Written Evidence Submitted by Sizewell C (HNZ0062)

Summary and Introduction

1. NNB GenCo (SZC) Limited proposes to construct a twin UK EPR nuclear power station at the Sizewell C (“SZC”) site near , . The company welcomes the opportunity to provide evidence to the Science and Technology Committee on how hydrogen, especially hydrogen produced from nuclear heat and electricity, can contribute to the decarbonisation of the UK economy.

2. Once constructed, SZC will generate vast amounts of low-carbon heat, which can be used for purposes additional to making electricity for the Grid:

o SZC intends to make some of this heat available for heat-assisted electrolysis (which is known to be more efficient than traditional electrolysis) and nuclear projects such as SZC can generate such low-carbon heat on a cost-effective basis.

o Also, as research has shown, continuous power makes best use of electrolysers. A nuclear power project such as SZC will be able to provide access to baseload ‘always on’ low-carbon electricity to drive forward hydrogen production.1

3. In the longer-term, we are looking to link a large-scale electrolyser to SZC, using heat tapped off the turbines to increase the efficiency of electrolysis:

o New nuclear projects such as SZC are uniquely positioned to use heat tapped off the turbines to increase the efficiency of electrolysis. Our experts currently estimate that SZC can make the conversion into hydrogen more productive and up to 10% cheaper than electricity-only processes because it can supply heat. Steam-assisted electrolysis is not an experimental technology but a technology that is available today (a 720kW system was installed last year in Germany).2

o SZC is in the right place – it is proximate to the Bacton terminal (which could become a major hydrogen reception / processing point), and it is close to ports such as , Harwich, and (which could be consumers of synthetic fuels, the base of which is hydrogen and captured carbon). Also, the electricity from some large offshore wind farms comes on shore near to SZC.

o The development of hydrogen production linked to nuclear offers even greater on-demand flexibility to a new nuclear power station and allows it to be a genuine ‘servant of the system’ (by being an integrated system of energy generation, storage and use, which can serve the system’s needs on an on-demand basis at any given point in time).

4. In the short-term – and to decarbonise the significant construction activities at SZC – the project is also considering a hydrogen demonstration project (the “Demonstrator Project”) potentially linked to the adjoining operational nuclear power station, Sizewell B (“SZB”). On 23 November 2020, an invitation to express interest in respect of the Demonstrator Project was issued:3

1 Simone Pascuzzi et al, Sustainability, Electrolyser Performance Analysis of an Integrated Hydrogen Power System for Greenhouse Heating: A Case Study (2016). 2 GrInHy2.0 project in Germany, launched in August 2020 with the delivery of the world’s largest high-temperature electrolyser – further details available at: https://www.green-industrial-hydrogen.com/project/news/sunfire-delivers-the-worlds-largest-high-temperatur- electrolyzer-to-salzgitter-flachstahl. 3 Sizewell C, Expression of Interest – Sizewell C Hydrogen Demonstrator Project (23 November 2020), available at: https://www.edfenergy.com/energy/nuclear-new-build-projects/sizewell-c/news-views/sizewell-c-seeks-partners-develop-hydrogen-and- direct-air-capture. o The Demonstrator Project will take the form of a smaller-scale electrolyser (c.2MW).

o In addition to decarbonising construction at SZC, the hydrogen produced from the Demonstrator Project could be used to potentially serve a number of other markets, such as rail, shipping, and port activities (and use of hydrogen refuelling facilities could be made available to local authorities4 and businesses).

o This will help to develop an early market for hydrogen in the local / regional area around Sizewell, providing a real opportunity to kickstart the hydrogen economy in the UK and help the providers of construction plant to leverage up the market.

5. To support low-carbon nuclear-generated hydrogen, new support mechanisms should support a range of low-carbon hydrogen production methods and take full account of the lifecycle carbon emissions of different approaches. Further, to maximise the opportunity to build the market in low carbon hydrogen, the scope of existing supporting mechanisms, in particular the Renewable Transport Fuels Obligation (“RTFO”), should be extended to nuclear-generated hydrogen as well. Also, the business model for new nuclear projects such as SZC is key to the economics of the hydrogen it will produce and we welcome the Government’s recent confirmation that it will enter into negotiations in relation to SZC.

6. In summary, we see hydrogen playing a key role in the future energy landscape, and nuclear energy playing a significant role in the generation of low-carbon hydrogen. Indeed, other countries such as the USA are increasingly exploring nuclear-generated hydrogen, and the Department of Energy recently awarded grants to develop nuclear-hydrogen demonstration projects.5 With support from Government, new nuclear projects such as SZC could play a significant role in delivering a hydrogen economy in the .

