In-depth Q&A: How will the UK’s hydrogen strategy help achieve net-zero?
The UKs new, long-awaited hydrogen strategy supplies more detail on how the federal government will support the advancement of a domestic low-carbon hydrogen sector, which today is essentially non-existent.
In this post, Carbon Brief highlights bottom lines from the 121-page strategy and analyzes some of the primary talking points around the UKs hydrogen plans.
Specialists have actually alerted 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 capacity expands.
Hydrogen will be “critical” for attaining the UKs net-zero target and could satisfy up to a third of the countrys energy requirements by 2050, according to the federal government.
Meanwhile, firm decisions around the degree of hydrogen use in domestic heating and how to ensure it is produced in a low-carbon way have actually been delayed or put out to consultation for the time being.
Why does the UK need a hydrogen method?
The technique does not increase this target, although it keeps in mind that the government is “knowledgeable about a potential pipeline of over 15GW of tasks”.
The strategy also called for a ₤ 240m net-zero hydrogen fund, the creation of a hydrogen area heated up with the gas by 2023, and increasing hydrogen blending into gas networks to 20% to minimize reliance on natural gas.
Its flexibility suggests it can be used to take on emissions in “hard-to-abate” sectors, such as heavy industry, however it currently experiences high prices and low efficiency..
Hydrogen need (pink location) and proportion of final energy consumption in 2050 (%). The central range is based on illustrative net-zero constant scenarios in the 6th carbon spending plan impact assessment and the full variety is based upon the entire variety from hydrogen technique analytical annex. Source: UK hydrogen method.
A recent All Party Parliamentary Group report on the function of hydrogen in powering industry consisted of a list of needs, specifying that the government needs to “expand beyond its existing dedications of 5GW production in the upcoming hydrogen method”. This call has been echoed by some market groups.
However, as with most of the governments net-zero strategy documents so far, the hydrogen plan has been delayed by months, resulting in uncertainty around the future of this fledgling market.
Hydrogen development for the next years is expected to begin gradually, with a federal government aspiration to “see 1GW production capability by 2025” set out in the technique.
The Climate Change Committee (CCC) has actually noted that, in order to strike the UKs carbon budget plans and achieve net-zero emissions, choices in areas such as decarbonising heating and lorries require to be made in the 2020s to permit time for infrastructure and car stock modifications.
The document contains an expedition of how the UK will expand production and create a market for hydrogen based on domestic supply chains. This contrasts with Germany, which has been aiming to import hydrogen from abroad.
The level of hydrogen use in 2050 imagined by the method is rather higher than set out by the CCC in its most current advice, however covers a similar range to other research studies.
There were likewise over 100 references to hydrogen throughout the governments energy white paper, showing its possible usage in lots of sectors. It also includes in the commercial and transport decarbonisation methods released previously this year.
Hydrogen is widely seen as a vital part in strategies to accomplish net-zero emissions and has been the subject of considerable buzz, with numerous countries prioritising it in their post-Covid green recovery plans.
Critics likewise characterise hydrogen– the majority of which is currently made from gas– as a way for fossil fuel companies to keep the status quo. (For all the advantages and drawbacks of hydrogen, see Carbon Briefs thorough explainer.).
Nevertheless, as the chart below shows, if the governments plans come to fulfillment it might then broaden considerably– comprising between 20-35% of the countrys total energy supply by 2050. This will need a major growth of infrastructure and abilities in the UK.
Business such as Equinor are pressing on with hydrogen advancements in the UK, but market figures have alerted that the UK risks being left. Other European countries have vowed billions to support low-carbon hydrogen growth.
In some applications, hydrogen will take on electrification and carbon capture and storage (CCS) as the very best methods of decarbonisation.
Prior to the brand-new method, the prime ministers 10-point plan in November 2020 consisted of strategies to produce five gigawatts (GW) of annual low-carbon hydrogen production capacity in the UK by 2030. Currently, this capability stands at essentially absolutely no.
In its brand-new technique, the UK government makes it clear that it sees low-carbon hydrogen as a key part of its net-zero plan, and says it wants the country to be a “international leader on hydrogen” by 2030.
