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

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

Meanwhile, company decisions around the extent of hydrogen use in domestic heating and how to ensure it is produced in a low-carbon method have been delayed or put out to consultation for the time being.

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 market as capacity expands.

Hydrogen will be “crucial” for attaining the UKs net-zero target and could satisfy up to a 3rd of the nations energy needs by 2050, according to the government.

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

Why does the UK require a hydrogen strategy?

The level of hydrogen use in 2050 imagined by the technique is rather greater than set out by the CCC in its latest guidance, however covers a similar range to other research studies.

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

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

Business such as Equinor are continuing with hydrogen developments in the UK, but industry figures have cautioned that the UK risks being left behind. Other European nations have actually vowed billions to support low-carbon hydrogen expansion.

Hydrogen is commonly viewed as an important element in plans to achieve net-zero emissions and has been the subject of significant buzz, with numerous nations prioritising it in their post-Covid green recovery strategies.

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

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

Prior to the new method, the prime ministers 10-point plan in November 2020 included strategies to produce 5 gigawatts (GW) of annual low-carbon hydrogen production capability in the UK by 2030. Presently, this capacity stands at essentially no.

Critics likewise characterise hydrogen– most of which is presently made from gas– as a method for fossil fuel companies to preserve the status quo. (For all the benefits and drawbacks of hydrogen, see Carbon Briefs extensive explainer.).

Its flexibility indicates it can be used to take on emissions in “hard-to-abate” sectors, such as heavy industry, but it currently suffers from high rates and low efficiency..

Hydrogen need (pink area) and percentage of last energy consumption in 2050 (%). The central variety is based upon illustrative net-zero consistent situations in the sixth carbon budget plan impact assessment and the complete range is based on the entire range from hydrogen strategy analytical annex. Source: UK hydrogen strategy.

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

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

However, similar to most of the federal governments net-zero technique files up until now, the hydrogen strategy has actually been postponed by months, leading to unpredictability around the future of this recently established market.

The plan likewise required a ₤ 240m net-zero hydrogen fund, the creation of a hydrogen neighbourhood heated up with the gas by 2023, and increasing hydrogen mixing into gas networks to 20% to lower reliance on gas.

However, as the chart below programs, if the federal governments plans come to fruition it could then expand significantly– making up in between 20-35% of the nations total energy supply by 2050. This will need a significant expansion of infrastructure and skills in the UK.

There were likewise over 100 references to hydrogen throughout the governments energy white paper, reflecting its potential use in many sectors. It likewise includes in the commercial and transport decarbonisation methods launched earlier this year.

The Climate Change Committee (CCC) has actually kept in mind that, in order to strike the UKs carbon budgets and achieve net-zero emissions, decisions in areas such as decarbonising heating and lorries require to be made in the 2020s to permit time for facilities and car stock changes.

The file includes an exploration of how the UK will expand 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.

What range of low-carbon hydrogen will be prioritised?

The new technique mostly prevents utilizing this colour-coding system, but it says the government has committed to a “twin track” approach that will consist of the production of both ranges.

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

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 green vs blue hydrogen debate”. He states:.

The chart below, from a document describing hydrogen expenses released together with the main technique, shows the anticipated declining cost of electrolytic hydrogen gradually (green lines). (This includes hydrogen made utilizing grid electrical power, which is not technically green unless the grid is 100% sustainable.).

” If we desire to show, trial, begin to commercialise and then roll out making 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.”.

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

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

The government has released an assessment on low-carbon hydrogen standards to accompany the strategy, with a promise to “settle style elements” of such standards by early 2022.

Brief (hopefully) reflecting on this blue hydrogen thing. And then cherry-picked an environment metric to make it look as bad as possible.

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

Close.
CO2 equivalent: Greenhouse gases can be expressed in terms of carbon dioxide equivalent, or CO2eq. For a provided quantity, different greenhouse gases trap various amounts of heat in the atmosphere, a quantity called … Read More.

