The UKs new, long-awaited hydrogen strategy offers more information on how the federal government will support the development of a domestic low-carbon hydrogen sector, which today is practically non-existent.
Firm decisions around the degree of hydrogen use in domestic heating and how to ensure it is produced in a low-carbon way have been delayed or put out to consultation for the time being.
Specialists have cautioned that, with hydrogen in short supply in the coming years, the UK should prioritise it in “hard-to-electrify” sectors such as heavy industry as capacity expands.
Hydrogen will be “crucial” for achieving the UKs net-zero target and could fulfill up to a 3rd of the countrys energy needs by 2050, according to the government.
In this post, Carbon Brief highlights essential points from the 121-page method and analyzes some of the main talking points around the UKs hydrogen strategies.
Why does the UK require a hydrogen technique?
Today we have published the UKs very first Hydrogen Strategy! This is our strategy to: kick-start an entire industry unleash the market to cut expenses ramp up domestic production unlock ₤ 4bn of personal capital assistance 9k tasks #BuildBackGreenerhttps:// t.co/ aHZTr5yYeR– Kwasi Kwarteng (@KwasiKwarteng) August 17, 2021.
The document contains an exploration of how the UK will broaden production and produce a market for hydrogen based upon domestic supply chains. This contrasts with Germany, which has been seeking to import hydrogen from abroad.
There were likewise over 100 referrals to hydrogen throughout the federal governments energy white paper, reflecting its potential usage in lots of sectors. It also includes in the commercial and transportation decarbonisation methods released earlier this year.
Hydrogen demand (pink location) and proportion of final energy intake in 2050 (%). The main range is based on illustrative net-zero consistent scenarios in the 6th carbon budget plan impact assessment and the complete range is based on the entire variety from hydrogen technique analytical annex. Source: UK hydrogen technique.
Hydrogen is widely viewed as a crucial component in plans to attain net-zero emissions and has been the subject of considerable hype, with numerous nations prioritising it in their post-Covid green healing strategies.
Nevertheless, just like the majority of the federal governments net-zero method documents so far, the hydrogen strategy has actually been delayed by months, resulting in unpredictability around the future of this recently established market.
Its flexibility means it can be utilized to tackle emissions in “hard-to-abate” sectors, such as heavy market, however it presently struggles with high prices and low efficiency..
Nevertheless, the Climate Change Committee (CCC) has noted that, in order to hit the UKs carbon budget plans and achieve net-zero emissions, choices in locations such as decarbonising heating and automobiles need to be made in the 2020s to allow time for facilities and lorry stock changes.
In some applications, hydrogen will compete with electrification and carbon capture and storage (CCS) as the very best methods of decarbonisation.
Hydrogen growth for the next decade is expected to start gradually, with a federal government aspiration to “see 1GW production capability by 2025” set out in the technique.
The strategy does not increase this target, although it keeps in mind that the federal government is “knowledgeable about a prospective pipeline of over 15GW of projects”.
Critics also characterise hydrogen– the majority of which is presently made from gas– as a way for fossil fuel companies to preserve the status quo. (For all the benefits and downsides of hydrogen, see Carbon Briefs thorough explainer.).
The level of hydrogen usage in 2050 envisaged by the method is somewhat higher than set out by the CCC in its most current recommendations, however covers a similar range to other research studies.
A recent All Party Parliamentary Group report on the function of hydrogen in powering market included a list of demands, specifying that the federal government must “broaden beyond its existing commitments of 5GW production in the upcoming hydrogen strategy”. This call has actually been echoed by some market groups.
In its new method, the UK federal government makes it clear that it sees low-carbon hydrogen as a key part of its net-zero strategy, and says it desires the nation to be a “worldwide 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 risks being left behind. Other European countries have actually pledged billions to support low-carbon hydrogen growth.
