You don't mention liquid air long duration storage. https://highviewpower.com/projects/ The Manchester one is under construction and the Hunterston one due to be in operation in 2027
Also tidal power could provide more stable supply. Meygen has consent for up to 398MW and has built 2 phases so far. It's frustrating there are not more such projects as it seems to be working OK https://tethys.pnnl.gov/project-sites/meygen-tidal-energy-project. An interconnector to Norway as was proposed some years ago would enable access to their hydro. Conventional hydro can be ramped up to cover peak demand. Also demand management could reduce peaks. The Octopus tariffs for home solar and battery are interesting. If they and other companies developed this for business, this could really help manage supply and demand. Finally if Hyperscale data centres are allowed to be built, they will really throw the idea of a gradual increase in demand out of the water. The proposals for Scotland alone would have the power requirements of Glagow and Edinburgh combined and this power requirement is continuous, though AI isn't making any money and they could end up as white elephants if built. https://aprs.scot/resources/all-about-hyperscale-data-centres/
Hello Anne, no sign of liquid air in the Ofgem list. I suspect that the technology may be too expensive to compete. I remember giving a talk about Highview a decade ago to a bunch of engineers. At the end they came up to me and told me that the engineering was simply too complex to compete with batteries. They may be wrong but Highview's progress has been very slow compared to the explosion in short duration batteries.
They're building the Manchester one and the Hunterston one next year is using the existing grid from the shut down nuclear power station, which makes a lot of sense. Fairly small scale at the moment, but it makes much more sense than putting all their eggs in one basket. There are a couple of other liquid air storage sites which have been going a long time. I think the problem is mainly finance for a technology which is not widely known about. Maybe keep mentioning it! Same with wave and tidal. Not mentioned much, therefore hard to get finance. Bit of a vicious circle.
Look at the auction rounds, you'll find wave and tidal are way too expensive coming in well north of £200/MWH when prices are more regularly between 0 and about 130/MWH as a general base and peak prices, its not competitive and they have been trying to make commercial since the 1970's.
When you look at these projects, I'm not sure who is funding them but the issue is really not short term storage but seasonal storage, there are plenty of cheaper options for short term storage and both these plants are literally hours of capacity.
Its costs are about £105-150/MWH that is more expensive than batteries on economics and at the upper end similar to gas without its longer term advantages.
Tidal power is more reliable and with short term storage could be genuinely dispatchable but the problem is cost, the cheapest currently come in over £200/MWH and therefore simply not commercial.
Its about cost, there's plenty of different tech but do they solve a specific problem? Short term storage, ramping capability and peak lopping, base load or long term seasonal storage and are they cheapest in any of those classes? Neither of them are and are limited in many case by simple physics of the costs.
There already is a Norway interconnector. But certainly more and higher capacity interconnection will help, though it still means we are reliant on European electricity supply and demand not being in sync with ours. https://en.wikipedia.org/wiki/North_Sea_Link
Look at the Norway market its exports have been driving up domestic prices and that has become a significant political issues in Norway along with supplying Germany and ramping up power prices as Germany calls on everyone else to fill its wind droughts
No there isn't one directly from Scotland to Norway only from Northumberland. There are only a couple of high voltage lines to England which is where the main bottle neck is and they only seemed to be going at half capacity most of the time when I last looked. I'm not sure why that was. Most of the inter-connectors go from England. If Scotland could sell excess renewable power direct from Shetland and import hydro energy the other way this would help the balance and reduce constrained energy. Instead of which there is another inter-connector from Shetland to the Scottish mainland planned. There was an inter-connector planned from Scotland to Norway at one stage but I think the Norwegians pulled out. I think the lack of inter-connectors direct from Scotland is probably political. Meanwhile Scotland produces more energy than we consume but pays the highest electricity prices and can't get a lot of that energy out.
Hi Anne, Good comments, but don't forget sea surface wave power such as that of Orbital Marine that has been supplying Shetland for more than 10 years and is less costly to maintain than sea bed equipment.
Thanks for this post Chris which all makes perfect sense.
