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Wind and gas projects keeping the southern North Sea busy

It is arguably leading the energy transition way for the UK, with multi-hundred to gigawatt class wind farms rubbing shoulders with significant gas production.

“We’re very much in the ascendancy,” said Simon Gray, chief executive of trade organisation East of England Energy Group (EEEGR).

“We now have off the east coast of England something like 56% of the UK’s offshore wind generation capacity and this is expected to go on increasing through to 2030.

“As the UK’s offshore wind capacity increases, we’re set to remain around the 50%-plus level.

“The reasons for that are simple and include shallow waters, a decent seabed for installing turbines, a good wind resource and easy access to the largest electricity markets in Britain: London, the south-east and the Midlands.

“And of course considerable quantities of natural gas are still being produced from the Southern Gas Basin, where new field discoveries continue to be made, albeit those are tight resources and therefore harder to develop and produce.

“We still have some of the largest volumes of decommissioning on the UKCS.

“The SNS is where the UK’s offshore story began in terms of gas and a considerable number of the platforms still out there are 30, 40, 50 years old.”
Change is in the air for the membership of EEEGR, whose supply chain membership is probably the most diverse of any energy trade body in the UK.

“Transition is the word on everyone’s lips,” Mr Gray said. “And that’s exactly where we are.

“We’re the part of the UK that is experiencing the greatest migration from fossil fuels towards renewables. And that process in theory needs to have been completed by 2050.

“Although gas is currently on the back foot because of weak prices, it still accounts for 28% of UK electricity generation compared with 2.3% from coal, 20% from nuclear and wind nearly 30%.”

In terms of indigenous UK gas production, the SNS accounts for around 30% via the Bacton terminal in Norfolk.

A major operation is under way to protect this strategically important facility from being engulfed by the North Sea as sea levels rise.

The £20 million-plus “sandscaping” is intended to protect a 5.6km stretch of coast by rebuilding beaches using huge volumes of sand.

Bacton is absolutely vital to current gas basin production and future development potential. And it handles significant volumes of imported gas via the North Sea’s hugely important interconnector network.

Gas has a critical transitional role to play for the next couple of decades at least and the SNS current revival is being usefully stimulated by the Oil and Gas Authority’s Southern

North Sea Tight Gas Strategy published in June 2017.

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UK energy minister questions future of National Grid

UK energy minister Kwasi Kwarteng has questioned whether National Grid should retain its flagship role operating the country’s electricity system following a power cut last month that disrupted more than 1m homes and businesses in England and Wales.

Mr Kwarteng, who assumed his role after Boris Johnson became prime minister in July and visited National Grid’s control centre following the blackout, told the Financial Times: “Frankly I think there is a question about the ESO [electricity system operator] and its role within the National Grid.”

National Grid, which was privatised in 1990, has seen off previous demands that it should be broken up but calls for a rethink have intensified following the outage last month that caused widespread rail disruption, particularly in and around London, and also affected a hospital in Ipswich and Newcastle airport.

The opposition Labour party intensified its demands for National Grid to be renationalised after the power cut but more moderate voices, such as Oxford university professor Dieter Helm, who authored a 2017 report on energy for the government, have also said the job of managing the system should be transferred to a publicly owned body.

The FTSE 100 company avoided a break-up in 2017 when Ofgem, the energy regulator, ruled it should be allowed to keep the electricity system operator role but it should be hived off into a legally separate business. However, it remains within the wider National Grid group.

Mr Kwarteng said he not believe the Ofgem decision was “envisaged as a permanent solution to this question”.

“I think it was seen as perhaps a staging post to another iteration where the two entities might be separate,” Mr Kwarteng said.

“As you know they were very much as one body and then we’ve had this separation within the same institution and people are saying now that there may well be the case that the ESO . . . should be separate. And again, this is a question that we’re looking at.”

National Grid both owns energy infrastructure in the UK and has overall responsibility for balancing electricity supply and demand, which critics say presents a conflict of interest. It has also been developing interconnectors — subsea cables that allow electricity to be traded with countries such as Belgium, France and the Netherlands, which compete with domestic power generators.

