In-depth Q&A: How will the UK’s hydrogen strategy help achieve net-zero?

The UKs brand-new, long-awaited hydrogen technique provides more detail on how the federal government will support the advancement of a domestic low-carbon hydrogen sector, which today is practically non-existent.

Specialists have actually cautioned that, with hydrogen in short supply in the coming years, the UK needs to prioritise it in “hard-to-electrify” sectors such as heavy market as capability expands.

In this article, Carbon Brief highlights crucial points from the 121-page technique and analyzes a few of the main talking points around the UKs hydrogen strategies.

Hydrogen will be “important” for accomplishing the UKs net-zero target and might consume to a third of the countrys energy by 2050, according to the government.

On the other hand, company choices around the level of hydrogen usage in domestic heating and how to guarantee it is produced in a low-carbon method have been postponed or put out to consultation for the time being.

Why does the UK require a hydrogen strategy?

The strategy also required a ₤ 240m net-zero hydrogen fund, the creation of a hydrogen area warmed with the gas by 2023, and increasing hydrogen blending into gas networks to 20% to reduce dependence on natural gas.

Critics likewise characterise hydrogen– many of which is presently made from natural gas– as a way for nonrenewable fuel source business to maintain the status quo. (For all the advantages and drawbacks of hydrogen, see Carbon Briefs extensive explainer.).

Today we have released the UKs first Hydrogen Strategy! This is our strategy to: kick-start a whole market let loose the market to cut expenses ramp up domestic production unlock ₤ 4bn of private capital support 9k jobs #BuildBackGreenerhttps:// t.co/ aHZTr5yYeR– Kwasi Kwarteng (@KwasiKwarteng) August 17, 2021.

Companies such as Equinor are continuing with hydrogen advancements in the UK, however industry figures have actually alerted that the UK dangers being left. Other European nations have actually vowed billions to support low-carbon hydrogen expansion.

Its versatility implies it can be used to take on emissions in “hard-to-abate” sectors, such as heavy market, however it currently experiences high costs and low performance..

Prior to the new strategy, 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 virtually absolutely no.

In some applications, hydrogen will contend with electrification and carbon capture and storage (CCS) as the very best means of decarbonisation.

The file consists of an expedition of how the UK will expand production and produce a market for hydrogen based on domestic supply chains. This contrasts with Germany, which has been wanting to import hydrogen from abroad.

A recent All Party Parliamentary Group report on the role of hydrogen in powering industry consisted of a list of needs, mentioning that the federal government needs to “expand beyond its existing dedications of 5GW production in the forthcoming hydrogen method”. This call has actually been echoed by some industry groups.

Hydrogen need (pink area) and proportion of last energy consumption in 2050 (%). The central range is based on illustrative net-zero constant scenarios in the 6th carbon budget plan effect evaluation and the full variety is based upon the whole variety from hydrogen technique analytical annex. Source: UK hydrogen strategy.

The technique does not increase this target, although it keeps in mind that the federal government is “familiar with a possible pipeline of over 15GW of jobs”.

Nevertheless, the Climate Change Committee (CCC) has actually noted that, in order to strike the UKs carbon budgets and achieve net-zero emissions, choices in areas such as decarbonising heating and cars need to be made in the 2020s to allow time for facilities and vehicle stock changes.

There were also over 100 references to hydrogen throughout the federal governments energy white paper, showing its potential usage in lots of sectors. It also includes in the industrial and transportation decarbonisation techniques launched previously this year.

In its new method, the UK federal government makes it clear that it sees low-carbon hydrogen as a crucial part of its net-zero strategy, and says it desires the country to be a “international leader on hydrogen” by 2030.

Hydrogen growth for the next years is anticipated to start gradually, with a government aspiration to “see 1GW production capability by 2025″ set out in the technique.

Hydrogen is extensively seen as a vital part in strategies to accomplish net-zero emissions and has been the subject of significant buzz, with numerous nations prioritising it in their post-Covid green recovery plans.

As with most of the federal governments net-zero technique documents so far, the hydrogen strategy has been postponed by months, resulting in unpredictability around the future of this recently established market.

