In-depth Q&A: How will the UK’s hydrogen strategy help achieve net-zero?
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Specialists have cautioned that, with hydrogen in brief supply in the coming years, the UK should prioritise it in “hard-to-electrify” sectors such as heavy market as capability expands.
Company decisions around the level of hydrogen usage in domestic heating and how to ensure it is produced in a low-carbon method have actually been postponed or put out to consultation for the time being.
The UKs new, long-awaited hydrogen strategy provides more information on how the government will support the advancement of a domestic low-carbon hydrogen sector, which today is essentially non-existent.
Hydrogen will be “important” for attaining the UKs net-zero target and might meet up to a third of the nations energy needs by 2050, according to the government.
Why does the UK need a hydrogen strategy?
Nevertheless, the Climate Change Committee (CCC) has noted that, in order to hit the UKs carbon budgets and achieve net-zero emissions, choices in areas such as decarbonising heating and vehicles need to be made in the 2020s to allow time for facilities and vehicle stock changes.
The document contains an expedition of how the UK will expand production and create a market for hydrogen based upon domestic supply chains. This contrasts with Germany, which has been aiming to import hydrogen from abroad.
In some applications, hydrogen will take on electrification and carbon capture and storage (CCS) as the very best means of decarbonisation.
Its flexibility suggests it can be utilized to deal with emissions in “hard-to-abate” sectors, such as heavy industry, however it currently experiences high costs and low performance..
The technique does not increase this target, although it notes that the government is “familiar with a possible pipeline of over 15GW of jobs”.
The strategy also required a ₤ 240m net-zero hydrogen fund, the creation of a hydrogen area heated with the gas by 2023, and increasing hydrogen blending into gas networks to 20% to reduce dependence on natural gas.
Critics also characterise hydrogen– many of which is presently made from gas– as a method for nonrenewable fuel source companies to keep the status quo. (For all the benefits and drawbacks of hydrogen, see Carbon Briefs extensive explainer.).
Hydrogen demand (pink location) and percentage of last energy consumption in 2050 (%). The central range is based upon illustrative net-zero consistent situations in the 6th carbon spending plan impact evaluation and the full variety is based upon the whole variety from hydrogen technique analytical annex. Source: UK hydrogen strategy.
There were also over 100 referrals to hydrogen throughout the federal governments energy white paper, reflecting its potential usage in lots of sectors. It likewise includes in the commercial and transportation decarbonisation methods released earlier this year.
Today we have actually released the UKs very first Hydrogen Strategy! This is our plan to: kick-start an entire industry release the market to cut costs increase domestic production unlock ₤ 4bn of personal capital assistance 9k tasks #BuildBackGreenerhttps:// t.co/ aHZTr5yYeR– Kwasi Kwarteng (@KwasiKwarteng) August 17, 2021.
As the chart below shows, if the federal governments plans come to fulfillment it might then expand substantially– making up between 20-35% of the nations total energy supply by 2050. This will need a significant growth of infrastructure and abilities in the UK.
A recent All Party Parliamentary Group report on the role of hydrogen in powering industry included a list of needs, mentioning that the government should “broaden beyond its existing dedications of 5GW production in the upcoming hydrogen technique”. This call has actually been echoed by some market groups.
Prior to the brand-new technique, the prime ministers 10-point strategy in November 2020 consisted of plans to produce 5 gigawatts (GW) of yearly low-carbon hydrogen production capability in the UK by 2030. Currently, this capability stands at essentially zero.
Hydrogen growth for the next decade is anticipated to start slowly, with a federal government aspiration to “see 1GW production capability by 2025” laid out in the technique.
Hydrogen is extensively viewed as a crucial element in plans to accomplish net-zero emissions and has been the topic of substantial buzz, with lots of countries prioritising it in their post-Covid green recovery strategies.
In its new method, the UK government makes it clear that it sees low-carbon hydrogen as a key part of its net-zero strategy, and states it desires the country to be a “global leader on hydrogen” by 2030.
