 8.7 m3/h methane 43.5 m3/h methane Scale-up to 10 Mw electrolysis 1747 m3/h methane Demonstration Scale-up to CO2 methanation of biogas 250 kW electrolysis, 43.5 m3/h methane Scale-up to 10 MW electrolysis, 1747 m3/h methane Commercialisation Analysis and Scenarios for data collection and initiation of models and calculations systems integrationIntegrated analysis of the electricity, heat, transport and waste sectors Framework conditions Same public support/grant for 1st and 2nd generation upgrading of biogas. Less/no PSO on transmission and distribution. No taxes and duties on electricity for Power-to-Gas (Downstream) high-Regulations may allow the transport of hydrogen at higher pressures pressure transport regulations (Downstream) H2-powered Benefit of high-value offtake markets for hydrogen transport market Hydrogen contentEuropean standards on maximum hydrogen content in natural gas or bio-methane in vehicle fuels (current limit is 2 vol %) must be reviewed, and a higher limit agreed Table 8.1 Power-to-Gas: future areas of action Focus on hydrogen also needs to include recommended practices for injection of hydrogen into the gas grid. In addition, the risk and safety aspects of introducing hydrogen into the energy system, especially the ability of the gas grid to transport hydrogen, need to be investigated. Power-to-Liquids 2015–2017 2018–2020 2021–2025 Concept studies Biogas to CH4 to Fischer-Tropsch diesel and lab tests Proof of concept plant: 50 kW electrolysis, 22l/h diesel Scale-up to 250 kW electrolysis 110 l/h diesel Biogas to methanol Concept studies and lab tests Proof of concept plant: 50kW electrolysis, 63 l/h methanol Scale-up to 250 kW electrolysis, 315l/h methanol Research and development Demonstration Biogas to CH4 to Scale-up to Fischer-Tropsch diesel250 kW electrolysis, 110 l/h diesel Biogas to CH4 to methanol Scale-up to 250 kW electrolysis, 315 l/h methanol Strategy for Storage and Distribution of Energy 22 Commercialisation Analysis and Scenarios for data collection and initiation of models and calculationssystems integrationIntegrated analysis of the electricity, heat, transport and waste sectors Framework conditions 10 % biofuels for transport 20 % biofuels for transport 30 % biofuels for transport Same public support/grant for 1st and 2nd generation upgrading of biogas. Less/no PSO on transmission and distribution.No taxes and duties on electricity for Power-to-Gas Table 8.2 Power-to-Liquids: future areas of action The Danish Partnership for Hydrogen and Fuel Cells realises that Power-to-Gas and Power-toLiquids energy conversion and storage technologies still need some development before they can be applied at a commercial scale. The Partnership would therefore also support initiatives to introduce energy storage technologies such as CAES, which already has a proven commercial track record over the short term, into the Danish energy system. This may trigger the development of other energy storage projects that would ultimately contribute to a fossil-free energy system by 2050. With the right support from the Danish authorities, CAES deployment by 2020 is feasible, provided that the following conditions can be realised: CAES 2015–20172018–20202021–2025 Research and development CAESFeasibility studies Develop plans for a demonstration plant Demonstration CAESBuild a large demonstration plant Commercialisation Analysis and systems integration Scenarios for data collection and initiation of models and calculations Framework conditionsRecommendations for taxes and duties Phase-in of taxes and duties Table 8.3 CAES energy storage: future areas of action Members of the Partnership are developing above-ground gas storage systems as well as underground ones. It is important to demonstrate technologies for underground storage, and to reduce the price of above-ground storage. Strategy for Storage and Distribution of Energy 23 Storage systems 2015–20172018–20202021–2025 Research and development Underground caverns Feasibility studies Initiation of hydrogen storage Demonstration Underground caverns Initiation of a storage project Above-ground storage: Liquid hydrogen storage Capex 0.30 m Euro/t Capex 0.25 m Euro/t Capex 0.20 m Euro/t Gaseous hydrogen storage System capex 0.50 m Euro/t System capex 0.45 m Euro/t System capex 0.40 m Euro/t (Downstream) tube Trailer capex Trailer capex Trailer capex trailer transport of 0.55 m Euro/t 0.55 m Euro/t of 0.45 m Euro/t Commercialisation Analysis and systems integration Scenarios for data collection and initiation of models and calculations (Downstream) H2-poweredRegulations may allow the transport of hydrogen at higher pressures transport market Table 8.4 Storage systems: future areas of action Strategy for Storage and Distribution of Energy 24 Chapter 9: Framework conditions Incentives for renewable energy can be designed in many different ways, and no preferred method seems to exist among the legislatures of the world. Taxation plays a material role as an instrument of climate and environmental policy. Today taxes and other financial levies on energy and energy conversion are significant contributors to the national income, to the benefit of Danish society. In this way, tax law also influences the prevalence of renewable energy and clean energy, for example in terms of the storage technologies used in the future. The future energy system will increasingly be