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Technical Report Template X.19.00388.GLA.R.001 B4 A Technical Report by Wood for Comhairle nan Eilean Siar Outer Hebrides Hydrogen Opportunities Market Study 07 July 2020 Wood Group UK Limited Outer Hebrides Hydrogen Opportunities - Market Study Executive Summary Wood was appointed by Comhairle nan Eilean Siar to provide consultancy services relating to the Outer Hebrides Hydrogen Opportunities Market Study (the Project). This Project provides a review of relevant policy, literature and projects related to renewable ‘green’ hydrogen and assesses the opportunities for hydrogen production throughout the Outer Hebrides. This report was funded by the Western Isles Development Trust and the Scottish Government's Community and Renewable Energy Scheme (CARES), and supported by Local Energy Scotland (LES) whom manage the CARES fund. The findings of this report suggest that the optimal sectors for pursuing green hydrogen in the Outer Hebrides from onshore wind are heat and transport. As well as being the largest possible hydrogen sectors (approximately 307 and 284 GWh per annum respectively), the hydrogen technology applications in these sectors are either emerging (such as heat networks) or established (such as hydrogen fuel cell vehicles). Opportunities in the power sector (i.e. energy storage and grid management applications) are viewed as limited at present due to the uncertain position of the transmission network interconnector upgrade to the mainland, SSEN’s desire to implement a Constraint Management Zone in the Western Isles, and the yet to be determined replacement plans for the aging fleet of SSE diesel power stations in the Outer Hebrides. Industrial opportunities for hydrogen deployment were similarly seen as limited due to the relatively small size of the sector and lack of hydrogen feedstock requirements by established manufacturers. With transport and heat determined to be the optimal sectors for pursuing hydrogen deployment, Wood located known energy users geographically on a spatial model to identify localities where demand would be clustered and hence suitable for supplying hydrogen in bulk. The four cross-sectoral heat/transport clusters identified are: 1. Greater Stornoway area; 2. Harris; 3. Lochboisdale (South Uist); 4. Barra. Recommendations have been made by Wood to progress the development of hydrogen and we encourage Comhairle nan Eilean Siar and other interested stakeholders to continue to pursue the development of a local hydrogen economy given the strong rationale for such an endeavour and the potential socio-economic and environmental benefits to the area. X.19.00388.GLA.R.001 Revision B4 Page 1 of 135 Certified to ISO 9001, ISO 14001, OHSAS 18001 and ISO17025 Wood Group UK Limited Outer Hebrides Hydrogen Opportunities - Market Study Comhairle nan Eilean Siar (the Comhairle) is the Local Authority for the Outer Hebrides of Scotland. The Comhairle is committed to developing a Hydrogen Economy for the Outer Hebrides, based on the manufacture of green hydrogen by electrolysis from renewables. The Comhairle has commissioned Wood to produce this report with funding from CARES and the WIDT. www.cne-siar.gov.uk The Scottish Government established the Community and Renewable Energy Scheme (CARES) to support and grow community and local energy projects throughout Scotland, as well as considerably increase the number of shared ownership energy installations across the country. The scheme is delivered by Local Energy Scotland on behalf of the Scottish Government. The Western Isles Development Trust (WIDT) was established as a charitable trust in February 2014 with objectives to advance citizenship, community development, environmental protection and improvement, education, arts, heritage, culture, science and poverty reflief in the Western Isles community. www.widt.co.uk Local Energy Scotland (LES) is a consortium made up of Energy Saving Trust, Changeworks, the Energy Agency, SCARF and The Wise Group. LES administer and manage the Scottish Government’s Community and Renewable Energy Scheme (CARES) with support for delivery from Ricardo Energy & Environment, Foundation Scotland and Snell Bridge. Wood is a global leader in the delivery of project management, engineering, consulting and technical services to energy and built environment customers. Wood operates in more than 60 countries, employing around 60,000 people, with revenues of over $10 billion. This report has been prepared by Wood on behalf of Comhairle nan Eilean Siar. www.woodplc.com X.19.00388.GLA.R.001 Revision B4 Page 2 of 135 Certified to ISO 9001, ISO 14001, OHSAS 18001 and ISO17025 Wood Group UK Limited Outer Hebrides Hydrogen Opportunities - Market Study Report Details Client: Comhairle nan Eilean Siar Client Contact: Anne Murray Report Distribution: Comhairle nan Eilean Siar: Anne Murray Wood: Alex Crowe, Adam Frew, Brian Macdonald, Alan Mortimer Report Classification: Public Approval Record Name Job Title Signature Prepared by: Renewable Energy Adam Frew Consultant Graduate Renewable Alex Crowe Energy Consultant Reviewed by: Discipline Manager - James Watt Process Alan Mortimer Director of Innovation Fergus Tickell Senior Consultant Authorised by: Alan Mortimer Director of Innovation Date of issue: 07 July 2020 X.19.00388.GLA.R.001 Revision B4 Page 3 of 135 Certified to ISO 9001, ISO 14001, OHSAS 18001 and ISO17025 Wood Group UK Limited Outer Hebrides Hydrogen Opportunities - Market Study Amendment Record Revision Date Summary of Amendments Purpose of Revision Number A1 19/11/2019 n/a First draft A2 19/03/2020 Minor amendments and updates For review B1 20/04/2020 For authorisation For Client A3 14/05/2020 Hydrogen Forum feedback For review B2 18/05/2020 For authorisation and issue For Client B3 07/07/2020 Table 2-1 Renewable Generators anonymised For Client B4 03/08/2020 Minor amendments following SGN review For Client X.19.00388.GLA.R.001 Revision B4 Page 4 of 135 Certified to ISO 9001, ISO 14001, OHSAS 18001 and ISO17025 Wood Group UK Limited Outer Hebrides Hydrogen Opportunities - Market Study NOTICE AND DISCLAIMER 1. This document entitled Market Study, document number X.19.00388.GLA.R.001 B4 dated 07 July 2020 has been prepared solely for Comhairle nan Eilean Siar (“the Client”) in connection with the Outer Hebrides Hydrogen Opportunities. This document in whole, or in part, may not be used or relied upon by any other person for any other purpose, without the express written permission of Wood Group UK Limited (“the Consultant”) and any such approval shall be subject to receipt by the Consultant from the prospective person of a countersigned copy of the Consultant’s reliance letter format (available upon written request). Any liability arising out of use of this document by the Client for any purpose not wholly connected with the above shall be the responsibility of the Client who shall indemnify the Consultant against all claims, costs, damages and losses arising out of such use. Any liability arising out of the use of this document by a third party shall be the responsibility of that party who shall indemnify the Consultant against all claims, costs, damages and losses arising out of such use. 2. The Client will indemnify the Consultant from and against any losses, claims, demands, damages, costs, charges, expenses or liabilities (or actions, investigations or other proceedings in respect thereof) which the Consultant may suffer or incur or which may be made against the Consultant relating to or arising directly or indirectly out of a claim by a third party where the Client has disclosed the document or has permitted the document to be disclosed to such third party without the prior written consent of the Consultant, and will reimburse the Consultant for all costs and expenses (including legal and other professional fees) which are incurred by the Consultant in connection with investigating or defending any such claim or proceeding 3. The Consultant accepts no liability whatsoever in relation to: a. documents or advice marked as “indicative”, “preliminary” or “draft”; b. non-technical matters, including but not limited to legal, financial and insurance considerations - it is recommended that the Client obtains advice on non-technical matters by suitably qualified parties; and c. any omission or inaccuracy arising directly or indirectly from an omission, or error, in the data supplied by the Client, or any other party, to conduct the scope of work. 4. Other than where specifically agreed in writing, data has not been independently verified and is assumed to be accurate and complete at the time of data provision. This applies to any data used in conducting the scope of work, whether or not specifically referenced in this document. 5. Wind speed and energy yield estimations presented in this document are based on the data provided and assumptions made at the time of writing. Wind speed and energy yield estimations are subject to a level of uncertainty and as such actual wind speed and energy yield values may differ from those detailed in this document. A party must use its own skill and judgement in deciding the applicability and appropriateness of the estimation in any given situation. 6. The Consultant accepts no liability in relation to its opinion on construction schedules, financial contingency or predicted operational expenditure, due to inherent uncertainty and unforeseen factors. 7. Any technology and technical design reviews are non-exhaustive. Unless expressly agreed, no design calculations have been checked. 8. Assessment of financial model technical
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