One opportunity that I feel has been very much under-explored is a cultural shift from seeing people as consumers to seeing them as citizens. The key difference is in the sense of agency and involvement: consumers expect things to be done *for* them whereas people with a citizen mindset expect things to be done *with* them. What I'm alluding to is the potential to enrol citizens to a far greater degree in using less energy overall but more of it when it's plentiful and less when it's scarce. Octopus have done this to some extent but there's lots more that could be done. Public service broadcasting could play an important role with weather forecasts that include information such as:
“There will be high winds and bright sunshine at the weekend so it will be a good time to heat your hot water tank, bake some bread, charge up your car or sand that floor you’ve been planning to do.”
“The cloudy and low wind conditions means that there won’t be much renewable energy available later today so if you can switch off as much stuff as possible between 4pm to 7pm you’ll be doing your bit to help bring down energy costs for everyone in the long run”
Hello Michael. I'm sure you are right that demand will become much more flexible. We are getting increasingly obvious price signals and home batteries are making it easier to reduce grid demand at expensive times. However I don't think this will help much in the face of week-long gales followed by still fortnights. Nevertheless, demand management is surely going to play a much larger role.
Thanks Chris. I agree with you about still fortnights and the benefits of synthetic fuels. Further down the line timewise, would greater HVDC interconnectivity between European nations (and even one or two North African ones) be enough to address the still fortnight problem?
Sadly I think you missed the actual problem. The issue is not really curtailment although that is a problem, the real question is a long UK blocking high of a week or more, and about once a decade about 3 weeks long with virtually no solar and virtually no wind.
Typical winter peaks would be about 50GW previously, more EV's and heat pumps would move that up to 55 to 60GW.
So the question becomes what is going to meet a day low/high of say 35 to 60GW when there is no wind or solar for three weeks?
You mentioned Hydrogen, but that would have to be from green energy, which is about 25% efficient from wind/solar farm, transmission losses, conversion to hydrogen, storage losses and then burnt in a gas fired power station.
If renewables is at recent AR7 prices of about £93/MWH that would make the cost of that generation about £370/MWH, or about three times natural gas prices and that's before infrastructure costs for the electrolysis, storage and distribution networks.
Therefore you have missed the real problem, what are we going to do without gas fired power stations when we have a blocking high and what is the cost of keeping an entire fleet of gas fired power stations shut down most of the year but available?
Renewables means having two entire sets of generating assets and you merely swap curtailment costs for the costs of keeping and entire fleet of back up generation going aren't you?
All that has to be paid for by consumers so bills will just keep going up.
Equally, if you are producing hydrogen that will be taking your excess renewables so what are your batteries going to store if the excess is no longer available?
Thank you for the comment. I have just tried to reply to a note you wrote on a more recent Substack post and some of my responses here will be similar.
First of all, I don't think we will see as large a rise in peak demand as we might imagine. Suppliers and customers are getting better and better at only using electricity at times of daily abundance. With any luck, we'll move quickly to systems which, for example, make it much more expensive to charge cars in the peak 16.00-19.00 period and switch instead to 02.00 to 05.00.
We will see long periods of perhaps three weeks of limited wind and sun. At that time we will need a backup source. As I said in my other response, I think hydrogen seems to be the only feasible candidate for this. Yes, there are inefficiencies. Even SOEC electrolysers will probably only offer 80+% round trip efficiency and gas turbine conversion of that hydrogen may just reach 60%, implying a total conversion value of no more than 50%. But if we are using as our input electricity that has no other use, that is in periods of high wind or sun, then the cost is not overwhelming.
I see batteries dealing with short and medium storage requirements of up to a few days as most. Beyond that I suspect hydrogen will be a more appropriate choice of storage medium.
Where I suspect we differ is that I want the UK to move to a renewables (and nuclear if available) low carbon electricity system two or three times the size of today's output. I believe it is overwhelmingly important that the world decarbonises as fast as possible, even if this means higher short-term electricity prices.
Hi Chris thanks for your reply. I don't know how much experience you have in the electricity industry but I have 35 years at the sharp end.