Commentary on specific topics raised by the Committee

1. The suitability of the Government’s announced plans for “Driving the Growth of Low-carbon Hydrogen”, including:

 the focus, scale and timescales of the proposed measures;  how the proposed measures—and any other recommended measures—could best be co-ordinated;  the dependency of the Government’s proposed plans on carbon capture and storage, any risks associated with this and how any risks should be mitigated; and  potential business models that could attract private investment and stimulate widespread adoption of hydrogen as a Net Zero fuel;

7. Nuclear-generated hydrogen can play a vital role in driving the growth of low-carbon hydrogen and supporting the Government’s target to achieve net zero by 2050. The recently announced Ten Point Plan included significant support for hydrogen, including (a) the adoption of a 5GW target for low- carbon hydrogen production capacity by 2030; and (b) the commitment of £240m of funding to support low-carbon hydrogen production.6

8. Nuclear energy could be used to drive forward hydrogen production to meet this target. For instance, in summer 2020, owing to the low national demand for electricity, National Grid entered into an arrangement to reduce output from the SZB nuclear power station. If hydrogen production had been

4 Annexed is a letter from Steve Gallant, Leader and Chair of the East Suffolk Community Partnership. 5 Office of Nuclear Energy, U.S. Department of Energy Announces $26.9 Million for Advanced Nuclear Technology (8 October 2020), available at: https://www.energy.gov/ne/articles/us-department-energy-announces-269-million-advanced-nuclear-technology. 6 HM Government, The Ten Point Plan for a Green Industrial Revolution (18 November 2020), page 10. linked to SZB, instead of reducing electricity output, this could have been diverted to hydrogen production instead.

9. Further, nuclear projects such as SZC will be able to further boost hydrogen production, using heat to make the production process more efficient. SZC welcomes Government’s recent announcements in the Energy White Paper7 and National Infrastructure Strategy8, recognising the role new nuclear can play in the future energy mix, alongside Government’s recent decision to enter into negotiations with SZC. We note that the economic deal for new nuclear will have a direct impact on the costs of hydrogen produced from new nuclear projects.

10. Of the funding commitment to support low-carbon hydrogen production, we believe a substantial proportion ought to be allocated to heat-based hydrogen production, such as the proposed project at SZC, because the production technology is more efficient, represents better value for money, and is based on technology which is already in place today.

11. We believe the scope of existing support mechanisms (such as the RTFO, the existing mechanism to support the use of low-carbon fuels for transport) ought to be extended to include nuclear-generated hydrogen as well. Further, new mechanisms for hydrogen support ought to take into account a range of low-carbon hydrogen production methods (including nuclear-generated hydrogen), taking full account of the lifecycle carbon emissions of different approaches.

2. The progress of recent and ongoing trials of hydrogen in the UK and abroad, and the next steps to most effectively build on this progress

12. There are already existing projects worldwide looking at heat-assisted hydrogen production. For instance, the GrInHy2.0 project in Germany is exploring the industrial operation of a high temperature electrolyser (this will be a 720kW system expected to produce at least 100 tonnes of green hydrogen by the end of 2022).9

13. Further, other countries such as the USA are increasingly exploring nuclear-generated hydrogen using steam-assisted processes, and the Department of Energy recently awarded grants to develop nuclear- hydrogen demonstration projects (a $12.5 million grant was awarded to Fuel Cell Energy Inc. and Idaho National Laboratory to look at integrating a solid oxide electrolysis cell (SOEC) project in a nuclear environment).10

14. There are ongoing trials across the United Kingdom for hydrogen-fuelled buses, cars, and trains. SZC could build on this experience and learning by offering a large-scale testing bed for further innovation, and by using hydrogen-fuelled buses, HGVs and construction equipment to decarbonise the construction of SZC.11 SZC is currently participating in a funded study (via Innovate UK) looking at transitioning from a diesel to a hydrogen fleet and has been in talks with local authorities to collaborate on this study.12

7 HM Government, Energy White Paper (14 December 2020), page 16. 8 HM Treasury, National Infrastructure Strategy (25 November 2020), page 52. 9 GrInHy2.0 project in Germany, launched in August 2020 with the delivery of the world’s largest high-temperature electrolyser – further details available at: https://www.green-industrial-hydrogen.com/project/news/sunfire-delivers-the-worlds-largest-high-temperatur- electrolyzer-to-salzgitter-flachstahl. 10 Office of Nuclear Energy, U.S. Department of Energy Announces $26.9 Million for Advanced Nuclear Technology (8 October 2020), available at: https://www.energy.gov/ne/articles/us-department-energy-announces-269-million-advanced-nuclear-technology. 11 To give an idea of scale, a 2MW electrolyser powered by electricity from SZB could refill on average per day: 16 buses, or 160 cars, or 4 trains. 12 Annexed is a letter from Steve Gallant, Leader and Chair of the East Suffolk Community Partnership. 15. H2Ports is a project in the Port of Valencia which is exploring potential decarbonisation opportunities (a reach stacker and yard tracker will be converted to run on hydrogen for 2 years).13 SZC is well positioned close to ports such as Felixstowe, Harwich, Ipswich and Lowestoft to provide hydrogen for synthetic fuels and other activities.