Analysts have privately suggested stripping National Grid of the electricity system operator role and creating a public body responsible for keeping Britain’s lights on would be an easy way for the Conservative party to counter Labour’s renationalisation agenda. 

Prof Helm suggested such a move would not only be in the public interest but “arguably also in National Grid’s interests”. 

He said the system operator role was a very small part of National Grid’s overall business, which also includes owning energy networks in the US. However the recent power cut had caused the company reputation damage, even though it has argued the events of August 9 were “extremely rare and unexpected”.

“There is little upside to its shareholders from owning the SO [system operator], and lots of risk, especially reputationally, as the recent power cut has revealed,” Prof Helm wrote in a recent blog.

The government and Ofgem are both investigating the power cut. National Grid has also been conducting its own internal inquiry, the final results of which were presented to Ofgem on Friday and will be published by the regulator on Tuesday.

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Bristol launches ambitious £1 billion net zero energy finance bid

Bristol has launched an ambitious plan to raise up to £1 billion of investment to turn it into the UK’s first carbon neutral city.

Bristol City Leap, a project co-led by Bristol City Council and local energy supplier Bristol Energy, has launched a global search for organisations willing to invest in a joint venture that will help deliver a net zero energy system in the city by 2030.

The project is more than a year in the planning, having first been unveiled in May last year. It was then approved by Bristol City Council in April this year, prompting more than 180 organisations – including tech firms, investors and energy companies – to get in touch.

Bristol City Leap has now formally launched the procurement process, which is expected to run for a number of months. More information, as well as an investment prospectus, is available on the Bristol ESCO website.

Bristol’s mayor Marvin Rees described the project as a “world first”, adding that while it would lead the way on carbon reduction, the project would also address “important social and economic challenges”.

“The inclusion of Bristol Energy is integral to delivering smart energy propositions utilising City Leap’s projects by weaving a number of technologies together, helping to ensure that the company continues to deliver clean energy and social value for local people,” he said.

Bristol Energy is to play a pivotal role in the City Leap project, the council said, and the utility is to bring forward and deliver smart energy propositions – including localised tariffs and new, innovative services – for the benefit of Bristol’s residents.

The supplier will benefit from additional investment, aimed to reduce its reliance on council funding.

Marek Majewicz, managing director at Bristol Energy, said that City Leap had “social value at its heart”.

“From community heat networks, to energy innovation in social housing, the substantial investment from the partnership will enable everyone in Bristol to benefit from low carbon, renewable energy projects.

“Bristol Energy is already working on a wide range of innovative projects and we’re looking forward to harnessing low-carbon technologies for the good of our city and our customers.”

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UK GAS-Prices jump as demand surge outstrips supply

LONDON, Sept 9 (Reuters) – British prompt wholesale gas prices jumped on Monday as a spike in demand due to colder weather and lower wind generation outstripped supply.

* Gas for immediate delivery rose 5.05 pence to 28.50 pence per therm at 0745 GMT.

* Day-ahead gas was yet to trade although the contract was bid at 27.00 pence, compared to a closing price of 25.10 pence per therm.

* The system opened undersupplied by 20 million cubic metres (mcm) with demand forecast at 186.2 mcm and supply seen at 167.7 mcm, National Grid data showed.

* The demand figure was very strong compared to the summer months and was 72 mcm above the seasonal norm, the data showed.

* Demand was boosted by falling temperatures prompting gas heating in some households to be switched on – residential demand is expected at 84 mcm, about 10 mcm higher than last week.

* Gas-for-power demand was also higher, after wind generation dropped off significantly to 3.2 gigawatts (GW) from close to peak capacity at 12 GW on certain days last week.

* Gas for power demand for Monday is at 57 mcm compared to levels of between 30 and 40 mcm on most days last week.

* On the supply side, flows from Norway through the Langeled pipeline remained low at 7 mcm/day, ahead of a shutdown expected on Tuesday for annual maintenance until Sept. 24.

* However, four liquefied natural gas (LNG) tankers are now expected to arrive in Britain in the next seven days, a relatively high number compared to recent weeks.

* Gas send-out rates from LNG terminals tend to increase in the days leading up to tanker arrivals as the facilities empty their storage to receive the new cargoes.

