Hydrogen is gaining recognition as a vital component of the energy transition. Mark Venables investigates its role on the path to a net zero future.
The Paris climate accord committed the world to limiting global warming to well below 2°C above pre-industrial levels, while striving to limit it to 1.5°C. To meet this commitment, the world must bring CO2 emissions to net-zero by mid-century. Clean electrification must be at the heart of the global decarbonisation strategy, electrifying as much as possible while fully decarbonising electricity supply.
But there are some sectors where direct electrification is likely to be impossible or prohibitively expensive, and hydrogen will play a key role in decarbonising these. In steel production, it can replace coking coal as the energy source and reduction agent; in the form of ammonia, it could decarbonise long-distance shipping; and it is likely to play a major role as a storage mechanism within the power sector. Across these and multiple other sectors, total hydrogen use could grow from today’s 115 Mt per annum to around 500 to 800 Mt by mid-century, with hydrogen, and fuels derived from it, by then accounting for about 15-20 per cent of total final energy demand on top of the close to 70 per cent provided by direct electricity use.
A recent report from The Energy Transitions Commission (ETC), a coalition of more than 45 leaders from global energy producers, energy industries, financial institutions and environmental advocates, sets out the role for clean hydrogen and how a combination of private-sector collaboration and policy support can drive the initial ramp up of clean hydrogen production and use to reach 50 million tonnes by 2030.
The report ‘Making the Hydrogen Economy Possible: Accelerating clean hydrogen in an electrified economy’ outlines how clean hydrogen will play a complementary role to decarbonise sectors where direct electrification is likely to be technologically very challenging or prohibitively expensive, such as in steel production and long-distance shipping. A net zero GHG emissions economy by mid-century will likely need to use about 500 to 800 million tonnes of clean hydrogen per annum, a five-to-seven-fold increase compared to hydrogen use today.
Green hydrogen, produced through the electrolysis of water, is likely to be the most cost-competitive and therefore the major production route in the long-term, due to falling renewable electricity and electrolyser equipment costs. It could account for approximately 85 per cent of total production by 2050. However, blue hydrogen, produced from natural gas with carbon capture (with greater than 90 per cent capture rates) and low methane leakage (less than 0.05 per cent), will play an important role in transition and in some specific, very low-cost gas locations.
Rapid ramp up is crucial
The report highlights how critical rapid ramp-up of production and use in the 2020s is to unlock cost reductions, bringing clean hydrogen costs below $2/kg, and to make mid-century growth targets achievable. However, even once clean hydrogen becomes cheaper than grey hydrogen, using hydrogen in different industry and transport sectors will often still impose a green cost premium compared to current high-carbon technologies. Public policy is therefore essential to drive uptake of clean hydrogen at pace. Policymakers will also need to anticipate growing hydrogen transport and storage needs. In total, 85 per cent of investments required to ramp-up hydrogen production is for renewable electricity provision. Additionally, around $2.4 trillion, $80 billion per annum will be required between now and 2050 for hydrogen production facilities and transportation & storage.
“Hydrogen is widely expected to have a significant potential role in the energy transition, especially in hard to abate carbon sectors such as heavy transport, industrial applications, and long-term storage for power,” Enrique Glotzer, principal at Charles River Associates, says. “Hydrogen is one of the few options to decarbonise these challenging sectors, due to benefits such as storing large amounts of energy for long periods, use as a fuel feedstock, and combustion for heat.
“However, major new investments for hydrogen production, storage, distribution, and use will be needed to make the potential a reality. Historically, other industries have scaled in stages over several years, starting with the most attractive sectors and locations, hydrogen could follow a similar multi-year route. BP is taking such a staged approach with its recently announced Teesside hub of 500MW blue hydrogen plant by 2027 and 1GW by 2030 at an industrial centre near the North Sea – to store CO2 from its blue hydrogen and to access future offshore wind for green hydrogen.”
Recently, there has been a growing acceptance that hydrogen will see significant near-term growth, driven by supportive regulations, improving technologies, declining renewables costs, and growing demand for decarbonising the power, industrial, and transportation sectors. “There has been a rapid acceleration of the number and size of new projects across Europe, ranging from the MW initially to GW scale, confirming this broadening acceptance,” Glotzer adds. “However, there remains lack of clarity on how the industry will evolve and how rapidly it will scale, prompting fundamental questions for industry players about where to participate, how to compete, how to prioritise investments, and what capabilities to build.
