Deal will see firms work together to install electrolysers at renewable energy sites across the country in order to ramp up supplies of the zero emission fuel
The hydrogen arm of Octopus Energy Group and German energy giant Baywa re have inked a deal to build a pipeline of green hydrogen production facilities at solar and wind farms across the UK.
The strategic partnership, announced this morning, will see Octopus Hydrogen install electrolysers, compression, and mobile hydrogen storage technologies at Baywa renewable projects, with the first projects expected to come online as early as next year.
The energy companies estimate that wind and solar projects already being planned by Baywa have the potential to produce up to 6,500 kilograms a day of hydrogen, which would be produced by splitting water into hydrogen and oxygen using electrolysers powered by clean electricity. Up to 30MW of electrolyser capacity will be installed at these initial sites, according to the update.
Under the terms set out by the new memorandum of understanding (MOU), Octopus Hydrogen will produce green hydrogen which will be stored and then distributed to customer sites, enabling it to offer an “end-to-end” supply solution for a number of sectors.
Will Rowe, founder and CEO of Octopus Hydrogen, said the company wanted to pioneer a “decentralised model” for the clean fuel. “Our partnership with Baywa plays an important role by providing excellent renewable sites and the opportunity to share expertise,” he said. “Collaboration helps to unlock the potential of the green hydrogen market in the UK and beyond.”
Low carbon hydrogen is seen as a potentially invaluable decarbonisation solution for sectors where direct electrification is either technologically impossible or very expensive, such as long-haul aviation, freight, chemicals, cement, and steelmaking. Green hydrogen can be produced with zero emissions using renewable electricity to power the electrolysis of water, or blue hydrogen can be produced with low emissions by reacting fossil fuel gas with water at high pressure in a process called ‘steam reforming’, with resulting greenhouse gas emissions then captured and stored.
The UK government has pledged to build out a total of 5GW of green and blue hydrogen production capacity by 2030, with speculation mounting as to which approach is likely to prove the most cost competitive and scalable in the coming years.
Octopus and Baywa noted that co-locating hydrogen production facilities at renewable plants would help reduce costs, because it would reduce cost of the power used by the electrolyser. Roughly 30 to 40 per cent of renewable energy generation at plants would be directly consumed on site by the electrolyser, with the remainder fed to the grid, they said.
Octopus Hydrogen also said it would rely on new software that would optimise electrolyser use, helping to balance the power grid and maximise the use of renewable energy, the partners said.
Stefan Tait, head of energy storage and hydrogen UK at Baywa re, said the partnership represented another step forward for the firm’s work in the nascent green hydrogen sector. “Our partnership with Octopus builds on the innovative work we are already doing across Europe in producing green hydrogen from renewable energy, and we look forward to jointly deploying these concepts to help meet the UK’s energy transition targets,” he said.
The company is involved in a number of green hydrogen initiatives and is currently developing a pilot project in the Netherlands which will see solar energy from a 50MW farm converted into clean hydrogen using an electrolyser at of excess power generation.
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