However, as the chart below programs, if the federal governments plans come to fruition it might then broaden significantly– comprising in between 20-35% of the nations total energy supply by 2050. This will need a significant growth of facilities and abilities in the UK.
The plan likewise called for a ₤ 240m net-zero hydrogen fund, the production of a hydrogen neighbourhood heated with the gas by 2023, and increasing hydrogen blending into gas networks to 20% to reduce dependence on natural gas.
Prior to the new technique, the prime ministers 10-point plan in November 2020 consisted of plans to produce five gigawatts (GW) of annual low-carbon hydrogen production capacity in the UK by 2030. Currently, this capacity stands at practically absolutely no.
What variety of low-carbon hydrogen will be prioritised?
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 blue vs green hydrogen debate”. He states:.
The strategy keeps in mind that, in many cases, hydrogen used electrolysers “might end up being cost-competitive with CCUS [carbon utilisation, capture and storage] -made it possible for methane reformation as early as 2025”..
The CCC has cautioned that policies need to develop both green and blue choices, “instead of just whichever is least-cost”.
CO2 equivalent: Greenhouse gases can be expressed in terms of co2 equivalent, or CO2eq. For a provided quantity, different greenhouse gases trap different amounts of heat in the atmosphere, an amount understood as … Read More.
Green hydrogen is used electrolysers powered by eco-friendly electricity, while blue hydrogen is used gas, with the resulting emissions captured and stored..
For its part, the CCC has advised a “blue hydrogen bridge” as an useful tool for attaining net-zero. It states enabling some blue hydrogen will decrease emissions quicker in the short-term by replacing more fossil fuels with hydrogen when there is inadequate green hydrogen offered..
It has actually likewise released an accompanying report, prepared by consultancies E4Tech and Ludwig-Bölkow-Systemtechnik (LBST), which analyzes maximum acceptable levels of emissions for low-carbon hydrogen production and the approach for determining these emissions.
The technique mentions that the percentage of hydrogen provided by specific innovations “depends on a series of assumptions, which can only be tested through the marketplaces response to the policies set out in this strategy and real, at-scale release of hydrogen”..
The federal government has launched a consultation on low-carbon hydrogen standards to accompany the strategy, with a pledge to “settle style elements” of such requirements by early 2022.
Short (ideally) assessing this blue hydrogen thing. Basically, the papers estimations potentially represent a case where blue H ₂ is done actually severely & & without any practical guidelines. 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.
As it stands, blue hydrogen made utilizing steam methane reformation (SMR) is the most inexpensive low-carbon hydrogen readily available, according to federal government analysis included in the technique. (For more on the relative costs of various hydrogen ranges, see this Carbon Brief explainer.).
At the heart of many conversations about low-carbon hydrogen production is whether the hydrogen is “green” or “blue”.
The CCC has actually previously specified “suitable emissions reductions” for blue hydrogen compared to fossil gas as “a minimum of 95% CO2 capture, 85% lifecycle greenhouse gas savings”.
The file does not do that and rather states it will supply “further information on our production strategy and twin track technique by early 2022”.
The former is essentially zero-carbon, however the latter can still lead to emissions due to methane leaks from natural gas infrastructure and the truth that carbon capture and storage (CCS) does not capture 100% of emissions..
The figure 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 approaches above the red line, including some for producing blue hydrogen, would be omitted.
There was significant pushback on this conclusion, with other scientists– consisting of CCC head of carbon spending plans, David Joffe– pointing out that it relied on really high methane leakage and a short-term step of global warming potential that emphasised the effect of methane emissions over CO2.
Many scientists and ecological groups are sceptical about blue hydrogen given its associated emissions.
Jess Ralston, an expert at thinktank the Energy and Climate Intelligence Unit (ECIU), said in a statement that the federal government need to “live to the threat of gas market lobbying triggering it to commit too heavily to blue hydrogen therefore keeping the country locked into fossil fuel-based technology”.
