The UK government — fresh from a change of leadership — has unveiled an emergency budget that commits to “accelerate the delivery” of two blue hydrogen projects in northern England.
The budget — labelled as “UK Growth Plan 2022” — says that the government is “committed to accelerating the delivery of priority major infrastructure projects across the country, as a vital means of driving the UK’s economic growth, increasing long-term energy security and delivering Net Zero”.
Among the projects listed are the Hynet North West project in northwest England, and the East Coast Cluster complex in northeast England — both of which aim to reduce greenhouse gas emissions in local heavy industries through the supply of blue H2.
Blue hydrogen is made from natural gas with carbon capture and storage (CCS). Prioritising the use of additional natural gas during a global gas supply crisis that is causing double-digit inflation in the UK might raise a few eyebrows. Natural gas is currently so expensive in Britain that the government will subsidise its use this winter to the tune of billions of pounds. Industrial-scale CCS is also an expensive proposition, with high levels of carbon capture in blue hydrogen production not yet proven in a commercial setting anywhere in the world.
Blue hydrogen is also far from being emissions free, with the risk of high upstream methane emissions (86 times more powerful a greenhouse gas than carbon dioxide) and inability to capture all the CO2 released by methane reformation processes.
Nevertheless, some experts argue that blue hydrogen should be pursued in the short to medium term because it can be scaled a lot faster than green H2.
Hynet — which is being developed by a consortium of 41 companies, with support from five local authorities — promises to reduce CO2 emissions in northwest England by 10 million tonnes per year by 2030. Its vision document states that its hydrogen — derived from natural gas with 95% carbon capture — will be used at a local oil refinery and distributed via new pipelines to manufacturing sites and “potentially power stations” across the region, with “some” of the hydrogen blended with the natural gas fed into people’s homes.
As roughly three units of hydrogen would be needed to produce the same amount of heat as a unit of natural gas, this would inevitably make households’ energy bills even higher — something that does not seem to have been recognised by the new government. It has also been well established that heating homes with electric heat pumps would be six times more efficient than burning green hydrogen in domestic boilers.
The East Coast Cluster is similar to Hynet, with the blue H2 being used for heavy industry, oil refining and power production, and CO2 also captured and stored from non-hydrogen industrial sources. The developers — oil companies BP, Shell, TotalEnergies and Equinor, and network operator National Grid — claim the project will “remove 50% of the UK’s industrial cluster CO2 emissions”.
Both developments are not due to start until the “mid-2020s”.
Six of the seven “vital” hydrogen-related infrastructure projects listed in the new budget document are actually different parts of the Hynet and East Coast projects — specifically for new 100% H2 pipelines, hydrogen storage facilities and CCS.
The seventh is labelled rather vaguely as “Hydrogen Electrolyser Capacity Deployment” — presumably a reference to the production of green hydrogen (see below).
The projects “will be accelerated as fast as possible, aiming to get the vast majority starting construction by the end of 2023”, says the Treasury document. “These projects may benefit from acceleration through planning reform, regulatory reform, improved processes or other options to speed up their development and construction, including through development consent processes.”
It adds: “Presence on this list does not guarantee, where applicable, funding, planning consent or approval for other regulatory or permitting processes.”
In July, the UK government opened the world's first national clean-hydrogen subsidy scheme — a Contracts for Difference-style set-up that will help fund an initial 1GW of green H2 and 1GW of blue, with a goal of reaching 10GW of “low-carbon” hydrogen by 2030.
It was announced by then-energy secretary Kwasi Kwarteng, who is the new Chancellor of the Exchequer that unveiled today’s emergency budget after 17 days in the job.