3. The engineering and commercial challenges associated with using hydrogen as a fuel, including production, storage, distribution and metrology, and how the Government could best address these

16. Nuclear power stations such as SZC can make traditional electrolysis-based hydrogen as cheap or cheaper than other available options:

o these are electricity-only processes, which require water in large quantities – nuclear power stations have access to large quantities of water for the electrolysis process; o nuclear power provides access to baseload ‘always on’ (low-carbon) electricity – research has shown continuous power causes less degradation to the electrolyser compared with variable sources of electricity;14 and o electricity used to generate hydrogen will not need to take up room on the national transmission grid.

17. SZC is uniquely positioned to use heat tapped off the turbines to increase the efficiency of electrolysis, which would further increase the economic viability of the process. Our experts currently estimate that SZC can make the conversion into hydrogen more productive and up to 10% cheaper than electricity-only processes because it can supply heat. As mentioned above, steam-assisted electrolysis is not an experimental technology but a technology that is available today.

18. In a nuclear power station, around 60% of the heat produced by the nuclear process is unutilised. By placing an extra valve that allows high temperature steam to be tapped from the turbine, SZC can extract the heat required for electrolysis and it is currently assessing the placement of the valve (to optimise application, whilst not affecting the nuclear safety case).

19. Hydrogen is difficult to transport long distances, owing to the lack of pipe networks that are compatible with the size of hydrogen particles. Given the location of SZC though, hydrogen produced from the project can serve nearby clusters of businesses and ports, including the Bacton terminal (which could become a major hydrogen reception / processing point) and ports including Felixstowe, Harwich, Ipswich, and Lowestoft (thereby, reducing this challenge).

20. In summary, though there are challenges on the generation and supply side in relation to hydrogen production, nuclear projects such as SZC can effectively meet some of these challenges. So, in order to achieve Government’s hydrogen ambitions, it is very important that proper support mechanisms (as referred to above) are in place for nuclear-generated hydrogen.

4. The infrastructure that hydrogen as a Net Zero fuel will require in the short- and longer-term, and any associated risks and opportunities;

21. There is a significant amount of interest in the production of low-carbon hydrogen and recognition that hydrogen will be a key vector in decarbonising the UK. However, the hydrogen economy has not yet been substantially kickstarted and there are a variety of options for how the required hydrogen infrastructure (production, storage, and distribution) will evolve.

13 Fuel Cells and Hydrogen Joint Undertaking, H2 Ports, further information available at: https://h2ports.eu/. 14 MDPI: Sustainability, Electrolyser Performance Analysis of an Integrated Hydrogen Power System for Greenhouse Heating: A Case Study (5 July 2016), page 11. 22. If a large-scale project such as SZC were to become involved in hydrogen production, there would be a real opportunity to kickstart the UK hydrogen economy and catalyse the deployment of hydrogen infrastructure. Also, SZC is in the right place for co-locating hydrogen infrastructure – it is proximate to the Bacton terminal (which could become a major hydrogen reception / processing point), and it is close to ports such as Felixstowe, Harwich, Ipswich and Lowestoft (which could be consumers of synthetic fuels, the base of which is hydrogen and carbon). Also, the electricity from some large offshore wind farms comes on shore near to SZC.

23. In the short-term, there will be a key role for Government and regulators in supporting a range of trials and approaches to hydrogen (as mentioned above, SZC is participating in a funded study looking at transitioning from a diesel to a hydrogen fleet). In the long-term, locating hydrogen production at the SZC Energy Hub, close to industrial and heavy-duty transport sectors, is a significant opportunity to deliver net zero for many. To give an idea of scale, our experts have advised that, dedicated to hydrogen production, SZC could alone replace current total UK hydrogen production using high temperature steam electrolysis.

5. Cost-benefit analysis of using hydrogen to meet Net Zero as well as the potential environmental impact of technologies required for its widespread use; and

24. The Committee on Climate Change has said that we will need to develop new and innovative low- carbon technologies, such as hydrogen, to reach the UK’s net zero target. In addition to the environmental need for hydrogen, there are also significant socio-economic benefits to developing the market for hydrogen. CBI estimates that across the UK economy, hydrogen could unlock £18 billion in gross value added (GVA) by 2035 and support 75,000 additional jobs.15

25. Electrolysis is the traditional method of hydrogen production and requires a supply of electricity and water. Nuclear power stations, such as SZC, are well placed to produce hydrogen via electrolysis cost competitively due to their ability to provide (i) a continuous supply of electricity, (ii) a supply of electricity that is local to the electrolyser, and (iii) access to large quantities of water.

