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 federal government will support the advancement of a domestic low-carbon hydrogen sector, which today is practically non-existent.
Hydrogen will be “vital” for achieving the UKs net-zero target and could meet up to a third of the nations energy needs by 2050, according to the government.
Company decisions around the extent of hydrogen usage in domestic heating and how to guarantee it is produced in a low-carbon way have actually been postponed or put out to consultation for the time being.
In this short article, Carbon Brief highlights essential points from the 121-page method and examines a few of the main talking points around the UKs hydrogen strategies.
Specialists have warned that, with hydrogen in brief supply in the coming years, the UK should prioritise it in “hard-to-electrify” sectors such as heavy industry as capacity expands.
Why does the UK need a hydrogen strategy?
Today we have actually released the UKs first Hydrogen Strategy! This is our plan to: kick-start an entire market let loose the marketplace to cut costs increase domestic production unlock ₤ 4bn of personal capital support 9k tasks #BuildBackGreenerhttps:// t.co/ aHZTr5yYeR– Kwasi Kwarteng (@KwasiKwarteng) August 17, 2021.
Business such as Equinor are pushing on with hydrogen advancements in the UK, but market figures have actually cautioned that the UK risks being left behind. Other European nations have pledged billions to support low-carbon hydrogen expansion.
In its brand-new method, the UK government makes it clear that it sees low-carbon hydrogen as a crucial part of its net-zero strategy, and states it wants the country to be a “worldwide leader on hydrogen” by 2030.
Critics likewise characterise hydrogen– most of which is presently made from gas– as a method for nonrenewable fuel source business to maintain the status quo. (For all the advantages and disadvantages of hydrogen, see Carbon Briefs extensive explainer.).
The strategy also called for a ₤ 240m net-zero hydrogen fund, the creation of a hydrogen neighbourhood heated with the gas by 2023, and increasing hydrogen mixing into gas networks to 20% to lower reliance on natural gas.
Hydrogen is widely seen as a vital part in strategies to achieve net-zero emissions and has actually been the topic of considerable hype, with many countries prioritising it in their post-Covid green recovery strategies.
Prior to the brand-new method, the prime ministers 10-point strategy in November 2020 included strategies to produce 5 gigawatts (GW) of annual low-carbon hydrogen production capacity in the UK by 2030. Presently, this capacity stands at essentially no.
The technique does not increase this target, although it keeps in mind that the federal government is “knowledgeable about a prospective pipeline of over 15GW of jobs”.
The level of hydrogen usage in 2050 envisaged by the method is somewhat higher than set out by the CCC in its most recent advice, however covers a comparable range to other research studies.
Hydrogen growth for the next years is expected to start slowly, with a government goal to “see 1GW production capability by 2025” set out in the technique.
Hydrogen demand (pink location) and percentage of last energy consumption in 2050 (%). The central variety is based upon illustrative net-zero consistent scenarios in the 6th carbon budget plan effect assessment and the complete variety is based on the entire range from hydrogen method analytical annex. Source: UK hydrogen technique.
As with most of the governments net-zero strategy files so far, the hydrogen plan has actually been postponed by months, resulting in unpredictability around the future of this recently established market.
Its flexibility indicates it can be utilized to deal with emissions in “hard-to-abate” sectors, such as heavy industry, however it presently experiences high prices and low efficiency..
Nevertheless, the Climate Change Committee (CCC) has noted that, in order to hit the UKs carbon budget plans and attain net-zero emissions, choices in areas such as decarbonising heating and automobiles need to be made in the 2020s to allow time for infrastructure and vehicle stock changes.
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 wanting to import hydrogen from abroad.
There were also over 100 recommendations to hydrogen throughout the federal governments energy white paper, reflecting its prospective usage in numerous sectors. It also features in the industrial and transport decarbonisation methods launched earlier this year.
Nevertheless, as the chart below programs, if the federal governments plans pertain to fulfillment it might then expand considerably– comprising between 20-35% of the countrys overall energy supply by 2050. This will require a major expansion of facilities and skills in the UK.
In some applications, hydrogen will contend with electrification and carbon capture and storage (CCS) as the very best means of decarbonisation.
A current All Party Parliamentary Group report on the function of hydrogen in powering market consisted of a list of demands, mentioning that the government must “broaden beyond its existing commitments of 5GW production in the upcoming hydrogen technique”. This call has actually been echoed by some market groups.
What range of low-carbon hydrogen will be prioritised?
CO2 equivalent: Greenhouse gases can be expressed in terms of carbon dioxide equivalent, or CO2eq. For an offered amount, various greenhouse gases trap different amounts of heat in the environment, an amount called the international warming capacity. Carbon dioxide equivalent is a way of comparing emissions from all greenhouse gases, not simply carbon dioxide.
The CCC has actually formerly stated that the government must “set out [a] vision for contributions of hydrogen production from different paths to 2035” in its hydrogen technique.
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 green vs blue hydrogen debate”. He says:.
CO2 equivalent: Greenhouse gases can be expressed in terms of carbon dioxide equivalent, or CO2eq. For a provided amount, different greenhouse gases trap various amounts of heat in the atmosphere, a quantity known as … Read More.
