By publishing a hydrogen strategy on 17 August the UK has joined a club of 30+ other nations who have outlined a policy framework for the renewable fuel, viewed as indispensable to global efforts to prevent temperature rises above 1.5ºC by 2050. A mixed reception seemed apparent from commentators, particularly in relation to ongoing support for blue hydrogen. Envirotec reports.
The strategy confirms the central role hydrogen needs to play in the UK’s plans to reach net zero emissions by 2050. It reiterated a commitment to reach 5GW of low-carbon hydrogen production capacity by 2030, as previously set out in the Ten-Point Plan of November 2020.This seems to be in-line with existing progress, and market intelligence firms Aurora and GlobalData noted that 4.06GW of capacity is already in the pipeline with the existing line-up of proposed projects. However, the target “may not position the country as a leader in the sector”, as GlobalData energy data analyst Barbara Monterrubio said.
Other regions seem to have set more ambitious targets already, including the Netherlands (15GW by 2030) and Germany (14GW by 2030), while the EU has settled on a 2030 target of 40GW production capacity.
“It would be disappointing for a country with the UK’s high expected growth in offshore wind not to see this translate into a lead in the hydrogen space,” said Monterrubio. The UK is expected to be the top European country in offshore wind capacity over the next decade, with over double the capacity of Germany and almost five times that of the Netherlands.
“Given that much of the hydrogen capacity build-out in Northwest Europe plans to leverage offshore wind energy, a more competitive capacity goal for low-carbon hydrogen could be expected from the UK,” she said.
Similarly, David Smith, Chief Executive of the Energy Networks Association, believed that for hydrogen to play its part in Net Zero, 5GW will not be enough. “We must set our sights higher, towards a figure twice that amount.”
Also in the not-exactly-biting-your-hand-off-with-joy category was Protium CEO Chris Jackson’s comment that the strategy was “not necessarily worse” than what had been hoped for, though he noted “it has not introduced a long list of upsides and offers little to support the SME space.”
The putative £4 billion funding apparently unlocked to achieve the 5GW target seemed to be not all it appeared at first sight. This will include direct funding to the tune of a £105 million funding package through the UK government’s £1 billion Net Zero Innovation Fund, and a £240 million Net Zero Hydrogen Fund (to be launched in 2022). The University of Birmingham’s Professor Martin Freer said this “may not be enough and is dwarfed by Germany’s 8 billion Euro and $19 billion commitments.”
John Mullen of Ramboll thought the government “should be seizing the opportunity” by providing a concrete action plan “now rather than making us wait until 2022.”
The government anticipates a £900 million market for hydrogen in 2030, creating over 9,000 “high-quality jobs”, and attracting £4 billion of private investment. Growth is expected to come mainly from industry, followed by power and transport. By 2050, however, it expects the market to be worth £13 billion, giving rise to 100k jobs.
Twin track controversy
In common with the EU and German strategies, the UK has opted for a twin track approach to hydrogen production, with ongoing support for both blue and green hydrogen – referring to “low-carbon” methods that depend on non-renewable and renewable sources, respectively.
Most hydrogen today is produced by steam reformation of the methane present in natural gas, a process that emits a lot of CO2. This is often termed “grey” hydrogen. By adding a stage of carbon capture, it becomes “blue” hydrogen and it is assumed this will meet the low carbon threshold, although conventional wisdom has held that it still leaves at least 10-15% of CO2 emissions uncaptured, with some appraisals far less generous (of which more later).
Blue hydrogen will be developed via industrial clusters, with many located in coastal regions to support transport to offshore CO2 storage sites. Notably so far, BP has plans to develop a hydrogen plant in Teeside, while Norwegian oil firm Equinor is to build “the world’s biggest” hydrogen production plant with CCS, in Hull.
Green hydrogen is generated via the electrolysis of water, a process powered by renewables. The UK strategy anticipates this will be supported mostly by offshore wind. At present it is very inefficient and by far the most expensive way of making hydrogen, but there are hopes the cost might follow a similarly swift downward curve as happened with some renewables.
But there seems to be disagreement about the timeline over which blue hydrogen can be considered viable. Victoria Judd of law firm Pilsbury felt the strategy might resolve the chicken-and-egg scenario that might otherwise hobble a new market like hydrogen and make it difficult to generate demand for the fuel while the supply is still low. She felt the UK strategy, while criticised by many for its strong support for blue hydrogen, appeared to offer “a run-up before our green hydrogen ambitions take flight.” With blue hydrogen and carbon capture, a common view is that “the only justification for their use is to allow for the transition to a green hydrogen world,” as Ramboll’s John Mullen put it.
The EU and German strategies certainly seem to reflect such a view.
It was enough to bring about the resignation of Christopher Jackson from his position as chair of the UK Hydrogen & Fuel Cell Association (UK HFCA), who declared blue hydrogen to be “at best an expensive distraction, and at worst a lock-in for continued fossil fuel use that guarantees we will fail to meet our decarbonisation goals,” as he stated on LinkedIn.
Jackson, who is CEO of green hydrogen firm Protium, attacked the “false claims made by oil companies about the cost of blue hydrogen”, in The Guardian, suggesting that while ministers had been “desperate” for something that looked affordable and low carbon, there were clearly better options out there.
More bad news for blue?
Misgivings also appeared forthcoming from a study published in August, said to be the first peer-reviewed paper to examine the lifecycle GHG emissions of blue hydrogen, looking at emissions of both CO2 and unburned fugitive methane.
“Far from being low carbon,” explain the authors, “greenhouse gas emissions from the production of blue hydrogen are quite high, particularly due to the release of fugitive methane.”
