Curtailed wind generation could decarbonise UK steel: report

UK curtailed wind generation – wasted power due to transmission and distribution infrastructure not keeping pace with generation growth – could have produced over 118,000 tonnes of green hydrogen in 2022, rising to 455,000t by 2029. This would be enough to decarbonise the entirety of the UK’s 7 million tonnes/year steelmaking, points out UK think-tank Policy Exchange.

The growing instances of curtailment in the UK involve wind generators being instructed by the network operator to disconnect from the grid due to constraints on the power system – this is a costly problem, the organisation observes.

Since 2021, UK power system congestion has cost consumers over £2 billion ($2.5 billion), and in 2022 alone some £210 million of curtailment payments were made to renewable generators under contract. As the offshore wind fleet grows from 14GW today to the 50GW offshore wind target in 2030, the UK is on track for a fivefold increase in curtailment by 2030.

“By delivering regulatory reforms and introducing new commercial incentives, Westminster can leverage curtailed generation to accelerate development of a distributed electrolysis system,” Policy Exchange says in a report seen by Kallanish.

If the entire volume of curtailed wind generation was committed to hydrogen-fired DRI steel production, the UK’s 7m t/y of steelmaking could be decarbonised by 2026, the report states.

The 455,000t of annual green hydrogen production could also displace two-thirds of the 700,000 t/y of the UK’s current, carbon-intensive grey hydrogen consumption, and deliver two thirds of its electrolyser production capacity target for 2030.

To enable these opportunities, the government must first develop Constraint Management Plans (CMPs) and a tradeable credit market, creating roadmaps for market participants to enter into new arrangements to reduce their annual curtailment figures through partnerships with electrolysers, Policy Exchange says.

It should also reduce or waive system charges to improve the economics of driving investment into new constraint management assets. Other measures could be government backed off-take agreements for a period of 15 or more years, and a matchmaking initiative to pair hydrogen producers with prospective consumers, as is done in the US.

Adam Smith Poland