Business such as Equinor are pushing on with hydrogen advancements in the UK, but market figures have actually cautioned that the UK threats being left. Other European countries have promised billions to support low-carbon hydrogen growth.
As with many of the federal governments net-zero method files so far, the hydrogen strategy has actually been postponed by months, resulting in unpredictability around the future of this recently established market.
The level of hydrogen use in 2050 envisaged by the strategy is rather higher than set out by the CCC in its latest suggestions, but covers a similar variety to other research studies.
What variety of low-carbon hydrogen will be prioritised?
Supporting a variety of projects will provide the UK a “competitive advantage”, according to the federal government. Germany, by contrast, has stated it will focus specifically on green hydrogen.
It has actually also 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 calculating these emissions.
As it stands, blue hydrogen made utilizing steam methane reformation (SMR) is the least expensive low-carbon hydrogen offered, according to government analysis consisted of in the technique. (For more on the relative costs of different hydrogen varieties, see this Carbon Brief explainer.).
The technique mentions that the proportion of hydrogen supplied by particular technologies “depends on a variety of assumptions, which can just be checked through the markets response to the policies set out in this method and genuine, at-scale release of hydrogen”..
Environmental groups and numerous researchers are sceptical about blue hydrogen given its associated emissions.
The file does not do that and rather states it will offer “additional information on our production method and twin track method by early 2022”.
The figure below from the consultation, based on this analysis, reveals the impact 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 omitted.
Contrast of cost estimates across various innovation types at central fuel costs commissioning from 2020 to 2050, ₤/ MWh hydrogen. Source: Hydrogen Production Costs.
2021.
The new technique largely prevents using this colour-coding system, however it says the government has committed to a “twin track” method that will consist of the production of both varieties.
In the example picked for the assessment, gas paths where CO2 capture rates are listed below around 85% were excluded..
” If we desire to demonstrate, trial, start to commercialise and then roll out making use of hydrogen in industry/air travel/freight or any place, then we require enough hydrogen. We cant wait until the supply side considerations are total.”.
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 “consider carbon intensity as the primary element in market advancement”.
Glossary.
The chart below, from a document describing hydrogen expenses released alongside the primary method, shows the anticipated decreasing cost of electrolytic hydrogen gradually (green lines). (This includes hydrogen used grid electrical energy, which is not technically green unless the grid is 100% eco-friendly.).
Nevertheless, there was substantial pushback on this conclusion, with other researchers– including CCC head of carbon budgets, David Joffe– pointing out that it counted on very high methane leak and a short-term procedure of global warming potential that stressed the impact of methane emissions over CO2.
Jess Ralston, an expert at thinktank the Energy and Climate Intelligence Unit (ECIU), stated in a statement that the government should “be alive to the risk of gas market lobbying triggering it to dedicate too heavily to blue hydrogen therefore keeping the country locked into fossil fuel-based technology”.
The federal government has actually released a consultation on low-carbon hydrogen standards to accompany the method, with a promise to “finalise design aspects” of such requirements by early 2022.
Close.
CO2 equivalent: Greenhouse gases can be revealed in terms of carbon dioxide equivalent, or CO2eq. For a provided amount, various greenhouse gases trap various quantities of heat in the atmosphere, an amount understood as … Read More.
The former is basically zero-carbon, but the latter can still result in emissions due to methane leakages from natural gas infrastructure and the fact that carbon capture and storage (CCS) does not record 100% of emissions..
CO2 equivalent: Greenhouse gases can be expressed in terms of carbon dioxide equivalent, or CO2eq. For an offered amount, different greenhouse gases trap various amounts of heat in the atmosphere, an amount referred to as the global warming potential. Carbon dioxide equivalent is a way of comparing emissions from all greenhouse gases, not simply carbon dioxide.