The document does not do that and instead says it will provide “additional information on our production method and twin track technique by early 2022”.

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

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

Green hydrogen is used electrolysers powered by renewable electrical power, while blue hydrogen is made utilizing natural gas, with the resulting emissions captured and kept..

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

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 intensity as the primary consider market development”.

As it stands, blue hydrogen made using steam methane reformation (SMR) is the most inexpensive low-carbon hydrogen available, according to federal government analysis included in the strategy. (For more on the relative costs of different hydrogen varieties, see this Carbon Brief explainer.).

CO2 equivalent: Greenhouse gases can be revealed in regards to co2 equivalent, or CO2eq. For an offered quantity, various greenhouse gases trap different amounts of heat in the atmosphere, a quantity referred to as the international warming capacity. Co2 equivalent is a way of comparing emissions from all greenhouse gases, not simply carbon dioxide.

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

The technique specifies that the percentage of hydrogen supplied by particular innovations “depends upon a variety of assumptions, which can just be checked through the markets reaction to the policies set out in this strategy and genuine, at-scale release of hydrogen”..

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

Supporting a variety of jobs will offer the UK a “competitive benefit”, according to the government. Germany, by contrast, has said it will focus exclusively on green hydrogen.

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

The CCC has alerted that policies need to establish both blue and green options, “rather than just whichever is least-cost”.

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

Glossary.

Jess Ralston, an expert at thinktank the Energy and Climate Intelligence Unit (ECIU), said in a declaration that the federal government must “be alive to the danger of gas market lobbying causing it to dedicate too heavily to blue hydrogen and so keeping the country locked into fossil fuel-based technology”.

The CCC has actually previously stated that the federal government must “set out [a] vision for contributions of hydrogen production from various paths to 2035” in its hydrogen method.

For its part, the CCC has actually suggested a “blue hydrogen bridge” as an useful tool for achieving net-zero. It states allowing some blue hydrogen will decrease emissions quicker in the short-term by replacing more nonrenewable fuel sources with hydrogen when there is inadequate green hydrogen offered..

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

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– given top priority.

Dedications made in the brand-new technique include:.

However, the beginning point for the range– 0TWh– suggests there is considerable uncertainty compared to other sectors, and even the greatest quote is only around a 10th of the energy presently used to heat UK homes.

Juliet Phillips, senior policy advisor and UK hydrogen specialist at thinktank E3G informs Carbon Brief the strategy had “left open” the door for uses that “do not include the most worth for the environment or economy”. She includes:.

Responding to the report, energy researchers pointed to the “little” volumes of hydrogen anticipated to be produced in the near future and advised the federal government to select its priorities thoroughly.

The committee stresses that hydrogen usage ought to be restricted to “areas less fit to electrification, especially shipping and parts of market” and supplying versatility to the power system.

The government is more optimistic about the usage 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 listed below suggests.

Some applications, such as industrial heating, might be essentially difficult without a supply of hydrogen, and many specialists have actually argued that these are the cases where it should be prioritised, a minimum of in the short-term.

