Hydrogen UK, a trade association with strong links to the British government, has presented a new list of policy recommendations — “Hydrogen Accelerators” at the ruling Conservative Party’s annual conference, including targeting the heating of one million homes with H2 by 2035.
The recommendation comes just days after a peer-reviewed report in the Joule scientific journal pointed out that 32 independent studies all found that using hydrogen for heating would be far more expensive than other clean alternatives in almost all circumstances.
In simple terms, using green hydrogen for heating would require five to six times more renewable energy than if clean electricity was used directly by heat pumps, while using blue hydrogen (derived from natural gas with carbon capture and storage) would require two to three times more fossil gas per unit of heat due to H2’s lower energy density by volume.
The Joule report prompted Michael Liebreich, the influential founder of analyst Bloomberg New Energy Finance and a long-term Conservative Party supporter, to say: “No serious analysis has hydrogen playing more than a marginal role in the future of space heating... It's time to stop the fight: the judges are unanimous and the winners are district heating, heat pumps and electrification.”
The UK government — currently reeling from a cost-of-living crisis brought on by sky-high natural gas prices — has previously stated that it would not make any decisions about the use of hydrogen in domestic heating until 2026.
This has not prevented Hydrogen UK — whose members include three of the four British gas distributors and a host of gas-reliant companies — from lobbying for the use of H2 to heat British homes.
“Hydrogen offers the UK an unprecedented opportunity to unlock economic growth and clean jobs while delivering on our net zero commitments. However, rapidly accelerating international investment means we will have to move quickly to secure our position in a global market predicted to be worth $2.5tn by 2050,” says Hydrogen UK in the introduction to its Hydrogen Accelerators document.
“Hydrogen UK has worked closely with policy makers and Ministers over the past year to develop world-leading hydrogen production business models to unlock hydrogen production at scale.”
But this is not enough to “maintain progress”, it adds.
“This document outlines the detailed steps that industry and Government must take together to accelerate hydrogen’s journey in the UK.”
The trade body’s “Hydrogen Accelerators” policy recommendations include:
- Setting a target for one million homes “to be heated by hydrogen by 2035”;
- A government commitment to mandate that all boilers sold from 2026 are “hydrogen-ready”, but would still burn methane in the meantime; and
- For ministers to commit to funding “hydrogen villages” — H2 heating demonstration projects in people’s homes “to maximise learnings for a future roll out”.
Hydrogen UK also calls upon the government to “confirm the role of hydrogen for domestic heat by end of 2026, subject to successful trials, and make clear in advance of this the nature of the decision framework and policy decisions that will be taken”.
Hydrogen UK chief executive Clare Jackson tells Recharge: “Hydrogen UK firmly believes that we will need a range of solutions to decarbonise heat for homes including heat pumps, hydrogen and district heating. It's important that we leave all options on the table so that people have access to a range of affordable and low carbon ways to stay warm.”
Other controversial recommendations include:
- Funding “all eligible carbon capture projects... where compliance with future carbon budgets and trajectory to net zero is demonstrated”;
- To have no additionality requirements for any form of low-carbon hydrogen; and
- The government to support the blending of H2 into the gas grid — which would increase energy costs by about 33% in 2030, while only reducing emissions by roughly 7%.
“Additionality” refers to the concept of only allowing green hydrogen production to be powered by new renewables or nuclear projects, so that the current electricity supply is not cannibalised for H2 production and thus slow the decarbonisation of the power system. Hydrogen UK also says there should be no additionality requirement for the production of blue, nuclear-derived, or biomatter-based hydrogen.
By contrast, Hydrogen Europe, the main trade body for the European H2 sector, is campaigning for additionality requirements for green hydrogen production across the EU.
The UK trade association is a vocal supporter of blue hydrogen, with proponents such as Equinor and ExxonMobil among its members.
Influence of gas lobby in UK Parliament
And its influence seems to be paying dividends. When the new Chancellor of the Exchequer, Kwasi Kwarteng, unveiled his extremely unpopular mini-budget last month, it included commitments to accelerate the delivery of two “vital” blue hydrogen projects in northern England: Hynet North West and the East Coast Cluster.
Kwarteng had been the first to speak at the launch event for Hydrogen UK (then known as the Hydrogen Taskforce) in Parliament in 2020 when he was energy secretary.
Questions have also been raised over an apparent lack of understanding about hydrogen among top-level British politicians, prompting several commentators to wonder who they were getting their advice from.
For instance, new energy secretary Jacob Rees-Mogg recently declared in Parliament: “I think hydrogen is ultimately the silver bullet. We create it from renewable sources, because we have the wind power when people are not drawing on the electricity system; we use it as an effective battery and it can then, with some adjustments, be piped through to people’s houses to heat them during the winter.”
