In-depth Q&A: How will the UK’s hydrogen strategy help achieve net-zero?
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11% OffThe UKs new, long-awaited hydrogen strategy offers more detail on how the federal government will support the development of a domestic low-carbon hydrogen sector, which today is practically non-existent.
Meanwhile, company decisions around the level of hydrogen usage in domestic heating and how to ensure it is produced in a low-carbon way have been postponed or put out to assessment for the time being.
Hydrogen will be “vital” for accomplishing the UKs net-zero target and could use up to a 3rd of the countrys energy by 2050, according to the federal government.
Experts have alerted that, with hydrogen in short supply in the coming years, the UK must prioritise it in “hard-to-electrify” sectors such as heavy industry as capability expands.
In this post, Carbon Brief highlights key points from the 121-page method and examines a few of the main talking points around the UKs hydrogen strategies.
Why does the UK require a hydrogen strategy?
As with most of the federal governments net-zero strategy files so far, the hydrogen strategy has actually been delayed by months, resulting in uncertainty around the future of this fledgling industry.
Hydrogen growth for the next decade is expected to begin gradually, with a federal government goal to “see 1GW production capacity by 2025” set out in the technique.
Prior to the new method, the prime ministers 10-point strategy in November 2020 consisted of plans to produce five gigawatts (GW) of yearly low-carbon hydrogen production in the UK by 2030. Currently, this capacity stands at essentially absolutely no.
There were likewise over 100 references to hydrogen throughout the federal governments energy white paper, reflecting its possible usage in many sectors. It likewise features in the industrial and transportation decarbonisation techniques launched earlier this year.
The strategy likewise required a ₤ 240m net-zero hydrogen fund, the development of a hydrogen area warmed with the gas by 2023, and increasing hydrogen blending into gas networks to 20% to minimize reliance on gas.
In its brand-new strategy, the UK government makes it clear that it sees low-carbon hydrogen as a key part of its net-zero strategy, and says it desires the nation to be a “worldwide leader on hydrogen” by 2030.
As the chart listed below shows, if the federal governments plans come to fruition it might then expand substantially– taking up in between 20-35% of the countrys overall energy supply by 2050. This will need a significant growth of facilities and abilities in the UK.
The strategy does not increase this target, although it notes that the government is “familiar with a prospective pipeline of over 15GW of tasks”.
Hydrogen need (pink area) and proportion of last energy intake in 2050 (%). The central range is based on illustrative net-zero constant scenarios in the 6th carbon spending plan impact assessment and the full variety is based upon the entire variety from hydrogen technique analytical annex. Source: UK hydrogen strategy.
Nevertheless, the Climate Change Committee (CCC) has actually noted that, in order to hit the UKs carbon budget plans and attain net-zero emissions, choices in locations such as decarbonising heating and lorries require to be made in the 2020s to permit time for infrastructure and vehicle stock modifications.
Critics also characterise hydrogen– the majority of which is presently made from natural gas– as a way for fossil fuel business to maintain the status quo. (For all the advantages and downsides of hydrogen, see Carbon Briefs in-depth explainer.).
A recent All Party Parliamentary Group report on the function of hydrogen in powering market included a list of needs, stating that the government should “expand beyond its existing dedications of 5GW production in the upcoming hydrogen method”. This call has actually been echoed by some market groups.
In some applications, hydrogen will take on electrification and carbon capture and storage (CCS) as the finest means of decarbonisation.
Its adaptability implies it can be used to deal with emissions in “hard-to-abate” sectors, such as heavy market, but it currently struggles with high prices and low performance..
The document contains an exploration of how the UK will broaden production and develop a market for hydrogen based on domestic supply chains. This contrasts with Germany, which has actually been aiming to import hydrogen from abroad.
Today we have actually published the UKs very first Hydrogen Strategy! This is our strategy to: kick-start a whole industry let loose the market to cut costs ramp up domestic production unlock ₤ 4bn of private capital support 9k jobs #BuildBackGreenerhttps:// t.co/ aHZTr5yYeR– Kwasi Kwarteng (@KwasiKwarteng) August 17, 2021.
Hydrogen is extensively seen as a crucial part in plans to accomplish net-zero emissions and has actually been the topic of considerable buzz, with many countries prioritising it in their post-Covid green recovery plans.