Yes you can use demand management for the likes of EV's but then there are heat pumps which are large demands when temperatures plummet in a blocking high.
I have spent the last 3 days extensively quizzing AI in chat GPT and Microsoft copilot on managing this type of blocking high, estimates of weather over the last 30 years, what the likely peaks would be and using demand management.
The cycle of using electrolysis to hydrogen storage to burning in a converted gas fired power station assuming wind only at the average AR7 price of £90/MWH blended for onshore and offshore gives a hydrogen generation price at between £350 to £450/MWH without the costs of the infrastructure (pipes, storage system, distribution system) just the cycle efficiency.
On top of that, storage would have to be in salt caverns, when I investigated the likely locations for these they were all remote from gas fired power stations meaning huge pipeline networks to supply that hydrogen.
Then there is another problem, hydrogen burning would cause metal entitlement shorting the lives of these gas stations, hydrogen burns about 200-300C higher temperatures which has two effects, its seriously shortens their life and increases shutdown maintenance periods and maintenance expenses considerably.
Worse again, due to the higher temperatures they cannot be ramped up and down anywhere near as fast, that effectively removes those converted from peak lopping and rapid ramping duty to base load generation with minimal load adjustment capability.
There were a number of other problems but suffice to say that the conclusions of both AI models were that:-
1) Hydrogen would be at least twice the price of natural gas generation
2) Would seriously shorten their lives and make them more susceptible to breakdown.
3) Remove converted plants from essential peak lopping duty so you'd need another fast response generation source.
4) There is "NO WAY" that its an economic or viable solution to a winter blocking high of any length.
I suggest that you try this with an AI model.
There are more problems, electrolysis would require constant supply as running at reduced output damages the cells increasing replacement costs, if you run then constantly then you need to plan in a significant excess of renewables for that purpose and that is either deliberate excess or at times it would need to be kept going with either biomass, nuclear or gas when there wasn't enough increasing the cost.
In short it is neither an economic nor engineering answer and both models concluded that NESO's plans on hydrogen were a fantasy.
Here's it headline result it came back with
Core takeaway
NESO will design where hydrogen is produced, how it is transported, and where it is stored, creating a coordinated national hydrogen network. The UK’s target is 10 GW of low‑carbon hydrogen production by 2030, with NESO planning the pipelines and storage needed to support it.
1. Electricity input cost
Strike price (AR7 offshore wind): ~£91–93/MWh in 2024 prices
Headline takeaway
Hydrogen does shorten component life and does increase O&M costs — but how much depends on the blend:
50% H₂: noticeable increase in wear, inspection frequency, and part replacement
100% H₂: major redesign required; O&M costs rise sharply unless the turbine is purpose‑built
Headline result
Hydrogen‑fired CCGT electricity is £200–£350/MWh more expensive than natural‑gas CCGT once you include:
Higher fuel cost (H₂ at £6–7/kg → £330–390/MWh electricity)
Higher O&M cost (50–100% uplift)
Shorter component life (20–50% reduction in hot‑gas‑path life)
More frequent inspections (40–60% shorter intervals)
Natural‑gas CCGT typically produces electricity for £110–150/MWh.
Hydrogen CCGT ends up around £330–450/MWh.
You can see that gas is half the price of hydrogen AND has the twin benefits of being both available for normal peak lopping duty AND running continuously at high load during a prolonged winter blocking high.
What about flow batteries for electricity storage? They have almost unlimited working lives as their electrodes don't take part in the chemistry of the storage process, eg Invinity uses the 4 valences of Vanadium to store and retrieve energy. Lithium and Sodium batteries degrade over time because their electrodes are part of the storage/release process.
Hello David, one of the two other technologies chosen was a vanadium flow battery. Much smaller in scale than the batteries and pumped hydro but an important pioneer. Personally, I'd guess that vanadium (not a cheap metal!) will also struggle to compete with lithium and, eventually, sodium.
Is there any planning by NESO or DESNEZ as to how much frequency support storage we need, which is all this expansion can do.
Is there any control to ensure this storage will be supplied only by wind or solar, as otherwise much of it's supply will be from gas fired power stations, in which case you might as well use the more efficient gas generation directly.