The CCC has actually previously mentioned that the government should “set out [a] vision for contributions of hydrogen production from various routes to 2035” in its hydrogen method.
Prof Robert Gross, director of the UK Energy Research Centre, informs Carbon Brief that, in his view, it is “most likely a bit unhelpful to get too preoccupied with the blue vs green hydrogen argument”. He states:.
Quick (hopefully) assessing this blue hydrogen thing. Generally, the papers calculations potentially represent a case where blue H ₂ is done really badly & & without any reasonable guidelines. And after that cherry-picked an environment metric to make it look as bad as possible. https://t.co/Jx0FdDfdx5— David Joffe (@david_joffe) August 13, 2021.
The CCC has actually formerly defined “appropriate emissions reductions” for blue hydrogen compared to fossil gas as “at least 95% CO2 capture, 85% lifecycle greenhouse gas savings”.
The strategy keeps in mind that, sometimes, hydrogen made utilizing electrolysers “could end up being cost-competitive with CCUS [carbon utilisation, storage and capture] -made it possible for methane reformation as early as 2025”..
At the heart of lots of discussions about low-carbon hydrogen production is whether the hydrogen is “green” or “blue”.
Green hydrogen is made using electrolysers powered by renewable electricity, while blue hydrogen is made using natural gas, with the resulting emissions captured and saved..
For its part, the CCC has actually recommended a “blue hydrogen bridge” as an useful tool for attaining net-zero. It states permitting some blue hydrogen will reduce emissions faster in the short-term by replacing more fossil fuels with hydrogen when there is not enough green hydrogen readily available..
The CCC has cautioned that policies need to establish both blue and green alternatives, “rather than just whichever is least-cost”.
This opposition came to a head when a recent study caused headlines specifying that blue hydrogen is “worse for the environment than coal”.
How will hydrogen be used in various sectors of the economy?
However, the beginning point for the variety– 0TWh– recommends there is significant uncertainty compared to other sectors, and even the greatest estimate is just around a 10th of the energy presently used to heat UK houses.
The new method is clear that market will be a “lead choice” for early hydrogen use, beginning in the mid-2020s. It likewise says that it will “likely” be essential for decarbonising transport– especially heavy goods automobiles, shipping and air travel– and stabilizing a more renewables-heavy grid.
Call for evidence on “hydrogen-ready” commercial equipment by the end of 2021. Require 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.
It contains strategies for hydrogen heating trials and assessment on “hydrogen-ready” boilers by 2026.
Illustrative hydrogen demand in 2030 (blue) and 2035 (purple). Source: UK hydrogen strategy.
Some applications, such as commercial heating, may be practically difficult without a supply of hydrogen, and many specialists have actually argued that these hold true where it need to be prioritised, at least in the short term.
Juliet Phillips, senior policy consultant and UK hydrogen specialist at thinktank E3G informs Carbon Brief the strategy had “left open” the door for uses that “dont include the most value for the environment or economy”. She includes:.
Government analysis, included in the method, recommends possible hydrogen demand of up to 38 terawatt-hours (TWh) by 2030, not consisting of blending it into the gas grid, and increasing to 55-165TWh by 2035.
The strategy also consists of the alternative of utilizing hydrogen in sectors that may be much better served by electrification, particularly domestic heating, where hydrogen has to contend with electrical heat pumps..
” Stronger signals of intent could guide private and public investments into those areas which include most worth. The federal government has not plainly laid out how to pick which sectors will benefit from the preliminary organized 5GW of production and has instead mainly left this to be determined through trials and pilots.”.
” As the method confesses, there will not be considerable amounts of low-carbon hydrogen for a long time. [] we require to use it where there are few alternatives and not as a like-for-like replacement of gas,” Dr Jan Rosenow, director of European programs at the Regulatory Assistance Project, in a declaration.
Protection of the report and government promotional products emphasised that the federal governments strategy would provide adequate hydrogen to change gas in around 3m homes each year.