Companies such as Equinor are pressing on with hydrogen advancements in the UK, but market figures have cautioned that the UK threats being left. Other European countries have vowed billions to support low-carbon hydrogen growth.
What variety of low-carbon hydrogen will be prioritised?
At the heart of numerous conversations about low-carbon hydrogen production is whether the hydrogen is “green” or “blue”.
The new technique largely avoids using this colour-coding system, but it states the government has actually committed to a “twin track” method that will consist of the production of both ranges.
Green hydrogen is made using electrolysers powered by renewable electricity, while blue hydrogen is used natural gas, with the resulting emissions captured and kept..
The method states that the percentage of hydrogen provided by specific technologies “depends upon a variety of assumptions, which can only be checked through the marketplaces response to the policies set out in this technique and genuine, at-scale release of hydrogen”..
In the example chosen for the consultation, natural gas routes where CO2 capture rates are listed below around 85% were omitted..
The chart below, from a document describing hydrogen costs launched alongside the main technique, reveals the anticipated declining expense of electrolytic hydrogen over time (green lines). (This includes hydrogen used grid electrical power, which is not technically green unless the grid is 100% eco-friendly.).
Glossary.
It has likewise released an accompanying report, prepared by consultancies E4Tech and Ludwig-Bölkow-Systemtechnik (LBST), which takes a look at optimum acceptable levels of emissions for low-carbon hydrogen production and the approach for determining these emissions.
The file does not do that and rather states it will provide “more information on our production method and twin track technique by early 2022”.
This opposition came to a head when a current study resulted in headings mentioning that blue hydrogen is “worse for the environment than coal”.
The CCC has actually previously specified “appropriate emissions reductions” for blue hydrogen compared to fossil gas as “a minimum of 95% CO2 capture, 85% lifecycle greenhouse gas savings”.
The federal government has actually released a consultation on low-carbon hydrogen requirements to accompany the method, with a pledge to “settle style components” of such standards by early 2022.
Prof Robert Gross, director of the UK Energy Research Centre, tells Carbon Brief that, in his view, it is “most likely a bit unhelpful to get too preoccupied with the blue vs green hydrogen dispute”. He says:.
CO2 equivalent: Greenhouse gases can be revealed in regards to co2 equivalent, or CO2eq. For an offered amount, different greenhouse gases trap different quantities of heat in the atmosphere, a quantity called the international warming capacity. Co2 equivalent is a method of comparing emissions from all greenhouse gases, not just carbon dioxide.
There was considerable pushback on this conclusion, with other scientists– consisting of CCC head of carbon spending plans, David Joffe– pointing out that it relied on very high methane leakage and a short-term procedure of international warming capacity that stressed the impact of methane emissions over CO2.
The figure below from the consultation, based upon this analysis, shows the effect of setting a threshold of 15-20gCO2e per megajoule (MJ) of hydrogen (red bar). In this example, those production methods above the red line, including some for producing blue hydrogen, would be omitted.
Contrast of rate estimates throughout different technology types at central fuel costs commissioning from 2020 to 2050, ₤/ MWh hydrogen. Source: Hydrogen Production Costs.
2021.
” If we wish to show, trial, begin to commercialise and then present using hydrogen in industry/air travel/freight or wherever, then we need enough hydrogen. We cant wait till the supply side considerations are total.”.
Supporting a range of tasks will provide the UK a “competitive benefit”, according to the federal government. Germany, by contrast, has said it will focus specifically on green hydrogen.
In May, S&P Global Platts reported that Rita Wadey– hydrogen economy deputy director at the Department for Business, Energy & & Industrial Strategy (BEIS)– said that, instead of “blue” or “green”, the UK would “consider carbon strength as the primary consider market advancement”.
The previous is essentially zero-carbon, but the latter can still lead to emissions due to methane leaks from natural gas infrastructure and the truth that carbon capture and storage (CCS) does not catch 100% of emissions..
The CCC has actually alerted that policies need to develop both green and blue choices, “instead of just whichever is least-cost”.
The strategy keeps in mind that, in some cases, hydrogen used electrolysers “might end up being cost-competitive with CCUS [carbon capture, storage and utilisation] -enabled methane reformation as early as 2025”..