I suspect there is little critical assessment made as to how much and where this expansion is built. Much like the irrational expansion of solar.
Hello Iain. I think many short duration batteries will become capable of 'grid forming' and frequency support, meaning that they will be able to keep the system running in the event of unexpected power losses. This is being actively encouraged by NESO and Ofgem.
A few things to add - bearing in mind that I am an outsider (Australia) looking in.
* I suspect these would mitigate a bit more than 40% of the curtailment, but call it 40% to be conservative. 7.5bn in costs (once) 1.5bn*0.4 in savings every year. A simple payback time of ~12 years. If we discount future savings (3.5% per Treasury green book method) payback time inflates to ~30 years. Unclear how that 7.5bn figure breaks down between the projects but doubtless the pumped hydro is more expensive than the battery - of course it is much longer lived (80+ years easily) and both batteries and pumped hydro have very little marginal cost. (Pumped hydro generally needs a fairly big refurb every 40 or so years). So eyeballing it, the projects make economic sense on this basis alone, but it’s a bit of a toss up.
* why it strikes me that this is actually an excellent initiative is that avoided curtailment is not the only savings to be had. Every hour that Scottish pumped hydro is setting the price, gas isn’t. As I said, I’m an outsider looking in and don’t have all the data in front of me. But if it’s a toss up from part A, this seals the deal easily. It’s possible (even probable) that the savings from avoided gas generation are much larger than the savings from avoided wind curtailment.
* This is a big win for the British electricity consumer
Hello Harry, I didn't talk about the support scheme in the note. The 16 projects will all get 'cap and floor' treatment, meaning they are guaranteed to earn a minimum return but excess remuneration will be taxed. This seems intelligent to me. Looking at the numbers, I didn't immediately think the return to society was highly attractive, but we really don't have much choice.
There’s a piece missing, you are costing walking off gas as a zero cost option if not a benefit, yes it is carbon wise but you have to remember hydro is storage not generation.
Your gains work until they don’t. That’s because if gas runs so little its uneconomic which leaves two options
1) Shut down and decommission gas power stations
2) The government has to nationalise it and keep it operational but shut down at huge costs which will be passed to consumers in bills or taxes as a result.
What you have not considered is that gas capacity is about 35GW, UK demand is usually 30-40 GW but if you get a winter blocking high when wind and solar are near zero and can last from a few days to three weeks (Feb 2010 a classic case) demand could soar to 55-60GW.
Without gas you might have say 2- 5GW of wind, 10GW of Nuclear, 6GW of biomass and some batteries and at most 10GW of interconnectors which you cannot count on (They may be suffering too) so what is going to meet that demand peak?
You’d be well short of that peak, fine if it only lasts a day or two, possibly manageable, if it lasts a week or more your hydro and batteries will run out
Therefore until you work out in detail how you would meet say average energy consumption of say 45GW a day with peaks at 55-60GW, day after day for a couple of weeks without major gas capacity.
That is what’s missed here, not managing normal day to day but the extremes that come along frequently enough.
There's a bigger question. That yes you can walk gas off the grid, there's about 40GW of gas capacity. The more you walk it off the grid the more expensive it becomes because its fixed costs grow per MWh produced which will raise prices substantially when its needed.
The big question is a winter blocking high that last say a week or more (not uncommon) and if you have made gas uneconomic you have two choices, either pay for it to sit idle with capacity payments (the alter ego of curtailment) or decommission them completely.
The problem is that if you have a blocking high for more than a few days you'll run out of battery storage and pumped hydro and then what is going to supply peak demand because its freezing most of the time and demand soars while solar and wind would be minimal.