expected to be based purely on renewable energy. In the future, electric power will be converted to hydrogen. Biogas will be upgraded to methane, and liquefied synthetic fuels will be produced – in both cases by adding hydrogen. All of these renewable-based fuels can be stored in different ways with the aim of balancing the energy system. Balancing capacity for up- and downgrading of electricity, and conversion and storage technologies, will be integrated parts of the future energy system. These balancing technologies get only minor support from current electricity tariffs. This situation needs to change in the future. What will also be of utmost importance is how renewablebased power for conversion and storage will be taxed in the future. Such new framework conditions for the implementation of hydrogen solutions have to be seen in comparison to the alternatives. The situation today with respect to tariffs and taxes relating to conversion and storage technologies is: • T oday, producers of grid-connected power and heat are generally taxed on the income generated by the sale of their energy. However, producers who use or store electricity and heat at the point of production, solely for their own use, are not taxed. • Upgraded biogas is currently supported through prices fixed for one year ahead. Gas distribution companies are obliged to receive the bio-methane and feed it into the national grid. Hydrogen and synthetic natural gas produced from gasified biomass, on the other hand, are not supported in Denmark today, so activity in this field is lagging. • Wind power plants are subsidised through a feed-in tariff for the first ten years of their life, or up to a certain total amount of energy produced. Solar power was heavily subsidised until very recently. • Fossil fuels have been heavily taxed for several years. Given the maturity of its storage and conversion technologies, the hydrogen industry is ready to receive supporting incentives comparable to those that the wind, solar and biomass industries have taken advantage of over the past 30–40 years. Given such promotion and support, the hydrogen industry will be able to mature and begin to export its technology in the years to come. It will be very important to set up the right framework conditions to ensure that green gases and green synthetic fuels find their way into the market, and that such incentives comply with EU regulations in order to create a stable market. Strategy for Storage and Distribution of Energy 25 Table 9.1 shows the new most important framework conditions, starting at the top. Areas of actions Framework conditions Conversion/storage PSO tariffs supporting renewable wind, bio and solar power will not have to be paid on power used to balance the energy system. In consequence, only the spot market price for electricity, plus relevant parts of the net and system tariffs, will be covered. PSO support mechanisms have to be radically changed. Technologies for balancing the power system have to be supported in the same ways that wind, solar and biomass have been supported. Power-to-Gas It is very important that green gases are supported to at least the same level as upgraded biogas is currently. Change of taxationTaxes and regulation could be used even more to promote renewable energy, in the form of taxes on fossil fuels rather than support for renewables. Taxes rates could be changed to a percentage of the spot market price of power. This would result in variable taxes per kWh of power produced, thus amplifying price signals from the market. DeploymentMarket structures to promote hydrogen and other renewable-based energy systems need to be developed. Transport of hydrogenRegulation may be needed to allow the transport of hydrogen at higher pressures. Table 9.1 Framework conditions in relation to conversion and storage The overall national income from taxes must of course be large enough to support the politically determined Danish national budget and national expenditure on a yearly basis. However, it is important to begin the debate on how taxes and tariffs could be reduced or changed, or subsidies introduced, to enhance the transition of our energy system to one based on renewables. Only in this way will Denmark be able to meet its agreed political vision for the future of its energy supply. Strategy for Storage and Distribution of Energy 26 References 1 2 3 4 5 6 7 8 The Electricity Grid – Analysis of Danish power system function, Danish Energy Agency (background report), 2014 Flexibility options in electricity systems, ECOFYS Germany GmbH 2014. Energiscenarier frem mod 2020, 2035 og 2050 (Energy Scenarios for 2020, 2035 and 2050), Danish Energy Agency, 2014 Energikonvertering, lagring og balancering, stort potentiale i brint og brændselsceller, Partnerskabet for brint og brændselsceller, 2012 Energinet.dk’s analysis assumptions 2014-2035, Energinet.dk, 2014 Gasinfrastrukturen – Den fremtidige anvendelse af gasinfrastrukturen, Energistyrelsen, 2014 DTU International Energy Report 2013 – Energy storage options for future sustainable energy systems, Technical University of Denmark, 2013. DTU International Energy Report 2014 – Wind Energy – Drivers and barriers for higher shares in the global power generation mix, Technical University of Denmark, 2014 Strategy for Storage and Distribution of Energy 27
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