Emissions reduction |


more cheaply using standardised units. That model has continued to prove attractive. This year 170 small – under 50 MW - gas engines, representing over 2 GW of capacity in total, won contracts in the Capacity Market auction, for delivery in 2024/25. A further 150 small gas engine projects, representing another 2.3 GW, entered the auction but exited as the price fell. The advent of gas engines attracted new investors, who saw in them a similar profile to a previous boom in solar farms. ‘Kit-type’ technologies and small multiple sites offer easy entry for investors, and a raft of new funds have been set up specifically to invest in these projects. A similar story has been emerging in the battery storage sector. So far the numbers are small: 32 battery projects were awarded contracts in this year’s CM auction, for a total


of 251 MW. But the pool of capacity is growing. Other battery storage projects entered the auction and exited as the price fell and these are the next wave: they are new-build projects, somewhat larger than the first – but below the key 50 MW limit – with 27 projects representing a total of 515 MW.


The initial surge of investment in gas engines was a surprise to most. The current boom in battery projects was less surprising, not least because it was led by the same investors who saw they could replicate the conditions of the gas engine funds. Electrolysis combines a replicable technology whose costs are likely to fall as manufacturing matures and the availability of sites where renewable generators are regularly constrained off – meaning a potential payment for absorbing excess power.


In comparison to CCS, whose support is only now being consulted on by BEIS, support for hydrogen as a low-carbon transport fuel is already in place. This time it should be to no-one’s surprise if the industry sees small installations spread quickly. It is certainly the view from BEIS, which said in its hydrogen strategy that when it comes to green hydrogen, “The first movers in the early 2020s are likely to be relatively small (up to 20 MW) electrolytic hydrogen projects that can be deployed at pace, with production and end use closely linked, for example, at a transport depot or industrial site. By the mid-2020s we could start seeing larger (100 MW) electrolytic hydrogen projects” which will coincide with the first CCUS- enabled hydrogen production facilities based in industrial clusters.


…and CCUS clusters


With the UK carbon capture (CCUS) Track-1 cluster announcement due in October, there is a growing sense of anticipation in the green energy industry. Richard Cockburn, head of energy at law firm Womble Bond Dickinson, explains the latest state of play for CCUS in the UK and looks at what’s coming next We are not yet two full years into this decade but for the green energy industry the end of the 2020s is already looming large on the horizon. This is especially true for those pioneering projects which aim to make CCUS a success in the UK. With a carbon capture target of 10 million tonnes annually by 2030, it is clear that the UK’s Clean Growth Strategy and wider clean energy agenda cannot be met without the success of CCUS clusters and that the rapid development of clusters in the UK is now a necessity. CCUS is developing quickly in the UK and is starting to attract


growing interest from green finance investors and stakeholders. Alongside UK government funding, unlocking this private investment will be the key driver for success. There is still a lot of work to be done and all eyes are on the Track-1 announcement in October, which will confirm which CCUS clusters in the UK will be in the first wave of these projects.


CCUS – where are we now? Five projects across the UK have reached the required standard


to be considered for Track-1. These projects include: ● DelpHYnus, operated by Neptune Energy ● East Coast Cluster, which brings together the BP-led Net Zero


Teesside and Equinor-led Zero Carbon Humber schemes and the Northern Endurance Partnership (NEP), which involves Eni, National Grid, Shell and TotalEnergies


● Eni’s Hynet scheme located on the north-west coast of England


● The NECCUS Scottish Cluster, which includes the Acorn scheme with backers Shell, ExxonMobil, Storegga, Harbour Energy, Macquarie, Ineos, Petrofac and Wood


● V Net Zero, led by Harbour Energy In order to be shortlisted, the projects had to demonstrate credibly that they could be operational by 2030, be located within the UK, and meet the definition criteria of a CCUS cluster. The UK government’s definition of a CCUS cluster is a transport and storage network (ie, a set of onshore pipelines, offshore pipelines and an associated offshore storage facility) and an associated first phase of at least two CO2


capture projects. The pipelines must be capable of transporting CO2 to the storage


site (for example a saline aquifer or depleted oil and gas field), which must be able to store this CO2


safely and permanently.


It is encouraging news for the UK that all five clusters that submitted applications made the grade.


Collaboration is key


Although some of those clusters considered for Track-1 will miss out in the immediate term and may need to wait for Track-2 or later phases, it is collaboration, not competition, that will define the success of carbon capture clusters. There is going to be an element of realpolitik here and


pragmatism will rule. For example, some stakeholders will be members of more than one cluster. Throughout the process, there has been much sharing of best practice, and that will have to continue into the future to drive the pace needed to develop infrastructure and models for success. In order to develop and build the clusters, a solid, dependable supply chain will need to be in place. Clusters will need to collaborate to ensure optimisation of the supply chain to deliver the work.


The clusters themselves are collaborative entities – NECCUS and the East Coast Cluster, for example, both bring together a number of private and public bodies. We expect to see in the future the clusters sharing information and working together for their overall objectives.


So, what happens next? The UK government is amending the CCUS phases to a sequential approach and it is now planning for the launch of Phase-2 (for selecting projects to connect into a cluster) to be made in parallel with, or very soon after, the Track-1 cluster announcement. The UK government has previously confirmed that the Phase-2 application process will be open to all prospective capture projects which could feasibly connect to one of the clusters provisionally sequenced onto Track-1, regardless of whether they featured on the original submission. The UK government has noted that this sequential approach will “help to address concerns over nugatory effort of Phase-2 applicants which may have resulted from the previously proposed overlay approach.” It will also allow hydrogen stakeholders time to respond to the business model consultation; the feeling is that hydrogen is running behind CCUS at present and needs to catch up. It is not anticipated by the UK government that any of these changes will impact the ability for two clusters to be operational by the mid-2020s.


20 | September 2021 | www.modernpowersystems.com


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