That's the real question and no one yet on the renewables side has an answer to that do they? (well not a genuinely economic one)
You don't mention liquid air long duration storage. https://highviewpower.com/projects/ The Manchester one is under construction and the Hunterston one due to be in operation in 2027
Also tidal power could provide more stable supply. Meygen has consent for up to 398MW and has built 2 phases so far. It's frustrating there are not more such projects as it seems to be working OK https://tethys.pnnl.gov/project-sites/meygen-tidal-energy-project. An interconnector to Norway as was proposed some years ago would enable access to their hydro. Conventional hydro can be ramped up to cover peak demand. Also demand management could reduce peaks. The Octopus tariffs for home solar and battery are interesting. If they and other companies developed this for business, this could really help manage supply and demand. Finally if Hyperscale data centres are allowed to be built, they will really throw the idea of a gradual increase in demand out of the water. The proposals for Scotland alone would have the power requirements of Glagow and Edinburgh combined and this power requirement is continuous, though AI isn't making any money and they could end up as white elephants if built. https://aprs.scot/resources/all-about-hyperscale-data-centres/
Hello Anne, no sign of liquid air in the Ofgem list. I suspect that the technology may be too expensive to compete. I remember giving a talk about Highview a decade ago to a bunch of engineers. At the end they came up to me and told me that the engineering was simply too complex to compete with batteries. They may be wrong but Highview's progress has been very slow compared to the explosion in short duration batteries.
They're building the Manchester one and the Hunterston one next year is using the existing grid from the shut down nuclear power station, which makes a lot of sense. Fairly small scale at the moment, but it makes much more sense than putting all their eggs in one basket. There are a couple of other liquid air storage sites which have been going a long time. I think the problem is mainly finance for a technology which is not widely known about. Maybe keep mentioning it! Same with wave and tidal. Not mentioned much, therefore hard to get finance. Bit of a vicious circle.
Look at the auction rounds, you'll find wave and tidal are way too expensive coming in well north of £200/MWH when prices are more regularly between 0 and about 130/MWH as a general base and peak prices, its not competitive and they have been trying to make commercial since the 1970's.
Anne,
When you look at these projects, I'm not sure who is funding them but the issue is really not short term storage but seasonal storage, there are plenty of cheaper options for short term storage and both these plants are literally hours of capacity.
Its costs are about £105-150/MWH that is more expensive than batteries on economics and at the upper end similar to gas without its longer term advantages.
Tidal power is more reliable and with short term storage could be genuinely dispatchable but the problem is cost, the cheapest currently come in over £200/MWH and therefore simply not commercial.
Its about cost, there's plenty of different tech but do they solve a specific problem? Short term storage, ramping capability and peak lopping, base load or long term seasonal storage and are they cheapest in any of those classes? Neither of them are and are limited in many case by simple physics of the costs.
There already is a Norway interconnector. But certainly more and higher capacity interconnection will help, though it still means we are reliant on European electricity supply and demand not being in sync with ours. https://en.wikipedia.org/wiki/North_Sea_Link
Look at the Norway market its exports have been driving up domestic prices and that has become a significant political issues in Norway along with supplying Germany and ramping up power prices as Germany calls on everyone else to fill its wind droughts
No there isn't one directly from Scotland to Norway only from Northumberland. There are only a couple of high voltage lines to England which is where the main bottle neck is and they only seemed to be going at half capacity most of the time when I last looked. I'm not sure why that was. Most of the inter-connectors go from England. If Scotland could sell excess renewable power direct from Shetland and import hydro energy the other way this would help the balance and reduce constrained energy. Instead of which there is another inter-connector from Shetland to the Scottish mainland planned. There was an inter-connector planned from Scotland to Norway at one stage but I think the Norwegians pulled out. I think the lack of inter-connectors direct from Scotland is probably political. Meanwhile Scotland produces more energy than we consume but pays the highest electricity prices and can't get a lot of that energy out.
Hi Anne, Good comments, but don't forget sea surface wave power such as that of Orbital Marine that has been supplying Shetland for more than 10 years and is less costly to maintain than sea bed equipment.
Thanks for this post Chris which all makes perfect sense.
One opportunity that I feel has been very much under-explored is a cultural shift from seeing people as consumers to seeing them as citizens. The key difference is in the sense of agency and involvement: consumers expect things to be done *for* them whereas people with a citizen mindset expect things to be done *with* them. What I'm alluding to is the potential to enrol citizens to a far greater degree in using less energy overall but more of it when it's plentiful and less when it's scarce. Octopus have done this to some extent but there's lots more that could be done. Public service broadcasting could play an important role with weather forecasts that include information such as:
“There will be high winds and bright sunshine at the weekend so it will be a good time to heat your hot water tank, bake some bread, charge up your car or sand that floor you’ve been planning to do.”
