Centrica Makes Case for Hydrogen Storage in UK Energy Sector
Key Ideas
- Centrica Plc advocates for hydrogen storage in the UK to reduce electricity bills by £1 billion yearly by 2050.
- The company highlights hydrogen's potential in offsetting renewable power generation fluctuations and decarbonizing heavy industry.
- The UK government's support for electric heat pumps is accelerating, alongside Centrica's push for hydrogen storage to meet net zero targets.
- Centrica seeks government backing and pricing models to facilitate the conversion of its Rough gas storage facility for methane and hydrogen use.
Centrica Plc, the owner of British Gas, has asserted that hydrogen storage can play a vital role in reducing electricity bills in the UK energy sector. They claim that large-scale hydrogen storage, like the Rough facility in the North Sea, could lead to savings of £1 billion annually by 2050, equivalent to £35 per household. This push for hydrogen coincides with the UK government's focus on electric heat pumps to lessen the reliance on natural gas. While hydrogen's contribution to decarbonizing heavy industry is debated in Europe due to infrastructure costs, Centrica believes it can help manage renewable power fluctuations.
CEO Chris O'Shea emphasized the importance of being technology-agnostic and highlighted the necessity of hydrogen in handling energy intermittency. However, for Centrica to proceed with the £2 billion redevelopment of its Rough facility, they require a pricing model that ensures economic viability. The company aims to convert the storage site to accommodate both methane and hydrogen.
Centrica's advocacy for hydrogen comes at a time when Ofgem is set to announce changes to the price cap that might impact UK household energy bills. The company is advocating for government support, including revenue guarantees, to facilitate the transition towards hydrogen storage. The report signals a strategic shift towards hydrogen in the UK's energy landscape, aligning with efforts to achieve net zero emissions and mitigate energy price fluctuations.