Today we have published the UKs first Hydrogen Strategy! This is our plan to: kick-start an entire industry release the marketplace to cut expenses increase domestic production unlock ₤ 4bn of personal capital assistance 9k jobs #BuildBackGreenerhttps:// t.co/ aHZTr5yYeR– Kwasi Kwarteng (@KwasiKwarteng) August 17, 2021.
What range of low-carbon hydrogen will be prioritised?
The new strategy mostly avoids using this colour-coding system, but it says the government has committed to a “twin track” approach that will consist of the production of both varieties.
However, there was substantial pushback on this conclusion, with other researchers– including CCC head of carbon budget plans, David Joffe– mentioning that it relied on really high methane leak and a short-term step of worldwide warming potential that emphasised the effect of methane emissions over CO2.
The CCC has actually alerted that policies must develop both blue and green options, “rather than just whichever is least-cost”.
At the heart of numerous discussions about low-carbon hydrogen production is whether the hydrogen is “green” or “blue”.
The government has released an assessment on low-carbon hydrogen standards to accompany the technique, with a promise to “settle design aspects” of such requirements by early 2022.
Jess Ralston, an expert at thinktank the Energy and Climate Intelligence Unit (ECIU), stated in a declaration that the government should “live to the danger of gas market lobbying causing it to devote too heavily to blue hydrogen therefore keeping the country locked into fossil fuel-based technology”.
The chart below, from a document outlining hydrogen costs released along with the primary strategy, reveals the anticipated declining expense of electrolytic hydrogen in time (green lines). (This consists of hydrogen made using grid electrical energy, which is not technically green unless the grid is 100% renewable.).
It has also released an accompanying report, prepared by consultancies E4Tech and Ludwig-Bölkow-Systemtechnik (LBST), which analyzes optimum acceptable levels of emissions for low-carbon hydrogen production and the approach for calculating these emissions.
This opposition came to a head when a current study caused headings mentioning that blue hydrogen is “worse for the climate than coal”.
For its part, the CCC has advised a “blue hydrogen bridge” as a beneficial tool for attaining net-zero. It says enabling some blue hydrogen will minimize emissions much faster in the short-term by replacing more fossil fuels with hydrogen when there is insufficient green hydrogen readily available..
Green hydrogen is used electrolysers powered by sustainable electricity, while blue hydrogen is used natural gas, with the resulting emissions caught and saved..
As it stands, blue hydrogen used steam methane reformation (SMR) is the cheapest low-carbon hydrogen offered, according to federal government analysis included in the strategy. (For more on the relative costs of various hydrogen varieties, see this Carbon Brief explainer.).
Many researchers and environmental groups are sceptical about blue hydrogen offered its associated emissions.
The strategy notes that, in some cases, hydrogen made utilizing electrolysers “might end up being cost-competitive with CCUS [carbon capture, utilisation and storage] -enabled methane reformation as early as 2025”..
The figure listed below from the consultation, based upon this analysis, reveals the impact of setting a threshold 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 omitted.
CO2 equivalent: Greenhouse gases can be revealed in regards to co2 equivalent, or CO2eq. For an offered amount, different greenhouse gases trap different amounts of heat in the atmosphere, a quantity called the global warming capacity. Co2 equivalent is a method of comparing emissions from all greenhouse gases, not just co2.
Short (hopefully) showing on this blue hydrogen thing. And then cherry-picked an environment metric to make it look as bad as possible.
Contrast of cost estimates across various technology types at main fuel rates commissioning from 2020 to 2050, ₤/ MWh hydrogen. Source: Hydrogen Production Costs.
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 dispute”. He states:.
CO2 equivalent: Greenhouse gases can be expressed in regards to carbon dioxide equivalent, or CO2eq. For a provided quantity, different greenhouse gases trap different quantities of heat in the atmosphere, a quantity understood as … Read More.
The former is essentially zero-carbon, however the latter can still lead to emissions due to methane leaks from gas facilities and the truth that carbon capture and storage (CCS) does not catch 100% of emissions..