“The cloudy and low wind conditions means that there won’t be much renewable energy available later today so if you can switch off as much stuff as possible between 4pm to 7pm you’ll be doing your bit to help bring down energy costs for everyone in the long run”
Hello Michael. I'm sure you are right that demand will become much more flexible. We are getting increasingly obvious price signals and home batteries are making it easier to reduce grid demand at expensive times. However I don't think this will help much in the face of week-long gales followed by still fortnights. Nevertheless, demand management is surely going to play a much larger role.
Thanks Chris. I agree with you about still fortnights and the benefits of synthetic fuels. Further down the line timewise, would greater HVDC interconnectivity between European nations (and even one or two North African ones) be enough to address the still fortnight problem?
Sadly I think you missed the actual problem. The issue is not really curtailment although that is a problem, the real question is a long UK blocking high of a week or more, and about once a decade about 3 weeks long with virtually no solar and virtually no wind.
Typical winter peaks would be about 50GW previously, more EV's and heat pumps would move that up to 55 to 60GW.
So the question becomes what is going to meet a day low/high of say 35 to 60GW when there is no wind or solar for three weeks?
You mentioned Hydrogen, but that would have to be from green energy, which is about 25% efficient from wind/solar farm, transmission losses, conversion to hydrogen, storage losses and then burnt in a gas fired power station.
If renewables is at recent AR7 prices of about £93/MWH that would make the cost of that generation about £370/MWH, or about three times natural gas prices and that's before infrastructure costs for the electrolysis, storage and distribution networks.
Therefore you have missed the real problem, what are we going to do without gas fired power stations when we have a blocking high and what is the cost of keeping an entire fleet of gas fired power stations shut down most of the year but available?
Renewables means having two entire sets of generating assets and you merely swap curtailment costs for the costs of keeping and entire fleet of back up generation going aren't you?
All that has to be paid for by consumers so bills will just keep going up.
Equally, if you are producing hydrogen that will be taking your excess renewables so what are your batteries going to store if the excess is no longer available?
Hello NuclearBadger,
Thank you for the comment. I have just tried to reply to a note you wrote on a more recent Substack post and some of my responses here will be similar.
First of all, I don't think we will see as large a rise in peak demand as we might imagine. Suppliers and customers are getting better and better at only using electricity at times of daily abundance. With any luck, we'll move quickly to systems which, for example, make it much more expensive to charge cars in the peak 16.00-19.00 period and switch instead to 02.00 to 05.00.
We will see long periods of perhaps three weeks of limited wind and sun. At that time we will need a backup source. As I said in my other response, I think hydrogen seems to be the only feasible candidate for this. Yes, there are inefficiencies. Even SOEC electrolysers will probably only offer 80+% round trip efficiency and gas turbine conversion of that hydrogen may just reach 60%, implying a total conversion value of no more than 50%. But if we are using as our input electricity that has no other use, that is in periods of high wind or sun, then the cost is not overwhelming.
I see batteries dealing with short and medium storage requirements of up to a few days as most. Beyond that I suspect hydrogen will be a more appropriate choice of storage medium.
Where I suspect we differ is that I want the UK to move to a renewables (and nuclear if available) low carbon electricity system two or three times the size of today's output. I believe it is overwhelmingly important that the world decarbonises as fast as possible, even if this means higher short-term electricity prices.
Hi Chris thanks for your reply. I don't know how much experience you have in the electricity industry but I have 35 years at the sharp end.
Yes you can use demand management for the likes of EV's but then there are heat pumps which are large demands when temperatures plummet in a blocking high.
I have spent the last 3 days extensively quizzing AI in chat GPT and Microsoft copilot on managing this type of blocking high, estimates of weather over the last 30 years, what the likely peaks would be and using demand management.