Nevertheless, as the chart below programs, if the governments strategies pertain to fulfillment it could then broaden substantially– taking up between 20-35% of the nations overall energy supply by 2050. This will need a significant growth of infrastructure and abilities in the UK.

What range of low-carbon hydrogen will be prioritised?

” If we desire to show, trial, start to commercialise and after that roll out the use of hydrogen in industry/air travel/freight or anywhere, then we require enough hydrogen. We cant wait till the supply side considerations are complete.”.

The file does not do that and rather states it will provide “more information on our production technique and twin track technique by early 2022”.

In the example selected for the assessment, natural gas paths where CO2 capture rates are below around 85% were left out..

The CCC has previously specified that the federal government should “set out [a] vision for contributions of hydrogen production from various routes to 2035” in its hydrogen strategy.

Green hydrogen is used electrolysers powered by sustainable electrical energy, while blue hydrogen is made utilizing gas, with the resulting emissions caught and saved..

The government has launched a consultation on low-carbon hydrogen standards to accompany the method, with a pledge to “finalise style aspects” of such requirements by early 2022.

This opposition capped when a recent research study caused headings stating that blue hydrogen is “worse for the climate than coal”.

There was substantial pushback on this conclusion, with other researchers– consisting of CCC head of carbon budget plans, David Joffe– pointing out that it relied on really high methane leak and a short-term step of international warming capacity that stressed the impact of methane emissions over CO2.

CO2 equivalent: Greenhouse gases can be revealed in regards to co2 equivalent, or CO2eq. For a provided quantity, various greenhouse gases trap different quantities of heat in the environment, a quantity called the worldwide warming capacity. Co2 equivalent is a method of comparing emissions from all greenhouse gases, not simply carbon dioxide.

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CO2 equivalent: Greenhouse gases can be expressed in regards to carbon dioxide equivalent, or CO2eq. For an offered amount, different greenhouse gases trap various quantities of heat in the atmosphere, a quantity called … Read More.

The new technique mostly prevents using this colour-coding system, however it states the government has devoted to a “twin track” method that will consist of the production of both ranges.

Comparison of rate quotes across different innovation types at central fuel prices commissioning from 2020 to 2050, ₤/ MWh hydrogen. Source: Hydrogen Production Costs.
2021.

The chart below, from a file laying out hydrogen costs released together with the primary strategy, reveals the anticipated decreasing expense of electrolytic hydrogen over time (green lines). (This includes hydrogen made using grid electrical power, which is not technically green unless the grid is 100% sustainable.).

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 main element in market development”.

The CCC has formerly specified “suitable emissions reductions” for blue hydrogen compared to fossil gas as “a minimum of 95% CO2 capture, 85% lifecycle greenhouse gas cost savings”.

Many researchers and ecological groups are sceptical about blue hydrogen provided its associated emissions.

The method specifies that the proportion of hydrogen supplied by specific technologies “depends on a series of assumptions, which can just be checked through the marketplaces response to the policies set out in this method and real, at-scale release of hydrogen”..

As it stands, blue hydrogen used steam methane reformation (SMR) is the least expensive low-carbon hydrogen available, according to government analysis consisted of in the technique. (For more on the relative costs of different hydrogen ranges, see this Carbon Brief explainer.).

For its part, the CCC has advised a “blue hydrogen bridge” as a helpful tool for attaining net-zero. It says permitting some blue hydrogen will minimize emissions faster in the short-term by changing more nonrenewable fuel sources with hydrogen when there is insufficient green hydrogen readily available..

The CCC has actually alerted that policies need to establish both blue and green alternatives, “instead of simply whichever is least-cost”.

Supporting a range of jobs will give the UK a “competitive advantage”, according to the government. Germany, by contrast, has said it will focus solely on green hydrogen.

The plan keeps in mind that, in some cases, hydrogen used electrolysers “could become cost-competitive with CCUS [carbon capture, utilisation and storage] -made it possible for methane reformation as early as 2025”..