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, rather than “blue” or “green”, the UK would “think about carbon intensity as the primary consider market advancement”.
The document does not do that and instead says it will offer “more information on our production method and twin track approach by early 2022”.
The CCC has previously specified “ideal emissions decreases” for blue hydrogen compared to fossil gas as “a minimum of 95% CO2 capture, 85% lifecycle greenhouse gas savings”.
Supporting a variety of projects will give the UK a “competitive advantage”, according to the federal government. Germany, by contrast, has said it will focus specifically on green hydrogen.
The method states that the proportion of hydrogen provided by specific technologies “depends upon a variety of assumptions, which can only be tested through the marketplaces reaction to the policies set out in this technique and genuine, at-scale release of hydrogen”..
” If we want to demonstrate, trial, begin to commercialise and then present using hydrogen in industry/air travel/freight or anywhere, then we need enough hydrogen. We cant wait till the supply side considerations are complete.”.
In the example selected for the assessment, gas paths where CO2 capture rates are below around 85% were omitted..
The CCC has actually formerly mentioned that the federal government should “set out [a] vision for contributions of hydrogen production from different paths to 2035” in its hydrogen strategy.
How will hydrogen be utilized in different sectors of the economy?
Some applications, such as commercial heating, may be virtually impossible without a supply of hydrogen, and many specialists have argued that these hold true where it must be prioritised, a minimum of in the short term.
Reacting to the report, energy scientists pointed to the “small” volumes of hydrogen expected to be produced in the future and prompted the government to select its priorities carefully.
This remains in line with the CCCs recommendation for its net-zero pathway, which sees low-carbon hydrogen scaling up to 90TWh by 2035– around a third of the size of the existing power sector.
” Stronger signals of intent might steer public and private investments into those locations which include most worth. The government has actually not clearly laid out how to decide upon which sectors will take advantage of the preliminary scheduled 5GW of production and has rather largely left this to be identified through pilots and trials.”.
So, my lovelies, I just dropped Version 4 of the Clean Hydrogen Ladder! For anybody new to all this, the ladder is my attempt to put usage cases for clean hydrogen into some sort of benefit order, due to the fact that not all use cases are equally most likely to be successful. 1/10 pic.twitter.com/I8HpqQjlKS— Michael Liebreich (@MLiebreich) August 15, 2021.
However, in the actual report, the government stated that it expected “overall the demand for low carbon hydrogen for heating by 2030 to be relatively low (<< 1TWh)".. However, the technique also includes the alternative of using hydrogen in sectors that might be much better served by electrification, especially domestic heating, where hydrogen has to contend with electrical heat pumps.. Require proof on "hydrogen-ready" industrial devices by the end of 2021. Require proof on phaseout of carbon-intensive hydrogen production in industry "within a year". Stage 2 of the ₤ 315m Industrial Energy Transformation Fund.A ₤ 55 million Industrial Fuel Switching 2 competitors in 2021. The brand-new technique is clear that industry will be a "lead choice" for early hydrogen usage, beginning in the mid-2020s. It also states that it will "likely" be essential for decarbonising transportation-- particularly heavy products lorries, shipping and aviation-- and balancing a more renewables-heavy grid. Juliet Phillips, senior policy advisor and UK hydrogen specialist at thinktank E3G tells Carbon Brief the technique had actually "left open" the door for uses that "do not include the most worth for the climate or economy". She includes:. The federal government is more optimistic about making use of hydrogen in domestic heating. Its analysis recommends that up to 45TWh of low-carbon hydrogen might be put to this use by 2035, as the chart listed below shows. Illustrative hydrogen demand in 2030 (blue) and 2035 (purple). Source: UK hydrogen technique. Low-carbon hydrogen can be utilized to do whatever from sustaining vehicles to heating homes, the reality is that it will likely be limited by the volume that can feasibly be produced. Michael Liebrich of Liebreich Associates has arranged the usage of low-carbon hydrogen into a "ladder", with existing applications-- such as the chemicals market-- provided top priority. It includes prepare for hydrogen heating trials and assessment on "hydrogen-ready" boilers by 2026. The committee emphasises that hydrogen use ought to be