The chart below, from a file describing hydrogen expenses launched together with the main strategy, reveals the anticipated declining expense of electrolytic hydrogen in time (green lines). (This includes hydrogen made using grid electrical energy, which is not technically green unless the grid is 100% renewable.).
For its part, the CCC has actually recommended a “blue hydrogen bridge” as a helpful tool for accomplishing net-zero. It says enabling some blue hydrogen will reduce emissions faster in the short-term by replacing more nonrenewable fuel sources with hydrogen when there is inadequate green hydrogen available..
The CCC has actually alerted that policies should develop both blue and green alternatives, “instead of just whichever is least-cost”.
The federal government has actually launched a consultation on low-carbon hydrogen requirements to accompany the strategy, with a promise to “finalise design elements” of such standards by early 2022.
Jess Ralston, an analyst at thinktank the Energy and Climate Intelligence Unit (ECIU), said in a statement that the government need to “live to the threat of gas industry lobbying triggering it to devote too heavily to blue hydrogen therefore keeping the nation locked into fossil fuel-based technology”.
There was substantial pushback on this conclusion, with other researchers– including CCC head of carbon budget plans, David Joffe– pointing out that it relied on very high methane leak and a short-term procedure of worldwide warming potential that emphasised the impact of methane emissions over CO2.
This opposition capped when a current study led to headlines specifying that blue hydrogen is “even worse for the climate than coal”.
As it stands, blue hydrogen made utilizing steam methane reformation (SMR) is the most affordable low-carbon hydrogen available, according to government analysis included in the technique. (For more on the relative expenses of various hydrogen varieties, see this Carbon Brief explainer.).
It has actually likewise released an accompanying report, prepared by consultancies E4Tech and Ludwig-Bölkow-Systemtechnik (LBST), which analyzes maximum appropriate levels of emissions for low-carbon hydrogen production and the approach for determining these emissions.
Environmental groups and numerous scientists are sceptical about blue hydrogen provided its associated emissions.
In the example selected for the consultation, natural gas routes where CO2 capture rates are below around 85% were left out..
The CCC has formerly defined “appropriate emissions decreases” for blue hydrogen compared to fossil gas as “a minimum of 95% CO2 capture, 85% lifecycle greenhouse gas cost savings”.
The former is basically zero-carbon, but the latter can still lead to emissions due to methane leakages from natural gas infrastructure and the truth that carbon capture and storage (CCS) does not catch 100% of emissions..
The strategy notes that, in some cases, hydrogen made utilizing electrolysers “might become cost-competitive with CCUS [carbon utilisation, storage and capture] -made it possible for methane reformation as early as 2025”..
Supporting a range of jobs will give the UK a “competitive advantage”, according to the government. Germany, by contrast, has stated it will focus solely on green hydrogen.
Brief (hopefully) reflecting on this blue hydrogen thing. And then cherry-picked a climate metric to make it look as bad as possible.
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 main consider market development”.
Green hydrogen is used electrolysers powered by sustainable electrical power, while blue hydrogen is made utilizing natural gas, with the resulting emissions captured and kept..
The figure listed 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 techniques above the red line, consisting of some for producing blue hydrogen, would be left out.
The brand-new technique largely avoids utilizing this colour-coding system, but it says the federal government has dedicated to a “twin track” approach that will include the production of both ranges.
At the heart of numerous discussions about low-carbon hydrogen production is whether the hydrogen is “green” or “blue”.
The method specifies that the proportion of hydrogen supplied by specific innovations “depends on a range of assumptions, which can just be evaluated through the marketplaces reaction to the policies set out in this technique and real, at-scale deployment of hydrogen”..
” If we desire to demonstrate, trial, begin to commercialise and then present the usage of hydrogen in industry/air travel/freight or anywhere, then we need enough hydrogen. We cant wait till the supply side considerations are total.”.
The document does refrain from doing that and instead states it will provide “further detail on our production method and twin track technique by early 2022”.
Contrast of rate quotes throughout different innovation types at central fuel prices commissioning from 2020 to 2050, ₤/ MWh hydrogen. Source: Hydrogen Production Costs.
How will hydrogen be utilized in various sectors of the economy?