26. Hydrogen can also be produced via steam electrolysis, using heat and electricity, and this method of producing low-carbon hydrogen has the potential to be more efficient than traditional electrolysis. At SZC we are looking to use heat tapped off from the turbines via a valve, to increase the efficiency of electrolysis.

o Inserting a valve to tap off heat has already been achieved at the Civaux nuclear facility in France, and indeed heat from nuclear power stations is used for applications such as district heating in other parts of the world.16

o Steam electrolysis based on Solid oxide electrolyser cell (SOEC) is not a future experimental technology but is available today (a 720 kW system was installed last year in Germany).17

27. The economic deal for new nuclear can benefit the economics of future hydrogen production linked to a nuclear power station. For example, the cost of electricity and heat produced by the SZC nuclear

15 Hydrogen Taskforce, Economic Impact Assessment (12 August 2020), page 2, available at: https://www.hydrogentaskforce.co.uk/wp- content/uploads/2020/08/6-EIA-report.pdf 16 World Nuclear News, Haying begins commercial-scale district heat supply (20 November 2020), available at: https://www.world-nuclear- news.org/Articles/Haiyang-begins-commercial-scale-district-heat-supp; and IAEA Bulletin, 3/1989, Nuclear district heating in CMEA countries, pages 46-49. 17 GrInHy2.0 project in Germany, launched in August 2020 with the delivery of the world’s largest high-temperature electrolyser – further details available at: https://www.green-industrial-hydrogen.com/project/news/sunfire-delivers-the-worlds-largest-high-temperatur- electrolyzer-to-salzgitter-flachstahl. power station would impact the cost of hydrogen produced. As a next-of-a-kind nuclear power project, SZC has a reduced risk profile which provides an opportunity to reduce the cost of finance (via a robust investable model) and SZC welcomes Government’s recent decision to enter discussions with SZC on such a financing model.

28. Nuclear power stations, such as the UK EPRs, already have a level of built-in flexibility. However, the development of hydrogen production linked to nuclear offers even greater on-demand flexibility and allows the nuclear power station to be a genuine ‘servant of the system’ (by being an integrated system of energy generation, storage and use, the SZC Energy Hub can serve the system’s needs on an on-demand basis at any given point in time).

6. The relative advantages and disadvantages of hydrogen compared to other low-carbon options (such as electrification or heat networks), the applications for which hydrogen should be prioritised and why, and how any uncertainty in the optimal technology should be managed.

29. Hydrogen is considered to be very important to achieve net zero because it can play a role in decarbonising a number of sectors, including those sectors which will be most difficult to decarbonise such as transport, heating and industry. Further, hydrogen is a base component of syngas (we at SZC

are also exploring direct air capture to capture CO2 – this can then be reduced to CO which is the other main component) which can then be used to form zero carbon fuels.

30. In the near-term, the SZC Demonstrator Project is exploring the following applications of hydrogen produced:

o Decarbonising SZC construction – SZC can provide a large-scale testing bed for the use of hydrogen-powered HGVs, buses, and plant equipment. This will provide a potential route (alongside use of electric vehicles) to reducing use of diesel in construction and can serve as a marker for other similar infrastructure projects.

o Local transport – hydrogen refuelling infrastructure could be made available to council vehicles, and in due course to other local businesses aiming to run hydrogen fuelled vehicles. SZC is the focus of an Innovate UK funded project, called Hy4Fleets, to carry out a study on transitioning from a diesel to a hydrogen fleet, and we are working with East Suffolk Council on this topic as well.18

31. In the longer term, a scaled-up hydrogen electrolyser linked to SZC could provide the following additional advantages:

o Jet Zero fuels – the process starts with syngas (CO and H2). Captured CO2 can effectively be

reduced to CO in a co-electrolysis reaction along with steam (H2O to H2). An interest in zero- emissions fuels makes the case for steam electrolysis (which SZC can effectively generate) stronger; and

o Potential linkages – SZC is near the Bacton terminal (which could become a major hydrogen reception / processing point in the future). SZC is near the ports of Felixstowe, Harwich, Ipswich, and Lowestoft, which could be consumers of synthetic fuels to decarbonise shipping and port-side activity.

18 Annexed is a letter from Steve Gallant, Leader and Chair of the East Suffolk Community Partnership. (January 2021) ANNEX 1 - LETTER FROM STEVE GALLANT, LEADER AND CHAIR OF THE EAST SUFFOLK COMMUNITY PARTNERSHIP

(January 2021)