Dedications made in the brand-new method consist of:.
The government is more positive about using hydrogen in domestic heating. Its analysis recommends that as much as 45TWh of low-carbon hydrogen might be put to this use by 2035, as the chart listed below indicates.
Low-carbon hydrogen can be used to do whatever 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.
So, my lovelies, I just dropped Version 4 of the Clean Hydrogen Ladder! For anybody new to all this, the ladder is my effort to put use 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.
One significant exclusion is hydrogen for fuel-cell automobile. This is consistent with the federal governments concentrate on electric cars and trucks, which many scientists deem more economical and effective technology.
The CCC does not see substantial usage of hydrogen beyond these restricted cases by 2035, as the chart below programs.
The committee emphasises that hydrogen usage ought to be restricted to “locations less suited to electrification, especially delivering and parts of industry” and supplying flexibility to the power system.
Michael Liebrich of Liebreich Associates has organised the usage of low-carbon hydrogen into a “ladder”, with existing applications– such as the chemicals market– offered top priority.
Reacting to the report, energy researchers indicated the “small” volumes of hydrogen expected to be produced in the near future and urged the federal government to select its concerns thoroughly.
In the real report, the federal government stated that it anticipated “in general the demand for low carbon hydrogen for heating by 2030 to be fairly low (<< 1TWh)".. This is in line with the CCCs suggestion for its net-zero path, which sees low-carbon hydrogen scaling approximately 90TWh by 2035-- around a 3rd of the size of the existing power sector. 4) On page 62 the hydrogen strategy specifies that the government anticipates << 1 TWh of energy for heating to come from hydrogen by 2030. 1 TWh is 0.2%. In order to create a market for hydrogen, the federal government states it will take a look at mixing up to 20% hydrogen into the gas network by late 2022 and aim to make a last choice in late 2023. Much will depend upon the development of expediency research studies in the coming years, and the federal governments upcoming heat and buildings technique may also supply some clearness. " I would suggest to opt for these no-regret options for hydrogen demand [in market] that are currently available ... those must be the focus.". Gniewomir Flis, a task manager at Agora Energiewende, tells Carbon Brief that-- in his view-- blending "has no future". He describes:. How does the government plan to support the hydrogen industry? The 10-point strategy included a promise to develop a hydrogen organization model to encourage private financial investment and an income system to offer financing for business design. The new hydrogen method validates that this organization model will be settled in 2022, enabling the very first agreements to be assigned from the start of 2023. This is pending another assessment, which has actually been released along with the primary technique. Now that its strategy has been released, the federal government says it will collect evidence from assessments on its low-carbon hydrogen standard, net-zero hydrogen fund and the service model:. According to the federal governments news release, its favored model is "constructed on a comparable premise to the offshore wind contracts for difference (CfDs)", which considerably cut costs of brand-new offshore wind farms. These contracts are developed to overcome the expense gap in between the preferred innovation and fossil fuels. Hydrogen producers would be provided a payment that bridges this gap. Hydrogen demand (pink location) and percentage 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 market "within a year"." As the technique confesses, there will not be significant quantities of low-carbon hydrogen for some time. 4) On page 62 the hydrogen method mentions that the government expects << 1 TWh of energy for heating to come from hydrogen by 2030. " This will offer us a better understanding of the mix of production technologies, how we will satisfy a ramp-up in need, and the function that new innovations might play in achieving the levels of production necessary to satisfy our future [6th carbon budget] and net-zero commitments.". Anne-Marie Trevelyan-- minister for energy, clean development and environment modification at BEIS-- informed the Times that the cost to provide long-lasting security to the market would be "extremely small" for specific families. 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 prepare for a hydrogen industry "subsidised by taxpayers", as the cash would originate from either greater expenses or public funds. As it stands, low-carbon hydrogen stays expensive compared to nonrenewable fuel source options, there is unpredictability about the level of future need and high risks for companies intending to enter the sector.