It has also launched an accompanying report, prepared by consultancies E4Tech and Ludwig-Bölkow-Systemtechnik (LBST), which takes a look at maximum acceptable levels of emissions for low-carbon hydrogen production and the method for calculating these emissions.

The previous is basically zero-carbon, but the latter can still lead to emissions due to methane leakages from natural gas infrastructure and the reality that carbon capture and storage (CCS) does not record 100% of emissions..

Brief (ideally) assessing this blue hydrogen thing. Generally, the papers estimations potentially represent a case where blue H ₂ is done actually badly & & without any practical guidelines. And then cherry-picked a climate metric to make it look as bad as possible. https://t.co/Jx0FdDfdx5— David Joffe (@david_joffe) August 13, 2021.

At the heart of many conversations about low-carbon hydrogen production is whether the hydrogen is “green” or “blue”.

Prof Robert Gross, director of the UK Energy Research Centre, tells Carbon Brief that, in his view, it is “probably a bit unhelpful to get too preoccupied with the blue vs green hydrogen argument”. He states:.

Jess Ralston, an expert at thinktank the Energy and Climate Intelligence Unit (ECIU), said in a statement that the federal government must “be alive to the risk of gas market lobbying triggering it to commit too heavily to blue hydrogen therefore keeping the nation locked into fossil fuel-based technology”.

The figure below from the consultation, based on this analysis, reveals the impact of setting a limit of 15-20gCO2e per megajoule (MJ) of hydrogen (red bar). In this example, those production approaches above the red line, including some for producing blue hydrogen, would be excluded.

Glossary.

How will hydrogen be utilized in different sectors of the economy?

It consists of prepare for hydrogen heating trials and consultation on “hydrogen-ready” boilers by 2026.

Government analysis, consisted of in the technique, suggests possible hydrogen demand of approximately 38 terawatt-hours (TWh) by 2030, not consisting of blending it into the gas grid, and rising to 55-165TWh by 2035.

This is in line with the CCCs recommendation for its net-zero pathway, which sees low-carbon hydrogen scaling approximately 90TWh by 2035– around a 3rd of the size of the existing power sector.

Call for evidence on “hydrogen-ready” industrial devices by the end of 2021. Call for proof on phaseout of carbon-intensive hydrogen production in market “within a year”. Stage 2 of the ₤ 315m Industrial Energy Transformation Fund.A ₤ 55 million Industrial Fuel Switching 2 competition in 2021.

Michael Liebrich of Liebreich Associates has organised using low-carbon hydrogen into a “ladder”, with present applications– such as the chemicals market– offered top priority.

Illustrative hydrogen need in 2030 (blue) and 2035 (purple). Source: UK hydrogen technique.

Reacting to the report, energy researchers indicated the “miniscule” volumes of hydrogen expected to be produced in the future and advised the federal government to choose its priorities carefully.

Juliet Phillips, senior policy advisor and UK hydrogen expert at thinktank E3G tells Carbon Brief the technique had “exposed” the door for uses that “dont add the most value for the environment or economy”. She adds:.

” As the method confesses, there will not be significant quantities of low-carbon hydrogen for some time.

My lovelies, I just dropped Version 4 of the Clean Hydrogen Ladder! For anybody brand-new to all this, the ladder is my attempt to put usage cases for clean hydrogen into some sort of benefit order, since not all use cases are similarly most likely to be successful. 1/10 pic.twitter.com/I8HpqQjlKS— Michael Liebreich (@MLiebreich) August 15, 2021.

The new method is clear that market will be a “lead alternative” for early hydrogen usage, starting in the mid-2020s. It likewise states that it will “likely” be important for decarbonising transportation– especially heavy items cars, shipping and air travel– and balancing a more renewables-heavy grid.

The method likewise includes the choice of using hydrogen in sectors that may be better served by electrification, particularly domestic heating, where hydrogen has to contend with electric heat pumps..

Low-carbon hydrogen can be utilized to do everything from sustaining automobiles to heating homes, the truth is that it will likely be restricted by the volume that can probably be produced.