“It is not clear that many of the new hydrogen entrants have found a way to link hydrogen to their strategies and underlying business models. Fundamentally, several factors need to occur for the industry to scale faster – advances in technology, accelerated cost reductions, business model innovation, and broad government support, including significant carbon prices.”
Are hydrogen technologies really the answer?
In 2008 Arul Murugan, principal research scientist at the National Physical Laboratory began a three-year PhD placement to a develop a novel method for producing clean hydrogen. Back then, it was not clear how prevalent hydrogen would be in the UK’s strategy for decarbonising energy. “I often had to answer the same question from professors in the audience, ‘Hydrogen really isn’t going to happen though, is it?’,” he says. “As a newbie to the world of hydrogen my answer at the time may have been ‘good question, if you leave your email address, I will get back to you on that’.
“Fast forward a decade and hydrogen has become a hot topic. The UK Government’s recently announced Ten Point Plan has the use of hydrogen as a key objective to reaching net zero, though ambitious targets such as establishing a hydrogen town and reaching 5 GW hydrogen production capacity by 2030. It also aims to end the sales of new petrol and diesel cars by 2030, which would require increased use of hydrogen fuel cell vehicles.”
Although hydrogen could be an excellent solution for decarbonising several sectors, there are still a lot of critics. Why? The simple answer is hydrogen is not the only option, and whilst some may be critiquing hydrogen as it competes with their own companies’ technologies, others may genuinely believe that going down the hydrogen pathway will be detrimental to the UK’s future.
“Hydrogen is complementary to our other clean energy technologies,” Murugan explains. “Let us look at heating. Eighty-five per cent of homes are currently heated by natural gas which of course leads to high emissions of carbon dioxide. From 2025 onwards the installation of natural gas boilers will be banned, under the Future Homes Standard, and one alternative option would be heat pumps or all-electric, however installing them in all UK homes would reportedly be too impractical and costly.
“This is why the UK gas grids are investigating hydrogen as an option to complement these other technologies; hydrogen-ready boilers that can operate on 100 per cent hydrogen have already been developed and trials to blend hydrogen at up to 20 per cent in natural gas are underway in the UK. We already have the gas network to supply this hydrogen across the UK which minimises costs for new infrastructure.
“There are also different routes for the hydrogen production itself. We could continue to utilise our existing natural gas supply by producing blue hydrogen, although this would require carbon capture and storage to remove any carbon dioxide produced. Replacing natural gas in the process with biomethane could make the process carbon negative (depending on the source). An alternative option is green hydrogen which can be produced by the electrolysis of water using the excess electricity from wind and solar power; sure, we lose efficiency, but this allows us to store unwanted energy for a time when we really need it.”
Creating demand for hydrogen
The current UK Government target of five GW of low-carbon hydrogen production capacity by 2030 would correspond to about 42 TWh of annual hydrogen production by 2030. “We believe that this target is achievable, particularly given the booming customer interest in clean and low-carbon hydrogen solutions,” Kelly Jiang, technology strategy and innovation analyst at Centrica Business Solutions, says. “However, clear government policy, funding for pilot projects and technology development, revenue support mechanisms for private sector investments in hydrogen projects, and support for clean industrial clusters that utilise low-carbon hydrogen will be necessary to achieve this target. We look forward to the release of the government’s Hydrogen Strategy in 2021 for more concrete details about actions the government will be taking to help industry achieve this target.
“The low-carbon hydrogen produced in 2030 will likely be a mix between green and blue hydrogen, with more blue hydrogen being produced. The cost of blue hydrogen is currently lower than for green hydrogen, mainly due to the cost of the electricity needed to power electrolysers. However, as more renewables come on the grid and the cost of electricity decreases, the cost of hydrogen produced by electrolysis will decrease as well.”
Currently, about eight times as much capacity for blue hydrogen production as green hydrogen production has been announced through 2028 in Europe. Therefore, it is expected that blue hydrogen will have an edge over green hydrogen, at least through 2030.
“To manage the inevitable fluctuations between the production of hydrogen and its consumption, there will be a need for hydrogen storage facilities of around 17 to 18 TWh by 2050, with around 40 per cent of hydrogen expected to cycle through storage,” Jiang adds. “Re-purposing Rough, an existing depleted gas field that historically has operated as a natural gas storage facility and is currently scheduled for closure in 2023, is expected to be the most cost-efficient option to meet this long-term need for hydrogen storage.”