As Recharge has peviously written, the economic case for using curtailed wind and solar to power electrolysers is thin at best. The low utilisation rate — estimated to be around 10% by the International Renewable Energy Agency — would not produce enough hydrogen to make the investment worthwhile for an H2 producer.
The UK’s curtailment level is actually even lower, at a little over 3%, due to it having more installed wind capacity than solar, while it is clear that powering electrolysers with curtailed renewable energy would not produce anywhere near enough H2 to decarbonise the country’s heating.
According to the MCS Charitable Foundation, there are an estimated 120 paid hydrogen lobbyists operating in the UK parliament at present.
And they seem to be successful in getting their message across to British lawmakers.
The UK’s All-Party Parliamentary Group on Hydrogen (APPG) — an informal self-appointed group of Members of Parliament with no official status that promotes the conversion of the country’s domestic gas grid to hydrogen — is hosting an event on 24 October entitled “Hydrogen in Homes”, with speakers from Scottish Gas Networks, boiler maker Valiant and gas-focused lobby group Energy and Utilities Alliance (EUA).
The EUA is one of the 12 sponsors of the Hydrogen APPG, all of which have fossil-gas interests and strong reasons to support the use of hydrogen for domestic heating, leading to accusations about the influence of special interests in Parliament.
Campaigning for all possible uses of hydrogen
While many governments and organisations around the world are focusing on the use of clean hydrogen to decarbonise hard-to-abate sectors where electric solutions are not possible or unlikely — such as long-distance shipping and aviation, chemicals production and steelmaking — Hydrogen UK is campaigning for the use of H2 in every possible application, including to produce electricity and to power cars.
It is also arguing that the demand for hydrogen be stimulated through government subsidies, even though the UK currently produces around 700,000 tonnes of highly polluting grey hydrogen from unabated fossil gas each year — which would require somewhere in the region of 8-10GW of electrolysers if replaced by green hydrogen. The UK aims to install 5GW of electrolysers (and a further 5GW of blue hydrogen) by 2030.
The trade body argues in its Hydrogen Accelerators proposals that support for blending would help the production of clean hydrogen to “scale up”.
Another recommendation is to “provide short-term CAPEX [capital expenditure] subsidies to support the uptake of hydrogen cars, vans, buses, trucks and trains, stimulating demand for hydrogen in the transport sector”.
In addition to requesting government financial support for hydrogen-powered land transport, CCS projects and H2 villages, it also calls for:
- Increased funding to enable 750MW of green H2 projects in each of the first two Hydrogen Business Model Electrolytic Allocation rounds (up from a maximum combined total of 1GW);
- Funding (as well as regulatory reforms) to allow hydrogen to play a role in capacity and dispatchable power markets;
- Support for “public procurement schemes for carbon-intensive products manufactured using low-carbon hydrogen”;
- Incentives for local authorities that “partner with UK hydrogen bus developers for their local transport network”;
- “Improved investment” in research and development for the use of hydrogen or its derivatives as shipping and aviation fuels.
Other proposals include:
- Amending the Renewable Transport Fuel Obligation, which requires producers to add biofuels to petrol and diesel, to include fuels derived from low-carbon hydrogen;
- Setting a target of 200 H2 refuelling stations across the UK by 2030;
- Requiring 1,000 of the 4,000 zero-emission buses that the government wants to see on the road by 2025 to be powered by hydrogen;
- Committing to a pilot Guarantee of Origin scheme to certify the source of each batch of clean hydrogen;
- Consulting on the requirements for future rules governing the international trading of H2 and its derivatives;
- Ensuring that “suitable transportation and storage business models are in place no later than 2025 to enable the development of hydrogen networks and storage infrastructure, with early support for low/no regrets and systemically important projects so construction can commence by the end of 2023”;
- Implementing measures to speed up consenting for major energy infrastructure;
- Committing as soon as possible to the development of a national 100% hydrogen pipeline network to link industrial clusters, in order to “enable conversion work to commence in 2026”;
- Amending current regulatory frameworks to allow the use of hydrogen in gas networks;
- Reducing VAT on hydrogen from 20% to 5% (in line with natural gas);
- Exploring the use of Carbon Contracts for Difference, or other measures, to encourage the use of hydrogen in industry; and
- Introducing carbon border adjustment mechanisms to ensure that imported goods made using cheaper grey hydrogen are taxed to prevent them from having a competitive advantage over domestic goods produced with more expensive low-carbon H2.
