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 information on how the government will support the advancement of a domestic low-carbon hydrogen sector, which today is essentially non-existent.

Experts have actually warned that, with hydrogen in brief supply in the coming years, the UK needs to prioritise it in “hard-to-electrify” sectors such as heavy industry as capability expands.

Firm choices around the extent of hydrogen usage in domestic heating and how to ensure it is produced in a low-carbon way have actually been delayed or put out to assessment for the time being.

Hydrogen will be “important” for attaining the UKs net-zero target and might meet up to a third of the nations energy requirements by 2050, according to the government.

In this short article, Carbon Brief highlights essential points from the 121-page technique and examines a few of the main talking points around the UKs hydrogen plans.

Why does the UK need a hydrogen strategy?

However, as with the majority of the federal governments net-zero technique documents so far, the hydrogen strategy has actually been postponed by months, leading to unpredictability around the future of this recently established market.

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

Hydrogen development for the next years is expected to begin slowly, with a government aspiration to “see 1GW production capability by 2025” laid out in the strategy.

There were likewise over 100 references to hydrogen throughout the governments energy white paper, showing its prospective use in many sectors. It also includes in the industrial and transport decarbonisation strategies released earlier this year.

The level of hydrogen usage in 2050 imagined by the technique is somewhat greater than set out by the CCC in its latest advice, however covers a similar variety to other research studies.

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

A recent All Party Parliamentary Group report on the function of hydrogen in powering industry included a list of demands, stating that the federal government should “expand beyond its existing dedications of 5GW production in the upcoming hydrogen strategy”. This call has been echoed by some market groups.

Critics likewise characterise hydrogen– the majority of which is presently made from natural gas– as a method for nonrenewable fuel source companies to maintain the status quo. (For all the benefits and disadvantages of hydrogen, see Carbon Briefs in-depth explainer.).

However, the Climate Change Committee (CCC) has noted that, in order to hit the UKs carbon spending plans and attain net-zero emissions, choices in areas such as decarbonising heating and vehicles need to be made in the 2020s to enable time for infrastructure and car stock modifications.

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

As the chart below shows, if the federal governments strategies come to fruition it could then expand considerably– making up between 20-35% of the nations overall energy supply by 2050. This will require a significant expansion of infrastructure and skills in the UK.

Prior to the brand-new strategy, the prime ministers 10-point plan in November 2020 consisted of plans to produce 5 gigawatts (GW) of yearly low-carbon hydrogen production capacity in the UK by 2030. Presently, this capacity stands at virtually absolutely no.

Today we have published the UKs very first Hydrogen Strategy! This is our strategy to: kick-start a whole market unleash the market to cut costs increase 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, but market figures have cautioned that the UK threats being left behind. Other European countries have actually pledged billions to support low-carbon hydrogen expansion.

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

Its adaptability implies it can be used to take on emissions in “hard-to-abate” sectors, such as heavy industry, but it currently experiences high rates and low effectiveness..

The document contains an exploration of how the UK will expand production and create a market for hydrogen based upon domestic supply chains. This contrasts with Germany, which has actually been aiming to import hydrogen from abroad.

Hydrogen demand (pink location) and proportion of last energy consumption in 2050 (%). The main range is based on illustrative net-zero consistent circumstances in the sixth carbon spending plan effect evaluation and the complete variety is based on the entire variety from hydrogen method analytical annex. Source: UK hydrogen technique.

Hydrogen is extensively viewed as an important element in strategies to attain net-zero emissions and has been the topic of considerable hype, with numerous countries prioritising it in their post-Covid green recovery plans.

What variety of low-carbon hydrogen will be prioritised?

Quick (hopefully) showing on this blue hydrogen thing. Generally, the papers estimations possibly represent a case where blue H ₂ is done truly terribly & & 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.

The document does not do that and rather says it will offer “additional detail on our production strategy and twin track approach by early 2022”.

This opposition capped when a recent research study led to headings stating that blue hydrogen is “even worse for the environment than coal”.

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

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

Close.
CO2 equivalent: Greenhouse gases can be revealed in regards to co2 equivalent, or CO2eq. For a given quantity, different greenhouse gases trap different quantities of heat in the atmosphere, a quantity understood as … Read More.

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

Green hydrogen is used electrolysers powered by renewable electrical power, while blue hydrogen is made using natural gas, with the resulting emissions caught and stored..

The technique states that the percentage of hydrogen provided by specific technologies “depends upon a range of assumptions, which can only be checked through the marketplaces reaction to the policies set out in this strategy and genuine, at-scale release of hydrogen”..