* In the Dutch gas market, the day-ahead gas price at the Dutch TTF hub was up 0.3 euro at 9.70 euros per megawatt hour.

* Benchmark Dec-19 EU carbon contract was 0.19 euro higher at 25.27 euros a tonne. (Reporting by Sabina Zawadzki; Editing by Susan Fenton)

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Octopus Energy buys out rival to propel it into the big time

Octopus Energy has struck a deal to become one of the UK’s fastest growing energy suppliers after agreeing to buy a smaller rival.

The energy challenger brand told its staff on Wednesday that it has agreed to buy Co-op Energy, which supplies gas and electricity to about 300,000 homes.

Octopus, which supplies 850,000 customers, is expected to confirm early on Thursday that the deal will nudge its business past 1 million customers after only four years in the market.

The deal, thought to be worth more than £30m, propels Octopus to within a whisker of rival supplier Bulb Energy, which supplies 1.4 million customers and is the UK’s fastest growing new supplier.

It follows a flurry of deals within the energy market which is beginning to consolidate after a flood of new suppliers joined the market in recent years, many of which have proved financially unstable.

Co-Op Energy snapped up 160,000 customers from GB Energy Supply after it collapsed in 2016, and then gained another 130,000 customers after its takeover of Flow Energy last year.

The company, part of the Midcounties Co-op, has since run into financial trouble. It revealed deepening losses earlier this year in the Co-op’s financial report, which hinted that the supplier might be sold to protect the wider business.

Octopus Energy, which is owned by Octopus Group, is also loss-making but has the full support of its investment fund owner which has ambitions to grow the business to compete with the big six.

Octopus Group was an early backer of the property site Zoopla and backs Big Gym, Secret Escapes and Eve mattresses through its investment arm Octopus Ventures.

Its fast-growing energy supplier bought smaller rival Affect Energy last September and took on the customers of failed energy start-up Iresa in December last year.

It also won a lucrative contract to supply energy to M&S Energy customers that was previously held by SSE for nine years.

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UK energy price fears as electricity imports climb to record high

Reliance on European power would bring extra costs after no-deal Brexit, say experts

The UK’s reliance on electricity imports has climbed to a record high amid fears that homes and businesses could face higher energy bills if the UK crashes out of Europe.

The latest government figures, released just weeks before Britain’s exit from the EU, show that the UK’s net electricity imports reached their highest ever level in the first quarter of this year.

The four high-voltage power cables linking the UK to Europe’s energy markets imported a sixth more electricity than the year before, after a new interconnector opened in January.

In total, European electricity imports made up almost 7% of the UK’s total demand, and the government hopes to increase imports to about 20% by 2025.

Although this is a small share of the UK’s electricity, experts have warned that higher import prices could lead to higher energy bills.

The government’s leaked no-deal planning report, Operation Yellowhammer, predicted a marked increase in energy prices for homes and businesses if the UK crashes out without a deal.

The market price for electricity could climb because of a fall in the value of the pound against the euro, but also because of potentially costly complications of severing ties with EU energy markets.

Gas and electricity bills rose by £2bn in the year after the 2016 referendum result because of the plummeting value of the pound, according to a report from University College London.

This translated into an average household’s bill increasing by £35 for electricity and £40 for gas, and researchers predicted bills would climb by a further £61 every year in the years following the referendum.

A report commissioned by National Grid before the referendum predicted that energy bills could climb by £500m every year by the 2020s if the UK left the EU’s internal energy market.

Kristian Ruby, the head of pan-European trade association Eurelectric, said a no-deal exit could mean the UK faces third-party costs to use the power lines connecting Britain to European power markets, which would raise the overall cost of the energy.

Ruby said the UK might also find it more difficult to trade if it were left out of the complex pan-European trading system, and this could place a “risk premium” on UK prices.

“When you throw all rules up in the air at the same time, this lack of clarity, predictability and rule of law is what is very concerning for us,” he added.

A spokesperson said the government had taken steps to make sure energy trading continued and that energy laws “work effectively and provide value for money”.

The Guardian understands that a pan-European network of energy system operators has agreed a plan for the UK to remain within the internal market on a voluntary basis which would offer the same commercial terms.

A spokesman for National Grid, which runs the UK’s power cables, said it was “not anticipating any additional charges for interconnectors in the event of a no-deal Brexit”.