Nevertheless, in the real report, the federal government stated that it expected “overall the need for low carbon hydrogen for heating by 2030 to be reasonably low (<< 1TWh)".. The CCC does not see extensive use of hydrogen outside of these limited cases by 2035, as the chart below programs. It contains strategies for hydrogen heating trials and consultation on "hydrogen-ready" boilers by 2026. Coverage of the report and government marketing products emphasised that the federal governments strategy would supply sufficient hydrogen to change gas in around 3m homes each year. " Stronger signals of intent might steer public and personal financial investments into those areas which include most worth. The government has not plainly set out how to decide upon which sectors will gain from the initial organized 5GW of production and has instead largely left this to be determined through trials and pilots.". Illustrative hydrogen demand in 2030 (blue) and 2035 (purple). Source: UK hydrogen method. " As the strategy admits, there wont be significant quantities of low-carbon hydrogen for a long time. [] we require to use it where there are couple of 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 statement. 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 use cases for tidy hydrogen into some sort of merit order, since not all use cases are equally most likely to prosper. 1/10 pic.twitter.com/I8HpqQjlKS— Michael Liebreich (@MLiebreich) August 15, 2021. Call for proof on "hydrogen-ready" commercial equipment by the end of 2021. Require evidence 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 competition in 2021. One notable exemption is hydrogen for fuel-cell traveler cars and trucks. This is constant with the federal governments focus on electric automobiles, which numerous researchers deem more affordable and efficient innovation. 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 third of the size of the present power sector. Low-carbon hydrogen can be used to do everything from sustaining cars and trucks to heating houses, the truth is that it will likely be limited by the volume that can probably be produced. The brand-new method is clear that industry will be a "lead alternative" for early hydrogen usage, beginning in the mid-2020s. It also says that it will "likely" be very important for decarbonising transportation-- particularly heavy goods lorries, shipping and air travel-- and stabilizing a more renewables-heavy grid. The technique likewise includes the option of utilizing hydrogen in sectors that might be much better served by electrification, especially domestic heating, where hydrogen has to contend with electrical heat pumps.. Government analysis, included in the method, suggests prospective hydrogen need of as much as 38 terawatt-hours (TWh) by 2030, not consisting of blending it into the gas grid, and rising to 55-165TWh by 2035. 4) On page 62 the hydrogen method mentions that the government anticipates << 1 TWh of energy for heating to come from hydrogen by 2030. 1 TWh is 0.2%. Finally, in order to produce a market for hydrogen, the government states it will analyze blending approximately 20% hydrogen into the gas network by late 2022 and objective to make a final decision in late 2023. " I would suggest to choose these no-regret choices for hydrogen need [in market] that are currently readily available ... those need to be the focus.". Much will hinge on the progress of expediency studies in the coming years, and the federal governments approaching heat and structures strategy might also supply some clearness. Gniewomir Flis, a job manager at Agora Energiewende, tells Carbon Brief that-- in his view-- mixing "has no future". He describes:. How does the federal government strategy to support the hydrogen industry? Hydrogen need (pink area) and proportion of final energy consumption 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 method confesses, there will not be significant amounts of low-carbon hydrogen for some time. 4) On page 62 the hydrogen technique states that the government anticipates << 1 TWh of energy for heating to come from hydrogen by 2030. The new hydrogen strategy validates that this company design will be settled in 2022, making it possible for the first contracts to be assigned from the start of 2023. This is pending another assessment, which has actually been introduced along with the primary technique. These agreements are developed to overcome the cost gap between the favored technology and fossil fuels. Hydrogen producers would be provided a payment that bridges this space. " This will offer us a much better understanding of the mix of production technologies, how we will meet a ramp-up in demand, and the role that new innovations could play in achieving the levels of production necessary to fulfill our future [sixth carbon budget plan] and net-zero commitments.". Anne-Marie Trevelyan-- minister for energy, tidy development and climate modification at BEIS-- informed the Times that the expense to provide long-term security to the industry would be "very little" for specific households. 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 threats for companies aiming to get in the sector. According to the federal governments press release, its favored design is "built on a comparable property to the offshore wind agreements for difference (CfDs)", which considerably cut costs of new offshore wind farms. Sharelines from this story. The 10-point plan consisted of a promise to develop a hydrogen organization model to motivate private financial investment and a profits system to offer financing for business design. Now that its method has actually been released, the government says it will collect evidence from consultations on its low-carbon hydrogen standard, net-zero hydrogen fund and business design:. Much of the resulting press coverage of the hydrogen strategy, from the Financial Times to the Daily Telegraph, focused on the plan for a hydrogen market "subsidised by taxpayers", as the cash would come from either higher costs or public funds.