The new strategy mostly prevents utilizing this colour-coding system, but it states the federal government has dedicated to a “twin track” technique that will consist of the production of both ranges.
Comparison of price quotes throughout various technology types at central fuel rates commissioning from 2020 to 2050, ₤/ MWh hydrogen. Source: Hydrogen Production Costs.
In the example chosen for the consultation, natural gas routes where CO2 capture rates are below around 85% were left out..
CO2 equivalent: Greenhouse gases can be expressed in terms of carbon dioxide equivalent, or CO2eq. For a provided amount, various greenhouse gases trap various quantities of heat in the atmosphere, a quantity understood as the global warming potential. Carbon dioxide equivalent is a way of comparing emissions from all greenhouse gases, not just co2.
” If we want to show, trial, begin to commercialise and then roll out making use of hydrogen in industry/air travel/freight or anywhere, then we need enough hydrogen. We cant wait until the supply side deliberations are complete.”.
The chart below, from a document detailing hydrogen expenses launched alongside the primary technique, reveals the expected decreasing expense of electrolytic hydrogen gradually (green lines). (This includes hydrogen used grid electrical power, which is not technically green unless the grid is 100% renewable.).
This opposition capped when a recent study led to headings mentioning that blue hydrogen is “worse for the environment than coal”.
Supporting a range of tasks will offer the UK a “competitive benefit”, according to the government. Germany, by contrast, has said it will focus solely on green hydrogen.
The CCC has formerly specified that the federal government should “set out [a] vision for contributions of hydrogen production from various routes to 2035” in its hydrogen method.
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 “consider carbon strength as the main factor in market advancement”.
How will hydrogen be utilized in various sectors of the economy?
Illustrative hydrogen need in 2030 (blue) and 2035 (purple). Source: UK hydrogen method.
Michael Liebrich of Liebreich Associates has organised using low-carbon hydrogen into a “ladder”, with present applications– such as the chemicals market– offered leading priority.
The new strategy is clear that market will be a “lead alternative” for early hydrogen usage, starting in the mid-2020s. It also says that it will “likely” be very important for decarbonising transportation– especially heavy products vehicles, shipping and aviation– and stabilizing a more renewables-heavy grid.
Dedications made in the new technique consist of:.
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 usage cases for tidy hydrogen into some sort of benefit order, because not all usage cases are similarly most likely to prosper. 1/10 pic.twitter.com/I8HpqQjlKS— Michael Liebreich (@MLiebreich) August 15, 2021.
Juliet Phillips, senior policy consultant and UK hydrogen specialist at thinktank E3G informs Carbon Brief the method had actually “left open” the door for uses that “dont include the most value for the environment or economy”. She includes:.
Government analysis, included in the technique, recommends possible hydrogen demand of up to 38 terawatt-hours (TWh) by 2030, not consisting of blending it into the gas grid, and rising to 55-165TWh by 2035.
However, the starting point for the variety– 0TWh– recommends there is significant uncertainty compared to other sectors, and even the highest estimate is just around a 10th of the energy currently utilized to heat UK homes.
It consists of prepare for hydrogen heating trials and assessment on “hydrogen-ready” boilers by 2026.
Low-carbon hydrogen can be used to do whatever from sustaining vehicles to heating homes, the reality is that it will likely be limited by the volume that can probably be produced.
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 current power sector.