In the real report, the government stated that it anticipated “overall the need for low carbon hydrogen for heating by 2030 to be reasonably low (<< 1TWh)".. " As the method admits, there will not be substantial amounts of low-carbon hydrogen for some time. Call for proof on "hydrogen-ready" industrial devices by the end of 2021. Call for evidence on phaseout of carbon-intensive hydrogen production in industry "within a year". Phase 2 of the ₤ 315m Industrial Energy Transformation Fund.A ₤ 55 million Industrial Fuel Switching 2 competitors in 2021. The committee emphasises that hydrogen use ought to be limited to "locations less fit to electrification, particularly shipping and parts of industry" and providing versatility to the power system. Michael Liebrich of Liebreich Associates has organised making use of low-carbon hydrogen into a "ladder", with present applications-- such as the chemicals market-- provided leading priority. It contains prepare for hydrogen heating trials and assessment on "hydrogen-ready" boilers by 2026. Commitments made in the brand-new method consist of:. One significant exemption is hydrogen for fuel-cell automobile. This is constant with the governments focus on electrical cars, which many researchers consider as more affordable and effective innovation. " Stronger signals of intent could guide personal and public financial investments into those locations which add most value. The government has not clearly set out how to choose which sectors will take advantage of the initial planned 5GW of production and has instead largely left this to be identified through trials and pilots.". 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 tidy hydrogen into some sort of merit order, due to the fact that not all use cases are similarly likely to prosper. 1/10 pic.twitter.com/I8HpqQjlKS— Michael Liebreich (@MLiebreich) August 15, 2021. Government analysis, included in the technique, suggests potential hydrogen need of up to 38 terawatt-hours (TWh) by 2030, not including blending it into the gas grid, and increasing to 55-165TWh by 2035. The new method is clear that market will be a "lead choice" for early hydrogen usage, starting in the mid-2020s. It likewise says that it will "likely" be important for decarbonising transportation-- particularly heavy goods cars, shipping and air travel-- and balancing a more renewables-heavy grid. Some applications, such as industrial heating, might be essentially impossible without a supply of hydrogen, and many experts have argued that these hold true where it should be prioritised, a minimum of in the short term. The government is more positive about making use of hydrogen in domestic heating. Its analysis recommends that as much as 45TWh of low-carbon hydrogen could be put to this usage by 2035, as the chart below shows. Reacting to the report, energy scientists indicated the "small" volumes of hydrogen expected to be produced in the near future and advised the federal government to pick its priorities thoroughly. Juliet Phillips, senior policy advisor and UK hydrogen expert at thinktank E3G informs Carbon Brief the strategy had "left open" the door for uses that "do not add the most value for the environment or economy". She adds:. Protection of the report and federal government advertising materials emphasised that the governments strategy would offer sufficient hydrogen to replace gas in around 3m houses each year. Low-carbon hydrogen can be used to do whatever from fuelling automobiles to heating houses, the truth is that it will likely be limited by the volume that can probably be produced. This is in line with the CCCs suggestion 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. However, the beginning point for the range-- 0TWh-- recommends there is considerable unpredictability compared to other sectors, and even the highest price quote is just around a 10th of the energy currently used to heat UK homes. Illustrative hydrogen demand in 2030 (blue) and 2035 (purple). Source: UK hydrogen method. The CCC does not see substantial usage of hydrogen beyond these minimal cases by 2035, as the chart listed below shows. The method likewise consists of the choice of utilizing hydrogen in sectors that may be better served by electrification, especially domestic heating, where hydrogen has to complete with electrical heat pumps.. 4) On page 62 the hydrogen technique states that the government expects << 1 TWh of energy for heating to come from hydrogen by 2030. Present energy need in the UK for area and warm 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 development of feasibility studies in the coming years, and the governments upcoming heat and structures method may also offer some clarity. Lastly, in order to develop a market for hydrogen, the federal government says 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. Gniewomir Flis, a job supervisor at Agora Energiewende, tells Carbon Brief that-- in his view-- blending "has no future". He discusses:. " I would suggest to choose these no-regret choices for hydrogen demand [in market] that are currently available ... those ought to be the focus.". How does the federal government strategy to support the hydrogen industry? Nevertheless, Anne-Marie Trevelyan-- minister for energy, clean development and climate change at BEIS-- informed the Times that the expense to provide long-term security to the industry would be "very little" for private families. Hydrogen need (pink location) and proportion of last 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 industry "within a year"." As the strategy admits, there wont be substantial amounts of low-carbon hydrogen for some time. 4) On page 62 the hydrogen method specifies that the government expects << 1 TWh of energy for heating to come from hydrogen by 2030. Much of the resulting press protection of the hydrogen technique, from the Financial Times to the Daily Telegraph, concentrated on the strategy for a hydrogen industry "subsidised by taxpayers", as the cash would originate from either higher bills or public funds. Sharelines from this story. " This will give us a better understanding of the mix of production technologies, how we will fulfill a ramp-up in demand, and the function that new technologies might play in attaining the levels of production needed to satisfy our future [sixth carbon budget plan] and net-zero dedications.". These agreements are designed to overcome the cost gap in between the favored innovation and fossil fuels. Hydrogen producers would be given a payment that bridges this gap. The brand-new hydrogen strategy verifies that this organization model will be settled in 2022, making it possible for the first contracts to be allocated from the start of 2023. This is pending another assessment, which has actually been introduced along with the primary strategy. As it stands, low-carbon hydrogen stays expensive compared to fossil fuel alternatives, there is uncertainty about the level of future need and high threats for business intending to go into the sector. Now that its strategy has actually been released, the government states it will collect proof from assessments on its low-carbon hydrogen requirement, net-zero hydrogen fund and business design:. The 10-point plan included a promise to establish a hydrogen business design to motivate personal investment and an income system to supply financing for business design. According to the governments news release, its favored model is "built on a comparable facility to the overseas wind agreements for distinction (CfDs)", which significantly cut expenses of brand-new overseas wind farms.