The cycle of using electrolysis to hydrogen storage to burning in a converted gas fired power station assuming wind only at the average AR7 price of £90/MWH blended for onshore and offshore gives a hydrogen generation price at between £350 to £450/MWH without the costs of the infrastructure (pipes, storage system, distribution system) just the cycle efficiency.
On top of that, storage would have to be in salt caverns, when I investigated the likely locations for these they were all remote from gas fired power stations meaning huge pipeline networks to supply that hydrogen.
Then there is another problem, hydrogen burning would cause metal entitlement shorting the lives of these gas stations, hydrogen burns about 200-300C higher temperatures which has two effects, its seriously shortens their life and increases shutdown maintenance periods and maintenance expenses considerably.
Worse again, due to the higher temperatures they cannot be ramped up and down anywhere near as fast, that effectively removes those converted from peak lopping and rapid ramping duty to base load generation with minimal load adjustment capability.
There were a number of other problems but suffice to say that the conclusions of both AI models were that:-
1) Hydrogen would be at least twice the price of natural gas generation
2) Would seriously shorten their lives and make them more susceptible to breakdown.
3) Remove converted plants from essential peak lopping duty so you'd need another fast response generation source.
4) There is "NO WAY" that its an economic or viable solution to a winter blocking high of any length.
I suggest that you try this with an AI model.
There are more problems, electrolysis would require constant supply as running at reduced output damages the cells increasing replacement costs, if you run then constantly then you need to plan in a significant excess of renewables for that purpose and that is either deliberate excess or at times it would need to be kept going with either biomass, nuclear or gas when there wasn't enough increasing the cost.
In short it is neither an economic nor engineering answer and both models concluded that NESO's plans on hydrogen were a fantasy.
Here's it headline result it came back with
Core takeaway
NESO will design where hydrogen is produced, how it is transported, and where it is stored, creating a coordinated national hydrogen network. The UK’s target is 10 GW of low‑carbon hydrogen production by 2030, with NESO planning the pipelines and storage needed to support it.
1. Electricity input cost
Strike price (AR7 offshore wind): ~£91–93/MWh in 2024 prices
Headline takeaway
Hydrogen does shorten component life and does increase O&M costs — but how much depends on the blend:
50% H₂: noticeable increase in wear, inspection frequency, and part replacement
100% H₂: major redesign required; O&M costs rise sharply unless the turbine is purpose‑built
Headline result
Hydrogen‑fired CCGT electricity is £200–£350/MWh more expensive than natural‑gas CCGT once you include:
Higher fuel cost (H₂ at £6–7/kg → £330–390/MWh electricity)
Higher O&M cost (50–100% uplift)
Shorter component life (20–50% reduction in hot‑gas‑path life)
More frequent inspections (40–60% shorter intervals)
Natural‑gas CCGT typically produces electricity for £110–150/MWh.
Hydrogen CCGT ends up around £330–450/MWh.
You can see that gas is half the price of hydrogen AND has the twin benefits of being both available for normal peak lopping duty AND running continuously at high load during a prolonged winter blocking high.
In short hydrogen is a pipe dream
High Chris,
Vanadium is a relatively abundant element, more than Lithium, something like 22nd in the league table. I think China has a lot of it
David
Hi Chris,
What about flow batteries for electricity storage? They have almost unlimited working lives as their electrodes don't take part in the chemistry of the storage process, eg Invinity uses the 4 valences of Vanadium to store and retrieve energy. Lithium and Sodium batteries degrade over time because their electrodes are part of the storage/release process.
Hello David, one of the two other technologies chosen was a vanadium flow battery. Much smaller in scale than the batteries and pumped hydro but an important pioneer. Personally, I'd guess that vanadium (not a cheap metal!) will also struggle to compete with lithium and, eventually, sodium.
Is there any planning by NESO or DESNEZ as to how much frequency support storage we need, which is all this expansion can do.
Is there any control to ensure this storage will be supplied only by wind or solar, as otherwise much of it's supply will be from gas fired power stations, in which case you might as well use the more efficient gas generation directly.
