Energy focus: The UK’s energy mix – a role for hydrogen?
Hydrogen is increasingly becoming a front-runner in the energy sector’s transition to net-zero. In this article we will provide a brief introduction to the key government initiatives relating to hydrogen contained in the Energy White Paper. We will also consider the application, benefits and drawbacks of hydrogen as a source of heat and power.
What provisions have been made for hydrogen in the 2020 Energy White Paper?
The Energy White Paper, published on 14th December 2020, makes it clear that hydrogen will form a key part of the government’s energy strategy and will be essential in delivering their promise to support a green recovery from the COVID-19 pandemic.
The government expects that, by 2050, hydrogen and other low carbon energy options will be able to ensure security of energy supply at low cost and, since hydrogen can be stored, it will be expected to provide a reserve energy store in times of peak demand. The current uncertainty surrounding the UK’s access to interconnectors following the EU Trade and Cooperation Agreement has only increased the impetus for the government to pursue all avenues for increasing reserve storage.
The government has set a target of 5GW of low carbon hydrogen production capacity by 2030, which will be a mixture of green and blue hydrogen. They will support this through its £240m Net Zero Hydrogen Fund and by setting out the required hydrogen business models and a revenue mechanism to allow the fund to bring in private sector investment, which the government estimates could be well over £4bn by 2030. The government has also announced that it will ensure that existing renewables support mechanisms, such as the Renewable Transport Fuel Obligation, will be able to provide an appropriate level of support.
The UK is already a world leader in investigating hydrogen for heating. The government is committed to the development of prototype hydrogen-ready boilers, cookers and fires through the Hy4Heat programme, and it has now further committed to working with industry to complete the testing necessary to allow 20% blending of hydrogen into the gas distribution grid for all connected homes. Reportedly, 670 homes in the village of Wincanton near Gateshead will be trialling the use of hydrogen blended gas for 10 months starting from early 2021 as part of the HyDeploy North East scheme led by Northern Gas Networks. By 2023 the government has said that it will support industry to begin a Hydrogen Neighbourhood trial to assess the viability of hydrogen for heating communities. If the trial is successful, the use of hydrogen could be rapidly scaled up.
Prior to the release of the Energy White Paper there was a great deal of uncertainty surrounding the future of hydrogen. The announcements made in the White Paper will provide some much-needed certainty around government support for hydrogen initiatives, and the Hydrogen Strategy, which is due to be released this year, should provide some certainty as to policy direction and increase the viability of UK hydrogen for private investment.
How is hydrogen produced?
Generally, there are two ways in which hydrogen can be produced:
- Steam-methane reforming. High-temperature steam reacts with methane in the presence of a catalyst to produce hydrogen, carbon monoxide and carbon dioxide.
- Electrolysis. This process uses an electric current to split hydrogen from water using electrolysers.
What are blue, green and grey hydrogen?
Blue hydrogen is produced using the steam methane reforming method described above (powered by non-renewable energy sources). As carbon is a bi-product of this process, blue hydrogen production utilises carbon capture and storage (CCUS) methods to capture the waste carbon and store it as securely as possible. Blue hydrogen is not zero carbon; it is low carbon provided that it is coupled with CCUS.
Grey hydrogen is similar to blue hydrogen but without any CCUS. Grey hydrogen is not zero or low carbon.
Green hydrogen is produced using the electrolysis method described above – there is no carbon bi-product. The electrolysis process is powered by a renewable energy source, such as solar, wind or hydroelectricity, which is also zero carbon. Green hydrogen is therefore the only true zero carbon hydrogen production method.
How can hydrogen be used?
Hydrogen can be liquefied and burned in a similar way to natural gas, or used to generate power and heat in a fuel cell, but with zero carbon emissions at use.
Clean hydrogen has been earmarked for several potential applications:
- Hydrogen fuel-cells in electric cars, buses and trucks
- Container ships powered by liquid ammonia (which is made from hydrogen)
- As a heat source in heavy industry, in place of coal
- Storage and to power turbines to produce electricity at times of high demand
- In homes as a substitute for natural gas for cooking and heating.
For further information about the use of hydrogen for transport, please see our separate article on the subject.
What are the pros and cons of using hydrogen for power and heat?
Low/Zero carbon – As discussed above, when you burn hydrogen there are no emissions at the point of use. So long as the hydrogen used in the process is green (or blue and production is combined with CCUS), it would contribute to a significant reduction in emissions when compared to natural gas.
Easy storage – Hydrogen has been heralded for its flexibility as it can be compressed or liquefied and stored for long periods of time. Stored hydrogen can therefore be used as a green or low-carbon fuel to be burned at times of high demand and could become an integral part of the UK’s flexible generation portfolio.
Energy output – Hydrogen is very energy-dense and therefore extremely efficient at the point the use when compared to natural gas, petrol or diesel.
Production inefficiency and expense – Despite it being possible to produce green hydrogen which is zero carbon, the process of electrolysis is only around 70% efficient and the remainder of the energy used in production is wasted.
Potential regulatory barriers – Despite the same being true of petrol, diesel and natural gas, hydrogen is a highly flammable substance and as such is likely to attract substantial regulatory scrutiny in order to ensure that hydrogen supply is safely managed. This could impact on its attractiveness to potential investors. As noted above, we currently await the government’s Hydrogen Strategy which is expected to be published later this year.
Pipeline issues – In relation to hydrogen use for heating, a number of the current government projects, centre on the blending of hydrogen with natural gas and the supply to consumers through existing gas infrastructure. The high pressure transmission pipes are made of high-strength steel, but it has been suggested that the introduction of hydrogen into these pipes could lead to embrittlement, where the interaction of hydrogen with the material of the pipe could cause an increased rate of defects and corrosion. The use of the existing gas network to supply hydrogen could therefore require significant expenditure on upgrades and/or replacement.
Scalability – Pure hydrogen cannot be used in existing appliances, so a complete transition to hydrogen power would require a mass rollout and replacement programme in consumer homes, which in turn would require strong government support to incentivise the change.
In conclusion, hydrogen looks set to play a pivotal role in the future of power and heat production in the UK. It’s increasingly green credentials, flexibility and compatibility with existing gas infrastructure make it an inviting contender for investment as the UK transitions to net zero.
However, it remains to be seen what the government will do to address the physical and potential regulatory drawbacks that are currently causing some hesitancy amongst investors. It is hoped that the promised Hydrogen Strategy paper will start to outline the government’s strategy in relation to some of these issues and this is certainly something to keep an eye on in the coming months.
The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.
‘Doing the right thing’ is at the heart of Freeths. Find out more about our excellent client service and the strong set of values that guide the way we work.
Talk to us
Freeths are a leading national law firm with 13 offices across the UK. If you have a query about our services or just want to find out more, why not give us a call?
Contact: 03301 001 014