However, the plan has not been agreed by the European commission and could be cast in doubt if the UK leaves without an agreement or without paying the £39bn exit fee.

Alexander Temerko, a major Conservative party donor, said he feared electricity market prices could jump by almost a third if the UK does not remain part of the EU’s internal energy market after a no-deal Brexit.

The Ukrainian-born billionaire, who is planning to build a new electricity cable between the UK and mainland Europe, said the price hike could mean higher bills and negative consequences for UK business.

Temerko publicly dropped his support for Boris Johnson during the Conservative leadership campaign earlier this year over fears he could steer Britain towards a no-deal Brexit.

“If we have a no-deal Brexit all existing regulations for the transmission of electricity will be terminated with immediate effect. I don’t know how quickly, or how high, the price of electricity would jump. My expert opinion is that prices could jump by 30%. But there are no scenarios for this. We are not ready,” he said.

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Green energy: why wind power will never be the answer

Wind farms only work with permanent public subsidy. Subsidy comes in various guises. The most obvious is contractual where the operator receives a guaranteed rate for electricity generated or a guaranteed top-up on what he sells his electricity for.

Such subsidy is inherently neither problematic nor exceptional. Nuclear power is also heavily subsidised.

Read more: ‘The green energy debate: the case for onshore wind’

Wind power is problematic because of its nature. Because they depend on wind, wind farms generate electricity that is unpredictable, intermittent and unreliable. This is unlike nuclear power stations which produce a constant stream of electricity (baseload energy) or gas plants, whose output can be varied on demand (dispatchable energy).
Wind’s intermittency would matter less if electricity could be stored at scale. But batteries only store comparatively small amounts, and there is no prospect of affordable batteries for grid-scale storage in the foreseeable future.

Electricity can be stored as potential hydro-electric power by pumping water uphill into reservoirs for release when required, like the Cruachan dam which operates as an adjunct to the Hunterston nuclear power station. However, Scotland lacks enough suitable topography, as well as the political will and money, to turn glens into hydro-electric power reservoirs for wind farms.

With storage not an option, the only way to control wind’s vagaries is to accommodate it within the wider electricity system, using primarily gas and nuclear generators to provide dispatchable and baseload power when wind can’t.

Balancing it in the wider electricity system constitutes a further subsidy, for it requires upgrades and extensions to the grid as well as keeping gas plants running on stand-by (“back-up”). But using the grid and other generators to make up for wind’s shortfalls becomes more challenging and expensive, the more wind generation enters the energy mix.

Increasingly, the grid is unable to take electricity from wind farms during windy periods. Wind farms are then “constrained off”, the energy effectively wasted and their operators compensated – last year to the tune of £125 million.

While the precise causes of the August 9 blackouts in England, in which Hornsea offshore wind farm is implicated, remain unclear, they testify to the increasing fragility of a national electricity system struggling to meet the challenges of increasing renewable generation.

Read more: ‘The green energy debate: are wind farms really worth it?

Like other European countries, the UK has reformed its subsidy regime in response to galloping wind farm development, exploding subsidy costs and ever-rising consumer bills. Abolishing the Renewables Obligation in April 2016 sounded the death knell for new onshore wind farms.

The focus shifted to offshore wind farms, and the new Contracts for Difference scheme for their subsidy. A kind of reverse auction, it encouraged operators to put in unfeasibly low bids for the prices at which offshore wind farms would generate. While many have heralded the apparently huge drop in offshore costs, no wind farms have actually begun operating at this rate. Industry experts doubt they ever will, suspecting the low offers were a ruse to lock out competition and then blackmail the government on pain of bankruptcy if the price is not raised.

The days where developers saw a prospective wind farm as a licence to print money while policymakers extolled wind energy as clean, green and free are long gone. In the end there is no escaping the laws of physics and engineering, or economics.

In coming years, a great deal of money and attention will have to be spent on improving the resilience of an electricity system undermined by too many remote and intermittent wind farms, and on finding ways to pay the still escalating costs of their subsidy contracts. There will be little appetite for a second wind bonanza whoever is in power.