I suspect there is little critical assessment made as to how much and where this expansion is built. Much like the irrational expansion of solar.
Hello Iain. I think many short duration batteries will become capable of 'grid forming' and frequency support, meaning that they will be able to keep the system running in the event of unexpected power losses. This is being actively encouraged by NESO and Ofgem.
I think that's what they are doing at the moment. Due to be published soon I think. https://www.neso.energy/what-we-do/strategic-planning/strategic-spatial-energy-planning-ssep. Not sure they have really taken note of the 'primary energy fallacy', https://www.youtube.com/watch?v=qokwulKU9Bg which means we might not need so much extra until AI comes along and potentially gobbles up huge amounts of energy.
Unclear whether you think this is cheap or not!
A few things to add - bearing in mind that I am an outsider (Australia) looking in.
* I suspect these would mitigate a bit more than 40% of the curtailment, but call it 40% to be conservative. 7.5bn in costs (once) 1.5bn*0.4 in savings every year. A simple payback time of ~12 years. If we discount future savings (3.5% per Treasury green book method) payback time inflates to ~30 years. Unclear how that 7.5bn figure breaks down between the projects but doubtless the pumped hydro is more expensive than the battery - of course it is much longer lived (80+ years easily) and both batteries and pumped hydro have very little marginal cost. (Pumped hydro generally needs a fairly big refurb every 40 or so years). So eyeballing it, the projects make economic sense on this basis alone, but it’s a bit of a toss up.
* why it strikes me that this is actually an excellent initiative is that avoided curtailment is not the only savings to be had. Every hour that Scottish pumped hydro is setting the price, gas isn’t. As I said, I’m an outsider looking in and don’t have all the data in front of me. But if it’s a toss up from part A, this seals the deal easily. It’s possible (even probable) that the savings from avoided gas generation are much larger than the savings from avoided wind curtailment.
* This is a big win for the British electricity consumer
Hello Harry, I didn't talk about the support scheme in the note. The 16 projects will all get 'cap and floor' treatment, meaning they are guaranteed to earn a minimum return but excess remuneration will be taxed. This seems intelligent to me. Looking at the numbers, I didn't immediately think the return to society was highly attractive, but we really don't have much choice.
There’s a piece missing, you are costing walking off gas as a zero cost option if not a benefit, yes it is carbon wise but you have to remember hydro is storage not generation.
Your gains work until they don’t. That’s because if gas runs so little its uneconomic which leaves two options
1) Shut down and decommission gas power stations
2) The government has to nationalise it and keep it operational but shut down at huge costs which will be passed to consumers in bills or taxes as a result.
What you have not considered is that gas capacity is about 35GW, UK demand is usually 30-40 GW but if you get a winter blocking high when wind and solar are near zero and can last from a few days to three weeks (Feb 2010 a classic case) demand could soar to 55-60GW.
Without gas you might have say 2- 5GW of wind, 10GW of Nuclear, 6GW of biomass and some batteries and at most 10GW of interconnectors which you cannot count on (They may be suffering too) so what is going to meet that demand peak?
You’d be well short of that peak, fine if it only lasts a day or two, possibly manageable, if it lasts a week or more your hydro and batteries will run out
Therefore until you work out in detail how you would meet say average energy consumption of say 45GW a day with peaks at 55-60GW, day after day for a couple of weeks without major gas capacity.
That is what’s missed here, not managing normal day to day but the extremes that come along frequently enough.
There's a bigger question. That yes you can walk gas off the grid, there's about 40GW of gas capacity. The more you walk it off the grid the more expensive it becomes because its fixed costs grow per MWh produced which will raise prices substantially when its needed.
The big question is a winter blocking high that last say a week or more (not uncommon) and if you have made gas uneconomic you have two choices, either pay for it to sit idle with capacity payments (the alter ego of curtailment) or decommission them completely.
The problem is that if you have a blocking high for more than a few days you'll run out of battery storage and pumped hydro and then what is going to supply peak demand because its freezing most of the time and demand soars while solar and wind would be minimal.
That's the real question and no one yet on the renewables side has an answer to that do they? (well not a genuinely economic one)