However, in the real report, the government said that it anticipated “overall the need for low carbon hydrogen for heating by 2030 to be reasonably low (<< 1TWh)".. The CCC does not see substantial usage of hydrogen outside of these restricted cases by 2035, as the chart listed below shows. The federal government is more positive about making use of hydrogen in domestic heating. Its analysis recommends that approximately 45TWh of low-carbon hydrogen might be put to this usage by 2035, as the chart listed below shows. " Stronger signals of intent could steer public and personal financial investments into those areas which add most value. The federal government has actually not plainly set out how to pick which sectors will take advantage of the preliminary organized 5GW of production and has rather largely left this to be identified through pilots and trials.". " As the strategy confesses, there will not be considerable quantities of low-carbon hydrogen for a long time. [Therefore] we need to utilize it where there are couple of options 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. The strategy likewise consists of the alternative of using hydrogen in sectors that might be better served by electrification, particularly domestic heating, where hydrogen has to complete with electric heat pumps.. Call for proof on "hydrogen-ready" commercial devices by the end of 2021. Require 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. One notable exemption is hydrogen for fuel-cell automobile. This follows the governments concentrate on electric automobiles, which numerous researchers consider as more efficient and affordable technology. Reacting to the report, energy scientists pointed to the "small" volumes of hydrogen anticipated to be produced in the near future and prompted the government to select its priorities thoroughly. The committee stresses that hydrogen use should be limited to "areas less suited to electrification, particularly delivering and parts of market" and supplying versatility to the power system. Protection of the report and government advertising materials stressed that the federal governments plan would offer adequate hydrogen to change natural gas in around 3m homes each year. Some applications, such as commercial heating, may be practically difficult without a supply of hydrogen, and numerous experts have argued that these hold true where it should be prioritised, a minimum of in the short-term. 4) On page 62 the hydrogen method mentions that the federal government expects << 1 TWh of energy for heating to come from hydrogen by 2030. Current energy need in the UK for space and hot water heating is 435 TWh according to Ofgem. 1 TWh is 0.2%. Thats about 67,000 houses.-- Jan Rosenow (@janrosenow) August 17, 2021. " I would suggest to go with these no-regret options for hydrogen need [in market] that are currently readily available ... those must be the focus.". Much will hinge on the development of expediency studies in the coming years, and the governments upcoming heat and buildings strategy may likewise supply some clearness. Gniewomir Flis, a task manager at Agora Energiewende, tells Carbon Brief that-- in his view-- blending "has no future". He discusses:. In order to produce a market for hydrogen, the federal government says it will examine blending up to 20% hydrogen into the gas network by late 2022 and goal to make a last decision in late 2023. How does the government strategy to support the hydrogen market? These contracts are developed to get rid of the cost gap in between the preferred innovation and fossil fuels. Hydrogen producers would be given a payment that bridges this space. " This will offer us a better understanding of the mix of production technologies, how we will satisfy a ramp-up in demand, and the function that new innovations could play in achieving the levels of production necessary to fulfill our future [sixth carbon spending plan] and net-zero commitments.". The brand-new hydrogen strategy confirms that this organization design will be finalised in 2022, enabling the very first contracts to be allocated from the start of 2023. This is pending another consultation, which has actually been launched together with the primary method. Sharelines from this story. Hydrogen need (pink location) and percentage of last energy consumption in 2050 (%). My lovelies, I just 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 wont be substantial amounts of low-carbon hydrogen for some time. 4) On page 62 the hydrogen method specifies that the government anticipates << 1 TWh of energy for heating to come from hydrogen by 2030. Much of the resulting press protection of the hydrogen method, from the Financial Times to the Daily Telegraph, concentrated on the strategy for a hydrogen market "subsidised by taxpayers", as the cash would originate from either greater expenses or public funds. The 10-point plan included a promise to develop a hydrogen organization model to encourage personal financial investment and an income system to supply financing for business model. Now that its strategy has been published, the federal government states it will gather evidence from consultations on its low-carbon hydrogen standard, net-zero hydrogen fund and the service design:. Nevertheless, Anne-Marie Trevelyan-- minister for energy, tidy growth and climate modification at BEIS-- told the Times that the cost to supply long-lasting security to the market would be "really small" for individual homes. According to the federal governments press release, its preferred design is "built on a comparable facility to the overseas wind contracts for distinction (CfDs)", which significantly cut expenses of new offshore wind farms. 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 dangers for companies intending to go into the sector.