The Hydrogen Storage as a dry-year solution report found, when compared against a pumped hydro solution in Lake Onslow, New Zealand and overbuilding of renewables, hydrogen storage’s results proved it would achieve the lowest wholesale electricity prices and least price volatility

According to the report, hydrogen storage also has benefits such as phase developments, which can make the best use of existing assets and infrastructure, as well as supporting decarbonisation beyond the electricity system.

Firstgas Group which commissioned Energy Link for the study, has said it plans to inform the New Zealand Battery Project of its findings, which had selected hydrogen storage as one of the three non-hydro options for solving the ‘dry year’ problem.

The model was based on a New Zealand electricity system, in which fossil-fuelled generation was phased out and replaced with a large-scale expansion of wind and solar generation, complemented with smart ‘demand response.’

Based on three scenarios: pumped hydrogen and high-voltage direct current upgrades to existing infrastructure at Lake Onslow; overbuilding renewables capacity; and large-scale hydrogen storage, the report concluded that hydrogen storage has the lowest cost to consumer when considering construction and operating costs and resultant electricty prices.

Additionally it estimated, hydrogen storage is the most resilient in ‘supply of last resort (SLR)’ events because the storage is in the North Island, where most of the power demand is and it protects against outages of the high-voltage direct current (HVDC) connection.

Energy Link noted that all three options performed likewise in terms of minimal carbon emissions, due to the fact they all result in fully renewable electricity systems.






Due to the similar outcomes of sustainability, Firstgas suggest the New Zealand Battery project should factor the advantages of hydrogen identified through the study.

In March 2021 Firstgas embarked on ‘plan for decarbonisation of its gas pipeline network in New Zealand’ with the aim of blending hydrogen into the North Islands natural gas network from 2030 with conversion to 100% hydrogen by 2050.

Read more: New Zealand’s gas pipeline network to transition to 100% hydrogen by 2050

James Irvine, Firstgas Future Fuels General Manager, said, “Firstgas didn’t know what the outcome would be when we commissioned it (the study) but thought there was a case for hydrogen. The results were even more positive than we expected.

“The results now make stored hydrogen now the lead contender to provide ‘dry year’ capacity and provide security and affordability in a totally renewable system.

“We urge policymakers to approach renewables with an open mind. The nation cannot afford to be dogmatic about how we reach the 2050 goal,” Irvine concluded.

Other considerations of the study are that Energy Link only looked at the electricity system and excess hydrogen produced by the storage solution could be used for gas consumers, some of which cannot electrify.

Capital investment could also play a key part in the hydrogen storage solution model, spreading out costs, enabling benefits to be gained earlier and optimisation to be carried out along the way.

Looking ahead, there is the potential to optimise the locations and size of electrolysers, storage and generation, due to the model not being optimised.

Firstgas has said it will continue to undertake work to enable a range of options, such as a programme of trials to transport and supply consumers with hydrogen blends using existing gas pipelines.

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