restricted to "areas less fit to electrification, particularly delivering and parts of market" and supplying flexibility to the power system. However, the starting point for the variety-- 0TWh-- recommends there is significant uncertainty compared to other sectors, and even the greatest estimate is only around a 10th of the energy presently utilized to heat UK homes. Coverage of the report and government promotional materials stressed that the federal governments plan would supply sufficient hydrogen to change gas in around 3m homes each year. The CCC does not see comprehensive usage of hydrogen outside of these limited cases by 2035, as the chart listed below programs. One noteworthy exclusion is hydrogen for fuel-cell automobile. This follows the federal governments concentrate on electrical cars, which lots of scientists consider as more cost-effective and effective technology. " As the method confesses, there wont be substantial quantities of low-carbon hydrogen for a long time.  we require to utilize 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. Dedications made in the new method include:. Federal government analysis, consisted of in the technique, suggests possible hydrogen demand of approximately 38 terawatt-hours (TWh) by 2030, not including mixing it into the gas grid, and increasing to 55-165TWh by 2035. 4) On page 62 the hydrogen strategy mentions that the federal government anticipates << 1 TWh of energy for heating to come from hydrogen by 2030. Current 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 houses.-- Jan Rosenow (@janrosenow) August 17, 2021. Gniewomir Flis, a job supervisor at Agora Energiewende, informs Carbon Brief that-- in his view-- blending "has no future". He explains:. Finally, in order to produce a market for hydrogen, the federal government says it will analyze blending approximately 20% hydrogen into the gas network by late 2022 and goal to make a decision in late 2023. " I would suggest to opt for these no-regret choices for hydrogen demand [in market] that are already available ... those should be the focus.". Much will hinge on the development of feasibility research studies in the coming years, and the governments upcoming heat and structures strategy may also offer some clearness. How does the federal government strategy to support the hydrogen market? Hydrogen demand (pink location) and proportion of last energy consumption in 2050 (%). My lovelies, I simply dropped Version 4 of the Clean Hydrogen Ladder! Call for evidence on phaseout of carbon-intensive hydrogen production in industry "within a year"." As the method admits, there will not be considerable quantities of low-carbon hydrogen for some time. 4) On page 62 the hydrogen technique mentions that the federal government expects << 1 TWh of energy for heating to come from hydrogen by 2030. Sharelines from this story. According to the federal governments press release, its preferred model is "developed on a similar facility to the offshore wind agreements for difference (CfDs)", which significantly cut costs of brand-new offshore wind farms. Anne-Marie Trevelyan-- minister for energy, clean growth and climate modification at BEIS-- informed the Times that the expense to provide long-term security to the industry would be "really small" for private families. Much of the resulting press protection of the hydrogen strategy, from the Financial Times to the Daily Telegraph, concentrated on the plan for a hydrogen market "subsidised by taxpayers", as the money would come from either higher costs or public funds. Now that its technique has actually been released, the federal government says it will collect evidence from assessments on its low-carbon hydrogen requirement, net-zero hydrogen fund and business design:. The 10-point plan consisted of a pledge to develop a hydrogen organization design to encourage personal financial investment and a profits mechanism to offer funding for the business design. The brand-new hydrogen technique confirms that this organization design will be finalised in 2022, making it possible for the first contracts to be assigned from the start of 2023. This is pending another consultation, which has been released together with the main strategy. These contracts are created to conquer the cost space between the favored innovation and nonrenewable fuel sources. Hydrogen manufacturers would be offered a payment that bridges this gap. " This will give us a better understanding of the mix of production technologies, how we will satisfy a ramp-up in need, and the function that brand-new technologies could play in accomplishing the levels of production required to satisfy our future [6th carbon budget] and net-zero commitments.". As it stands, low-carbon hydrogen remains costly compared to nonrenewable fuel source alternatives, there is uncertainty about the level of future need and high dangers for business intending to enter the sector.