As it stands, blue hydrogen made using steam methane reformation (SMR) is the least expensive low-carbon hydrogen available, according to government analysis included in the technique. (For more on the relative costs of various hydrogen varieties, see this Carbon Brief explainer.).
Environmental groups and lots of scientists are sceptical about blue hydrogen offered its associated emissions.
For its part, the CCC has actually suggested a “blue hydrogen bridge” as a beneficial tool for attaining net-zero. It states permitting some blue hydrogen will reduce emissions quicker in the short-term by changing more fossil fuels with hydrogen when there is not enough green hydrogen offered..
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CO2 equivalent: Greenhouse gases can be revealed in regards to carbon dioxide equivalent, or CO2eq. For a given amount, various greenhouse gases trap various amounts of heat in the atmosphere, a quantity known as … Read More.
Jess Ralston, an expert at thinktank the Energy and Climate Intelligence Unit (ECIU), stated in a statement that the federal government ought to “live to the threat of gas industry lobbying triggering it to commit too greatly to blue hydrogen and so keeping the country locked into fossil fuel-based innovation”.
The CCC has formerly specified that the federal government needs to “set out [a] vision for contributions of hydrogen production from different paths to 2035” in its hydrogen method.
Short (ideally) reflecting on this blue hydrogen thing. Generally, the papers computations potentially represent a case where blue H ₂ is done actually badly & & with no sensible policies. And after that cherry-picked a climate metric to make it look as bad as possible. https://t.co/Jx0FdDfdx5— David Joffe (@david_joffe) August 13, 2021.
How will hydrogen be used in various sectors of the economy?
Although low-carbon hydrogen can be used to do everything from sustaining automobiles to heating houses, the reality is that it will likely be restricted by the volume that can probably be produced.
In the actual report, the government said that it expected “overall the need for low carbon hydrogen for heating by 2030 to be fairly low (<< 1TWh)".. The CCC does not see extensive usage of hydrogen outside of these minimal cases by 2035, as the chart below programs. " Stronger signals of intent might guide private and public financial investments into those locations which add most value. The federal government has not plainly set out how to pick which sectors will benefit from the initial organized 5GW of production and has rather mainly left this to be determined through pilots and trials.". The new technique is clear that industry will be a "lead choice" for early hydrogen usage, starting in the mid-2020s. It also says that it will "most likely" be essential for decarbonising transport-- especially heavy products cars, shipping and aviation-- and balancing a more renewables-heavy grid. Coverage of the report and government advertising products stressed that the federal governments strategy would provide adequate hydrogen to replace natural gas in around 3m homes each year. Federal government analysis, included in the technique, suggests possible hydrogen demand of up to 38 terawatt-hours (TWh) by 2030, not including blending it into the gas grid, and increasing to 55-165TWh by 2035. Call for proof on "hydrogen-ready" industrial equipment by the end of 2021. Call for evidence on phaseout of carbon-intensive hydrogen production in industry "within a year". Stage 2 of the ₤ 315m Industrial Energy Transformation Fund.A ₤ 55 million Industrial Fuel Switching 2 competitors in 2021. Juliet Phillips, senior policy consultant and UK hydrogen specialist at thinktank E3G informs Carbon Brief the method had actually "exposed" the door for usages that "dont add the most worth for the climate or economy". She adds:. The committee stresses that hydrogen usage ought to be limited to "locations less matched to electrification, particularly delivering and parts of industry" and supplying flexibility to the power system. One noteworthy exemption is hydrogen for fuel-cell automobile. This is constant with the governments focus on electric automobiles, which many researchers see as more efficient and economical technology. Dedications made in the brand-new technique consist of:. It includes plans for hydrogen heating trials and consultation on "hydrogen-ready" boilers by 2026. This remains in line with the CCCs suggestion for its net-zero path, which sees low-carbon hydrogen scaling approximately 90TWh by 2035-- around a third of the size of the current power sector. However, the beginning point for the variety-- 0TWh-- recommends there is substantial uncertainty compared to other sectors, and even the highest price quote is just around a 10th of the energy currently used to heat UK houses. Michael Liebrich of Liebreich Associates has actually arranged making use of low-carbon hydrogen into a "ladder", with existing applications-- such as the chemicals market-- given leading priority. The government is more optimistic about using hydrogen in domestic heating. Its analysis recommends that approximately 45TWh of low-carbon hydrogen might be put to this use by 2035, as the chart listed below indicates. Reacting to the report, energy researchers pointed to the "small" volumes of hydrogen expected to be produced in the near future and advised the federal government to select its concerns thoroughly. So, my lovelies, I simply dropped Version 4 of the Clean Hydrogen Ladder! For anyone brand-new to all this, the ladder is my effort to put usage cases for clean hydrogen into some sort of merit order, due to the fact that not all usage cases are equally likely to succeed. 