” Stronger signals of intent might guide private and public investments into those locations which add most value. The government has not clearly laid out how to decide upon which sectors will gain from the initial organized 5GW of production and has instead mainly left this to be figured out through pilots and trials.”.

Commitments made in the brand-new technique include:.

The government is more optimistic about using hydrogen in domestic heating. Its analysis recommends that as much as 45TWh of low-carbon hydrogen could be put to this use by 2035, as the chart below shows.

Coverage of the report and government advertising products stressed that the federal governments strategy would provide adequate hydrogen to change gas in around 3m houses each year.

Some applications, such as commercial heating, may be virtually difficult without a supply of hydrogen, and many experts have actually argued that these hold true where it must be prioritised, at least in the short term.

The CCC does not see comprehensive use of hydrogen outside of these restricted cases by 2035, as the chart below programs.

One significant exclusion is hydrogen for fuel-cell passenger cars and trucks. This is consistent with the governments focus on electric cars and trucks, which many scientists deem more effective and cost-efficient innovation.

The beginning point for the range– 0TWh– suggests there is significant unpredictability compared to other sectors, and even the greatest quote is just around a 10th of the energy currently utilized to heat UK houses.

The committee emphasises that hydrogen usage need to be limited to “locations less fit to electrification, especially delivering and parts of industry” and supplying flexibility to the power system.

In the real report, the federal government stated that it anticipated “in general the need for low carbon hydrogen for heating by 2030 to be reasonably low (<< 1TWh)".. 4) On page 62 the hydrogen method states that the federal government anticipates << 1 TWh of energy for heating to come from hydrogen by 2030. Present energy demand in the UK for area and hot water heating is 435 TWh according to Ofgem. So 1 TWh is 0.2%. Thats about 67,000 houses.-- Jan Rosenow (@janrosenow) August 17, 2021. Much will depend upon the progress of expediency studies in the coming years, and the governments upcoming heat and buildings strategy might also offer some clearness. Gniewomir Flis, a project manager at Agora Energiewende, tells Carbon Brief that-- in his view-- mixing "has no future". He explains:. " I would recommend to opt for these no-regret options for hydrogen demand [in market] that are currently readily available ... those need to be the focus.". In order to develop a market for hydrogen, the government states it will take a look at mixing up to 20% hydrogen into the gas network by late 2022 and goal to make a last decision in late 2023. How does the federal government strategy to support the hydrogen industry? Much of the resulting press protection of the hydrogen method, from the Financial Times to the Daily Telegraph, focused on the plan for a hydrogen industry "subsidised by taxpayers", as the money would originate from either higher expenses or public funds. Hydrogen demand (pink area) and percentage of last 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 admits, there will not be substantial amounts of low-carbon hydrogen for some time. 4) On page 62 the hydrogen strategy mentions that the federal government expects << 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 technology and nonrenewable fuel sources. Hydrogen producers would be offered a payment that bridges this space. Sharelines from this story. As it stands, low-carbon hydrogen stays pricey compared to nonrenewable fuel source options, there is unpredictability about the level of future demand and high risks for companies aiming to go into the sector. Now that its strategy has actually been published, the federal government states it will collect evidence from consultations on its low-carbon hydrogen requirement, net-zero hydrogen fund and business model:. " This will provide us a much better understanding of the mix of production technologies, how we will satisfy a ramp-up in need, and the function that new innovations could play in accomplishing the levels of production necessary to satisfy our future [6th carbon budget plan] and net-zero commitments.". The 10-point plan consisted of a promise to develop a hydrogen organization model to motivate private investment and a profits system to offer financing for business design. Anne-Marie Trevelyan-- minister for energy, tidy growth and climate change at BEIS-- informed the Times that the cost to provide long-lasting security to the market would be "very little" for private households. According to the federal governments press release, its favored design is "built on a comparable facility to the overseas wind agreements for distinction (CfDs)", which considerably cut costs of brand-new overseas wind farms. The brand-new hydrogen technique confirms that this company design will be settled in 2022, making it possible for the first contracts to be designated from the start of 2023. This is pending another assessment, which has actually been launched along with the main technique.