They appeared to find that total CO2-equivalent emissions of blue hydrogen were only 9-12% less than for grey hydrogen, but with much higher fugitive methane emissions than the latter, because of the increased use of natural gas to power the carbon capture.
“Perhaps surprisingly,” says the paper, “the greenhouse gas footprint of blue hydrogen is more than 20% greater than burning natural gas or coal for heat and some 60% greater than burning diesel oil for heat.”
One of the authors, Robert Howarth, a professor at Cornell University, told The Guardian, the study was “a warning signal to governments” and that the only hydrogen worth considering is “truly net zero, green hydrogen made from wind and solar energy.”
The government has previously cited reports from groups like the Climate Change Committee, showing that “a combination of blue and green hydrogen is consistent with reaching net zero”.
Further clarity is expected with the publication of the UK standard for low carbon hydrogen, expected in late 2021 or in 2022. Aurora expected the standard “will be less stringent than the EU Taxonomy, in order to include blue hydrogen”.
Another still-awaited piece of the puzzle is the launch of the hydrogen production subsidy scheme, expected in 2023. And in the more immediate future, the CBI said “firms will be looking to the government to make ambitious commitments on hydrogen testing and demonstration projects in the upcoming Comprehensive Spending Review.”
Some observers criticised the omission of these elements in the strategy announcement. “Like many of the strategies we’ve seen come out in recent months, there are few firm commitments,” said Alex Hirom of law firm Addleshaw Goddard. While he thought the proposals “ambitious”, he added that “it’s unlikely any nationally significant projects will be consented to until the government updates its National Policy Statements, which don’t currently support hydrogen.”
“Without strong policy support, projects at the consenting stage will continue to face considerable uncertainty.” This needed to be addressed “immediately otherwise the generation and distribution infrastructure will continue to lag behind ambition.”
He noted that it will be another year before we see a production strategy, and a further four years before we know if hydrogen will replace or supplement natural gas in heating and boilers.
The strategy said that industrial users “are expected to provide the most significant new demand for hydrogen by 2030 through industrial fuel switching”.
A big part of this is industrial heating, including steam boilers and CHP systems. Unilever’s Port Sunlight facility in the Wirral is running a trial to switch over a natural gas boiler to hydrogen – currently used to generate heat for the manufacture of home and personal care products. A 7MWth burner capable of running both types of fuel is being installed, and hydrogen will be phased in gradually, with close monitoring of things like the consistency of steam production and adherence to NOx emission limits.
For heating, the strategy said hydrogen “could provide an important low-carbon alternative – alongside electrification”, and the government is supporting trials to explore costs, benefits and feasibility. Hirom thought electric now looked a more likely candidate for domestic heat.
Blending gas and hydrogen
Hydrogen presents an opportunity to leverage some of the existing fossil fuels infrastructure while cutting emissions, and the strategy said the government was also “exploring the option of blending hydrogen into the gas grid with a decision to be taken in 2023.”
Mike Foster, CEO at Energy and Utilities Alliance (EUA) was enthused about the opportunity for “reducing carbon emissions without homeowners needing to change appliances or boilers.”
“It is of great importance that the transition to hydrogen does not cause disruption or large costs to consumers.”
“The blend is a way to significantly reduce emissions with no change, which will in turn leave time for the groundwork to be laid for a seamless switch to 100% hydrogen later on.”
Hydrogen will soon be blended with natural gas and to over 650 homes in a trial in Winlaton, Gateshead.
In transport hydrogen seems to have a role in powering heavy vehicles, like buses, trains, trucks and ships, and possibly cars and vans although battery electric power might have more of a role here.
The significant cost gap between low carbon hydrogen and fossil fuels is obviously a big obstacle presently, although the strategy also launched a consultation looking at ways to overcome this through a Contracts for Difference (CfD) scheme, an approach that has had notable success in ramping up offshore wind capacity while bringing down costs, as Gemserv’s Clare Jackson noted. Launch of the hydrogen CfD scheme is scheduled for 2023.
She said that “as is often the case with new low carbon solutions still in the early stages of deployment, hydrogen faces operational cost challenges and will need to compete with low-cost, high-carbon alternatives such as natural gas. Leadership and support will therefore be essential to its success.”
The opportunities hydrogen might present to decarbonise all sorts of areas will depend on the development of a wider hydrogen infrastructure. For example, this could be significant in helping abate the 6MtCO2 emissions associated with the industrial non-road vehicles sector, including things like diggers and excavators. Plant and machinery manufacturers are already developing equipment that can run off hydrogen, which along with electrification might be important for decarbonising this sector.
There are many unknowns at this point. Dalia Majumder-Russell of CMS noted that hydrogen straddles the regulatory regimes for gas and electricity– among others – and urgently needs one of its own, as the present situation “leaves gaps and risks which act as unnecessary hurdles.”
When will it happen?
The UK strategy sets out a rough roadmap for the production of blue and green hydrogen, with the early 2020s seeing small-scale green hydrogen projects (up to 20MW) with production located near usage sites (i.e., at transport hubs or industrial sites).
The mid-2020s is expected to bring larger green hydrogen projects (100MW) and the appearance of CCUS-enabled blue hydrogen production facilities in industrial clusters. “At this stage producers could be catering for a growing range of customers across transport, industry and power generation as well as potential to supply hydrogen heat trials and blend low carbon hydrogen into the gas grid,” says the strategy document.
And then by 2030, the government anticipates there will be large CCUS-enabled plants (500MW+) spread across the country, “with extensive cluster networks and integration into the wider energy system”.