1/10 pic.twitter.com/I8HpqQjlKS— Michael Liebreich (@MLiebreich) August 15, 2021. Some applications, such as industrial heating, might be practically difficult without a supply of hydrogen, and many specialists have argued that these are the cases where it must be prioritised, a minimum of in the short-term. The technique also includes the option of using hydrogen in sectors that may be better served by electrification, especially domestic heating, where hydrogen has to compete with electric heat pumps.. " As the method admits, there will not be substantial quantities of low-carbon hydrogen for a long time. [For that reason] we require to utilize it where there are few options and not as a like-for-like replacement of gas," Dr Jan Rosenow, director of European programmes at the Regulatory Assistance Project, in a declaration. Illustrative hydrogen demand in 2030 (blue) and 2035 (purple). Source: UK hydrogen technique. 4) On page 62 the hydrogen technique states that the government expects << 1 TWh of energy for heating to come from hydrogen by 2030. 1 TWh is 0.2%. In order to produce a market for hydrogen, the government says it will analyze blending up to 20% hydrogen into the gas network by late 2022 and aim to make a last choice in late 2023. Gniewomir Flis, a job supervisor at Agora Energiewende, informs Carbon Brief that-- in his view-- mixing "has no future". He discusses:. " I would recommend to go with these no-regret options for hydrogen demand [in market] that are already available ... those must be the focus.". Much will depend upon the progress of feasibility studies in the coming years, and the governments upcoming heat and buildings technique may likewise provide some clearness. How does the government plan to support the hydrogen market? As it stands, low-carbon hydrogen remains pricey compared to nonrenewable fuel source alternatives, there is unpredictability about the level of future need and high dangers for companies intending to enter the sector. The 10-point plan included a pledge to establish a hydrogen service design to encourage personal financial investment and an earnings mechanism to supply funding for the service design. According to the governments news release, its preferred design is "constructed on a similar property to the overseas wind agreements for distinction (CfDs)", which considerably cut expenses of brand-new offshore wind farms. Anne-Marie Trevelyan-- minister for energy, tidy development and climate change at BEIS-- told the Times that the expense to supply long-lasting security to the market would be "extremely little" for specific families. The new hydrogen technique validates that this organization design will be settled in 2022, enabling the very first contracts to be assigned from the start of 2023. This is pending another assessment, which has been launched together with the primary method. Now that its technique has been published, the government says it will gather proof from assessments on its low-carbon hydrogen requirement, net-zero hydrogen fund and the service model:. Sharelines from this story. Much of the resulting press protection of the hydrogen technique, from the Financial Times to the Daily Telegraph, focused on the strategy for a hydrogen market "subsidised by taxpayers", as the money would originate from either higher expenses or public funds. Hydrogen need (pink location) and percentage of final energy usage in 2050 (%). My lovelies, I just dropped Version 4 of the Clean Hydrogen Ladder! Call for proof on phaseout of carbon-intensive hydrogen production in industry "within a year"." As the technique confesses, there wont be considerable amounts of low-carbon hydrogen for some time. 4) On page 62 the hydrogen method mentions that the government anticipates << 1 TWh of energy for heating to come from hydrogen by 2030. These contracts are created to get rid of the cost gap between the favored innovation and fossil fuels. Hydrogen producers would be given a payment that bridges this space. " This will offer us a better understanding of the mix of production technologies, how we will meet a ramp-up in need, and the function that new innovations might play in achieving the levels of production needed to meet our future [6th carbon spending plan] and net-zero commitments.".