Hydrogen and power generation
The energy landscape is rapidly evolving as we aim for net-zero carbon emissions. Work has already begun in the transition of gas networks from natural gas to green hydrogen. However, while hydrogen and natural gas blends can be transported using existing pipelines, high-purity hydrogen will require infrastructure upgrades to allow pipelines to cope with the increased flow and pressure.
“The UK’s first live pilot to introduce green hydrogen into a gas network to heat homes and buildings is fully operational at Keele University in Staffordshire,” Luke Worrall, business development manager at NerG, says. “Up to 20 per cent, by volume, of hydrogen was injected into the University’s existing gas network, supplying power to 100 homes and 30 faculty buildings.”
As promising as this might sound from a green energy perspective, introducing change is always a worry for businesses who fear they must upgrade their CHP systems in line with the evolving energy landscape. “For most people, it will not be cost effective to replace their entire CHP set up after only a fraction of its expected lifecycle,” Worrall, continues. “However, modern CHP units are hydrogen-ready, so you can start saving, reducing your energy spend immediately and be prepared for the upcoming changes. So, facility managers reluctant to generate their own electricity, out of concern that the system would be outdated when hydrogen is added into the gas network, need not worry.
“With the drive towards electrification, demands on the electricity grid will rise significantly and the grid itself will need to undergo significant infrastructure upgrades to cope. This means the importance of localised electricity generation using CHP systems will grow considerably to cope with the increased pressure on the grid.
“Furthermore, on-site energy generation increases a facility’s energy security by protecting it against problems associated with the national grid, producing electricity at the point of use. When operating in island mode, CHP systems produce electricity independent of the grid, enabling them to operate even in the event of an outage on the grid.”
As the energy landscape adapts to meet net-zero targets and begins to incorporate renewable sources of energy like green hydrogen, it is important that businesses respond in kind. By installing hydrogen-ready heat and power systems, businesses can reduce their energy costs now, while futureproofing their electricity supply and safeguarding their investment.
“The UK Government was the first G7 nation to commit in legislation to an ambition for reaching net zero carbon emissions by 2050,” Worrall explains. “Heat decarbonisation will play a crucial role in achieving this goal.”
The path to a hydrogen future
Collaboration between government, industry and academia is vital to making hydrogen generation as efficient as possible in the first place, and in installing the infrastructure to enable hydrogen use at scale. “What has been made very clear by both the Intergovernmental Panel on Climate Change (IPCC) and the Committee on Climate Change (CCC) is that our current plans for climate change mitigation are not enough,” Sam French, business development director, Johnson Matthey, says. “A net zero target requires systemic changes to the entire energy landscape. It is also clear that there will not be one single solution; we need a toolkit of technologies to address the wide range of energy uses that are supported by government policy and changes to how we live our lives. These technologies exist; however, there is no market or policy drivers in place for their widespread deployment.”
Hydrogen can then be used to produce heat and power or used in vehicles with a drastically reduced emissions footprint. “While there has been focus on fuel cell vehicles recently, it is the sectors more difficult to decarbonise that could benefit the most from hydrogen,” French adds. “How do we decarbonise domestic heating, provide flexible dispatchable power generation and decarbonise high-temperature processes in industry?
“As the availability of low-cost, low-carbon hydrogen grows it will find more application in other sectors with a lowering of associated cost from production at scale. A key recommendation from the CCC report and others over the last year is that we cluster low-carbon hydrogen production in areas of high-CO2 emissions so that we can cost-effectively implement CCS, also essential for a low-carbon society.”
Collaboration between government, industry and academia is vital to making hydrogen generation as efficient as possible in the first place, and in installing the infrastructure to enable hydrogen use at scale. “The UK has a great record of innovation, and the move towards a hydrogen economy offers great opportunities for UK plc to implement existing technologies based on hydrogen, and to develop new, more efficient ones, which other countries will need as they also look to decarbonise their economies,” French concludes.
“Relative to some of the world’s larger economies, the UK’s impact on the global climate through its energy use is small. But supporting the hydrogen economy and leading by example can set a standard for other countries to follow. If the UK gets its own hydrogen economy right, there is every chance that others will too. With the right commitment to learning by doing, collaboration and investment, it could emerge as a world leader in this vital source of alternative energy.”