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Renewable Energy

Renewable energy comes from the Earth’s natural resources – sunlight, wind, waves, the tides and geothermal heat from deep within our planet. It has two great advantages: unlike oil, coal and gas, it will never run out, and it’s clean – it doesn’t pollute the planet or cause dangerous climate change.

It is versatile and adaptable. Renewable energy can supply huge cities on the grid or remote villages unconnected to any mains electricity. It can also be built close to where the power is actually needed, and the sheer range of technologies means that one or another will be suitable almost anywhere.

The UK has some of the best renewable energy sources in the world. Our islands, battered by wind and waves, are perfect for tapping into these power sources. Even solar energy has a role to play – solar panels are more efficient in direct sunlight, but can generate power even on a cloudy day. New developments in battery storage mean renewable energy can be used even when the wind isn’t blowing or the sun shining. This provides a fantastic opportunity for the UK to be at the forefront of technological innovation, creating jobs and driving down costs even more.

The rise of renewable energy
In fact, renewable energy is slowly replacing fossil fuels. In 2015 renewables generated more power than coal for the first time ever, and by 2018 was approaching the level of gas generation and is set to continue growing. It’s also getting much cheaper – wind power now costs far less than nuclear, and between 2015 and 2017 the price of offshore wind halved.

All this makes much of the government’s attitude towards renewable energy at odds with its claim to being an international leader on tackling climate change. Cuts to government support for solar power has led to a drop in the number of solar panels being installed, and continued political and financial backing for fossil fuels and nuclear power just don’t make sense. The UK is legally committed to tackling climate change and, by 2050, reducing emissions by 80% compared to 1990. There is pressure on all governments to get to zero carbon emissions even before 2050 if we have any hope of keeping global temperature rises below 1.5 degrees.

Massively increasing renewable energy is the most important way the government is going to meet its commitments, and for us to have a chance of stopping the worst effects of climate change from happening.

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Frackers in UK get fresh hope government will loosen rules

A change of British government has given the much maligned fracking industry another opportunity to make out its case for stimulating the controversial technique to tap unconventional natural gas reserves.

Prime Minister Boris Johnson and his new business minister, Andrea Leadsom, have come out in favor of hydraulic fracturing in the past. That could provide impetus for an industry that has all but ground to a halt thanks to strict regulatory limits on the seismic activity around fracking wells.

As Cuadrilla Resources Ltd. resumed work at a site in Lancashire, the Department for Business, Energy & Industrial Strategy said Thursday that it saw shale gas as a crucial domestic energy source that can cut gas imports as well as working as a bridging fuel to get to net zero emissions by 2050. That may indicate the government could loosen rules that have hobbled the industry.

“For our industry in particular, we do need a review” of seismic limits, said Ken Cronin, chief executive officer of the U.K. Onshore Oil and Gas body.

Some sort of change is necessary to keep fracking alive. Cuadrilla has until Nov. 31 to work at its Preston Road site. After that, planning permission expires and only flow tests of existing boreholes are possible. The firm has applied to Lancashire County Council for an 18-month extension, but a decision on that is unlikely before summer 2020, a spokeswoman said.

Fracking involves pumping water and tiny particles into underground rock formations under high pressure, opening cavities to allow gas to flow into the wellbore. The technique can cause tremors in the earth, although most are so minor only scientific instruments can detect them.

In Britain, rules restrict fracking to operations that have underground seismic activity of below 0.5 on the Richter Scale. That’s a fraction of what’s allowed in Texas and Oklahoma where fracking has revolutionized the oil industry.

“We were stymied by the 0.5, and we think that there is good scientific evidence out there to increase that level,” Cronin said.

It’s one of the few technologies that could slow or even reverse the sharp declines in oil and gas production from the North Sea as conventional deposits run dry. Exploration has been halted a number of times over concerns about earthquakes caused by fracking, most of them too small for people to notice.

By comparison, a passing truck produces magnitude-3 quake on the Richter Scale, according to Bloomberg Intelligence. Cuadrilla Resources Ltd. had stopped its U.K. fracking operations in October, following a series of mini-seismic events at its site in Lancashire, north west England.

After years of delays, fracking in the U.K. seemed closer than ever when Cuadrilla Resources Ltd. said in February that the nation’s first horizontal fracking well had uncovered a large reservoir of high-quality fuel.