For its part, the CCC has actually suggested a “blue hydrogen bridge” as a beneficial tool for accomplishing net-zero. It states enabling some blue hydrogen will minimize emissions faster in the short-term by replacing more nonrenewable fuel sources with hydrogen when there is not adequate green hydrogen available..

” If we desire to show, trial, begin to commercialise and then present using hydrogen in industry/air travel/freight or any place, then we need enough hydrogen. We cant wait till the supply side deliberations are complete.”.

The CCC has actually warned that policies must develop both blue and green alternatives, “rather than simply whichever is least-cost”.

The federal government has actually released a consultation on low-carbon hydrogen requirements to accompany the technique, with a pledge to “settle design aspects” of such standards by early 2022.

As it stands, blue hydrogen made using steam methane reformation (SMR) is the most affordable low-carbon hydrogen offered, according to federal government analysis consisted of in the method. (For more on the relative expenses of various hydrogen ranges, see this Carbon Brief explainer.).

Many scientists and environmental groups are sceptical about blue hydrogen given its associated emissions.

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

In the example chosen for the consultation, gas routes where CO2 capture rates are listed below around 85% were left out..

The brand-new technique mostly prevents utilizing this colour-coding system, but it says the government has actually committed to a “twin track” method that will include the production of both varieties.

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 danger of gas industry lobbying triggering it to dedicate too greatly to blue hydrogen therefore keeping the nation locked into fossil fuel-based technology”.

Glossary.

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

Contrast of cost quotes throughout different technology types at main fuel costs commissioning from 2020 to 2050, ₤/ MWh hydrogen. Source: Hydrogen Production Costs.
2021.

The CCC has actually formerly specified that the federal government needs to “set out [a] vision for contributions of hydrogen production from different routes to 2035” in its hydrogen technique.

The chart below, from a file describing hydrogen costs launched alongside the main technique, reveals the anticipated decreasing cost of electrolytic hydrogen with time (green lines). (This consists of hydrogen made utilizing grid electrical energy, which is not technically green unless the grid is 100% eco-friendly.).

In May, S&P Global Platts reported that Rita Wadey– hydrogen economy deputy director at the Department for Business, Energy & & Industrial Strategy (BEIS)– stated that, instead of “blue” or “green”, the UK would “think about carbon strength as the primary factor in market development”.

It has actually likewise launched an accompanying report, prepared by consultancies E4Tech and Ludwig-Bölkow-Systemtechnik (LBST), which analyzes optimum appropriate levels of emissions for low-carbon hydrogen production and the approach for calculating these emissions.

The former is essentially zero-carbon, but the latter can still lead to emissions due to methane leakages from gas facilities and the fact that carbon capture and storage (CCS) does not catch 100% of emissions..

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

The figure listed below from the consultation, based on this analysis, reveals the effect of setting a limit 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 left out.

The plan notes that, sometimes, hydrogen made utilizing electrolysers “could end up being cost-competitive with CCUS [carbon storage, utilisation and capture] -made it possible for methane reformation as early as 2025”..

How will hydrogen be used in various sectors of the economy?

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

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

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

However, the method also includes the choice of using hydrogen in sectors that might be better served by electrification, especially domestic heating, where hydrogen has to compete with electrical heat pumps..

Dedications made in the brand-new strategy consist of:.

The brand-new method is clear that market will be a “lead choice” for early hydrogen use, beginning in the mid-2020s. It likewise states that it will “likely” be important for decarbonising transportation– particularly heavy goods automobiles, shipping and aviation– and stabilizing a more renewables-heavy grid.

” As the method confesses, there wont be significant quantities of low-carbon hydrogen for some time. [] we require to utilize it where there are few alternatives 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.

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

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

Juliet Phillips, senior policy consultant and UK hydrogen expert at thinktank E3G tells Carbon Brief the technique had actually “exposed” the door for usages that “do not add the most value for the environment or economy”. She adds:.

However, the starting point for the variety– 0TWh– recommends there is considerable uncertainty compared to other sectors, and even the highest quote is just around a 10th of the energy presently utilized to heat UK homes.

