18 February 2020

Identifying a Route to Low-Cost, Zero Carbon Hydrogen at Gigawatt-Scale


Gigastack Phase 2 was publicly launched on 18th February 2020 to demonstrate the delivery of bulk, low-cost, zero carbon hydrogen in the UK to Gigawatt scale.

Gigastack Phase 2 was publicly launched on 18th February 2020 to demonstrate the delivery of bulk, low-cost, zero carbon hydrogen in the UK to Gigawatt scale. This project is built upon the foundations of Gigastack Phase 1. Funded by BEIS’ Low Carbon Hydrogen Supply Competition, the Gigastack Phase 1 feasibility study enabled ITM Power, Ørsted and Element Energy to demonstrate the potential for renewable hydrogen for the UK.

As a result of this project, the consortium delivered the following primary conclusions:

  • ITM Power has furthered the designs of its next generation of innovative stack technology. The new 5MW stack will enable the development of the 100MW electrolyser systems that are required to meet the UK’s legally binding net zero target by 2050. These installations will come at a fraction of today’s cost, with the installed electrolyser system costing less than £400/kW.
  • These stacks will benefit from cost reductions due to ITM Power’s new "Giga-Factory" at Bessemer Park, Sheffield. This will come about due to standardisation and industrialisation. As a result of the capacity modelling and machine analysis, the factory will manufacture 60 stacks per year from 2023 (300MW/yr), tending towards 200 stacks per year in the mid-2020s (1GW/yr).
  • The most significant contributor to the cost of renewable hydrogen is the cost of the electrical input. Work by Element Energy and Ørsted assessed siting the electrolyser in innovative locations and exploiting electrolyser-wind farm configurations to reduce these costs. Today, the cost of renewable hydrogen from grid-connected electrolysers is more than £8/kg. The pathways analysed here for the new 5MW electrolyser and power supply, without full exposure to grid fees, could deliver a produced renewable hydrogen relative cost saving of more than 50%. With further regulatory intervention, commercial optimisation, industrialisation and increased production volumes of electrolysers the results of the feasibility study show further potential cost reductions of up to 50% (scenario dependent).
  • Combined, the reduced stack cost, increased manufacturing capacity and the innovative technical configurations enabled the consortium to identify viable business cases for supplying hydrogen to industry and transport end-users. This is enabled through cost competitive renewable and high purity hydrogen at a range of scales, not possible for reformers with carbon capture and storage (CCS) due to the high purification costs and inflexibility in build capacity.
  • An analysis of the hydrogen demand from target markets for renewable hydrogen (i.e. industry, transport, hydrogen for heat) both nationally and internationally from 2020 to 2030 validates ITM Power’s proposal decision to ramp-up to a factory capacity of 1GW/yr over an accelerated time frame. In all scenarios considered, the hydrogen market deemed accessible to ITM Power’s new 5MW stack far exceeded their production rate of 1GW/yr from 2025. The High Ambition scenario even demonstrated that two additional factories of similar capacity would be required to satisfy the accessible demand by 2030.

The Public Report provides in greater detail the findings from this study and the need for renewable electrolytic hydrogen at scale in the UK.