But that optimism however was short-lived as Cuadrilla blamed overzealous controls on seismic activity that prevent it from being able to fully tap the potential of the well. Both it and Jim Ratcliffe-owned Ineos Group Ltd., have said that unless the government loosens regulations they won’t be able to frack in the U.K.

Cuadrilla Chief Executive Officer Francis Egan said that government policy to explore and develop shale-gas “has not changed.” He said he took encouragement by government climate advisers, the Climate Change Committee, recognizing natural gas as an essential energy for the U.K.’s net-zero commitment.

“Give the British people their mineral rights, and get fracking at last,” Johnson wrote in the Telegraph in 2014. As Mayor of London, he told the Times of London newspaper that the city “should leave no stone unturned, or unfracked, in the cause of keeping the lights on.”

Leadsom wrote in the Yorkshire Post in 2016 that “a shale gas industry will not only boost our economy and create thousands of jobs across the supply chain it will help to guarantee a secure energy supply which is an absolute must for this government.”

Despite apparent support at ministerial level, dozens of lawmakers in the Conservative Party oppose the practice partly on environmental grounds and partly because of the threat dozens of wells would have to the countryside.

So far, the government hasn’t committed to changing the rules. On Thursday it restated its enthusiasm for fracking without saying how it would balance the environment concerns.

“Shale gas could be an important new domestic energy source reducing the level of gas imports while delivering broad economic benefits, including through the creation of well-paid, quality jobs,” the business department said in a statement. “It could also support our transition to net zero emissions by 2050.”

Opposition parties point out fracking and producing more gas isn’t compatible with goals to rein in fossil fuel emissions and climate change.

“There is no way we can reach net zero by 2050 if we fully exploit the UK’s shale gas reserve,” said Rebecca Long-Bailey, the member of Parliament who speaks for the Labour opposition on business. “Simply put, there is no room left for fracking and it should be banned immediately.”

Environmental questions
The practice has come under fire from environmental campaigners concerned about the affect it has on rock structures and water systems as well as the emissions. Protesters have consistently disrupted prospective shale gas sites up and down the U.K. and have taken the issue to court to have it stopped.

In a new study from Cornell University, globally the industry is found to be behind rising greenhouse-gas emissions, according to Robert Howarth. The process contributes more methane than cows and wetlands. The gas has global-warming potential, 84 times greater than carbon dioxide across a 20-year period.

“The industry seems to have struggled to convince the British public that developing a new fossil fuel resource is an environmentally responsible thing to do,” Laurence Williams, a research fellow in environmental politics at the University of Sussex, said in an email Wednesday.

The argument that shale gas can work as a transition fuel “had only limited success in persuading environmentally minded people to support fracking,” said Williams. “And it struggles to compete with the simplicity and clarity of a phrase like ‘keep it in the ground.’”

Business-utilities-UK -with-background

US start-up launches venture to convert organic waste into hydrogen gas for biofuels

US start-up company Electro-Active Technologies has licensed two biorefinery technologies to convert organic waste into renewable hydrogen gas for use as a biofuel.

The technologies were invented and patented by the Tennessee start-ups co-founders, Abjijeet Borole and Alex Lewis, while working at the Department of Energy’s Oak Ridge National Laboratory, according to a report by Renewable Energy Magazine.

The system combines biology and electrochemistry to degrade organic waste such as biomass or food waste, to produce hydrogen. Alex Lewis, the company’s CEO, said: “There are usually thousands of microbes that are required to convert a complex organic mixture from biomass into electrons.

“We developed an enrichment process to create this [microbial] consortium to efficiently extract electrons from organic materials.”

The electrolysis method they designed then combines the protons and electrons into hydrogen molecules. The pair originally developed both processes to tackle the problem of liquid waste formed during biofuel production; however, the company will now focus on fighting food waste.

Borole and Lewis chose food waste as a microbial feedstock after interviewing 80 customers at waste-to-hydrogen industries while participating in the Department of Energy’s Energy I-Corps, which helps to push commercialisation efforts at the laboratories. Because customers pay for the disposal of food waste, the food waste-based feedstock has economic advantages over using biomass.