Hydrogen for heat: Using underground hydrogen storage for seasonal energy shifting in northern climates

Abstract

To determine if a power-to-gas pilot-scale plant would be possible in Oregon, a feasibility study was conducted that assessed the technical, political, economic, environmental, safety, and policy aspects of a potential project in the region. The results of this study were submitted as part of Oregon State University – Cascades' entry to the Hydrogen Education Foundation's 2018 student design competition. The Pacific Northwest has a need for long term energy storage (seasonal energy shifting) due to seasonally available low-priced, low-carbon electricity. There appears to be the political motivation and the technical feasibility to install a demonstration-scale power-to-gas plant in the region to assess the technical and economic performance of the system when exposed to real-world boundary conditions. However, preliminary economic analyses show the system will be challenged by low capacity factor operation resulting in a levelized cost of hydrogen of $121.81/kgH2 when only using otherwise curtailed electricity, or $8.84/kgH2 when running continuously for 6 months per annum. To fund a pilot scale plant a renewable gas development surcharge of $0.18/therm is proposed as a way for willing customers to support the decarbonization mission. There is precedent within the utility for such an incentive, indicating that it would be approved by the utility commission and could be a viable path forward for a pilot-scale plant.