However, in the real report, the federal government said that it expected “in general the need for low carbon hydrogen for heating by 2030 to be relatively low (<< 1TWh)".. Low-carbon hydrogen can be used to do everything from fuelling cars and trucks to heating homes, the reality is that it will likely be limited by the volume that can feasibly be produced. The government is more positive about using hydrogen in domestic heating. Its analysis recommends that approximately 45TWh of low-carbon hydrogen could be put to this usage by 2035, as the chart below suggests. Illustrative hydrogen demand in 2030 (blue) and 2035 (purple). Source: UK hydrogen technique. Responding to the report, energy researchers pointed to the "miniscule" volumes of hydrogen anticipated to be produced in the future and prompted the government to choose its priorities carefully. Coverage of the report and government marketing products emphasised that the federal governments strategy would offer sufficient hydrogen to replace gas in around 3m houses each year. " Stronger signals of intent might steer public and private financial investments into those locations which include most value. The federal government has not plainly set out how to choose which sectors will gain from the initial organized 5GW of production and has instead largely left this to be determined through trials and pilots.". It includes strategies for hydrogen heating trials and assessment on "hydrogen-ready" boilers by 2026. The committee stresses that hydrogen usage must be limited to "locations less fit to electrification, especially shipping and parts of industry" and supplying flexibility to the power system. Some applications, such as industrial heating, may be essentially difficult without a supply of hydrogen, and lots of experts have argued that these hold true where it ought to be prioritised, a minimum of in the brief term. One notable exclusion is hydrogen for fuel-cell passenger cars and trucks. This is consistent with the federal governments focus on electric vehicles, which many researchers deem more affordable and effective technology. Federal government analysis, consisted of in the method, suggests possible hydrogen need of as much as 38 terawatt-hours (TWh) by 2030, not including blending it into the gas grid, and rising to 55-165TWh by 2035. 4) On page 62 the hydrogen method specifies that the government anticipates << 1 TWh of energy for heating to come from hydrogen by 2030. Existing energy demand in the UK for area and warm water heating is 435 TWh according to Ofgem. 1 TWh is 0.2%. Thats about 67,000 homes.-- Jan Rosenow (@janrosenow) August 17, 2021. " I would suggest to opt for these no-regret choices for hydrogen demand [in market] that are already offered ... those need to be the focus.". Finally, in order to produce a market for hydrogen, the federal government states it will take a look at mixing approximately 20% hydrogen into the gas network by late 2022 and objective to make a decision in late 2023. Much will hinge on the progress of expediency studies in the coming years, and the governments approaching heat and buildings strategy may also offer some clarity. Gniewomir Flis, a project manager at Agora Energiewende, tells Carbon Brief that-- in his view-- mixing "has no future". He explains:. How does the federal government strategy to support the hydrogen market? These contracts are developed to get rid of the cost space between the preferred innovation and fossil fuels. Hydrogen producers would be offered a payment that bridges this space. Now that its method has actually been released, the government says it will collect proof from consultations on its low-carbon hydrogen requirement, net-zero hydrogen fund and business design:. The brand-new hydrogen strategy confirms that this service design will be finalised in 2022, enabling the very first contracts to be allocated from the start of 2023. This is pending another assessment, which has been released together with the primary strategy. According to the governments news release, its favored design is "built on a comparable premise to the offshore wind contracts for distinction (CfDs)", which considerably cut costs of new overseas wind farms. " This will provide us a much better understanding of the mix of production technologies, how we will meet a ramp-up in demand, and the function that new innovations might play in accomplishing the levels of production required to meet our future [sixth carbon budget] and net-zero dedications.". Much of the resulting press coverage of the hydrogen method, from the Financial Times to the Daily Telegraph, concentrated on the prepare for a hydrogen industry "subsidised by taxpayers", as the cash would come from either higher bills or public funds. The 10-point plan consisted of a promise to establish a hydrogen organization design to encourage personal financial investment and a revenue system to supply financing for business design. Sharelines from this story. As it stands, low-carbon hydrogen stays expensive compared to nonrenewable fuel source options, there is uncertainty about the level of future demand and high risks for companies aiming to go into the sector. Anne-Marie Trevelyan-- minister for energy, clean development and climate change at BEIS-- told the Times that the cost to offer long-lasting security to the market would be "really small" for individual households. Hydrogen demand (pink area) and percentage of final energy intake in 2050 (%). My lovelies, I simply dropped Version 4 of the Clean Hydrogen Ladder! Call for proof on phaseout of carbon-intensive hydrogen production in market "within a year"." As the method admits, there will not be substantial amounts of low-carbon hydrogen for some time. 4) On page 62 the hydrogen strategy specifies that the federal government anticipates << 1 TWh of energy for heating to come from hydrogen by 2030.