Energy Transition Outlook 2019

TR & NSITION ENERGY

Energy Transition Outlook 2019

excess renewable electricity becomes available. This also represents an excellent opportunity for the offshore oil and gas expertise in the UK as the production of hydrogen can take place at offshore wind facilities through electrolysis before being piped ashore for use elsewhere. An example of this is Neptune Energy’s recently approved Q13a pilot project, due to begin production in 2021.

Hydrogen also represents a complementary technology to electrification of transport and heat that provides an additional decarbonisation option to consumers. As set out in the figures here, both systems require additional infrastructure, processes and costs, as well as new appliances, to deliver the same services to consumers. However, these costs may be affordable once these technologies are standardised and increased in scale.

Hydrogen Unit Cost Comparison p/kwh

Total Energy System Costs £billion pa

Natural Gas Retail Price w tax

Diesel Retail Price w tax

Full electrification

Electrolysis

Balanced Scenario incl. decarbonised gas

Biomass gasification with CCS

Methane reformation plus CCS

Current

Wholesale gas price

0 20 40 60 80 100 120 140

0

5

10

15

Energy costs

Infrastructure costs

Source:BEIS

Appliance costs

Total

Source: Navigant Report for the Energy Networks Association

34