Is the UK’s hydrogen strategy propping up the gas industry?

11th September 2021 | Commercial Energy

In August, the government finally published it’s hydrogen strategy with great aplomb. For several years the government has made it clear that it sees the nascent hydrogen industry as a major piece in tackling climate change (a view shared by the Green Party of England and Wales), a major economic opportunity (as does the European Union), and a source of jobs for deprived areas that could drive Conservative electoral success. However, the choices made in the hydrogen strategy clearly prioritise the latter two objectives at the expense of climate action. It confirms some of the worst fears of environmentalists who warned that hydrogen could be a back door for the gas industry to perpetuate its hold on energy policy at the expense of everyone else.

What can hydrogen do?

One of the reasons for the excitement that hydrogen has generated in recent years is that it holds out the promise of the technological fix for the range of energy sources. Hydrogen at the point of burning generates no greenhouse gases, in stark contrast to similarly energy dense sources such as methane or natural gas. This means that it is potentially useful for some industrial processes that cannot currently be electrified. It may be able to provide carbon free transport for large vehicles in a manner batteries cannot yet do, such as for shipping, heavy goods vehicles and maybe even at some point in the future, planes. One use of hydrogen could be in replacing the gas network with some retrofitting for pipes and cooking appliances.

Hydrogen paired with ammonium can also theoretically be transported around the world in a manner similar to oil, but that electricity cannot. Thus opening up the possibility for Europe to access the abundant renewable energy resources of Australia. It can also be stored inter-seasonally, potentially enabling a balancing of a European electricity grid that often finds itself with a surfeit of electricity in April, while struggling to keep the lights on in November.

A helpful diagram by Michael Libreich at Bloomberg highlights the sectors where hydrogen is the only option – primarily industry.

This all sounds great, and governments around the world are very excited. As are the utilities and gas sector. As hydrogen is a gas, it will be transported using their pipes and likely stored using their expertise.

This technology exists but is not present at scale yet. There are some hydrogen villages with hydrogen buses and hydrogen heating, but a mass transformation requires a massive and expensive infrastructure change. The cost of retrofitting Leeds for hydrogen use alone is approximately £2 billion. There is also not presently enough hydrogen production. Just 1GW of Green Hydrogen capacity exists in Europe, while UK domestic heat demand annually is around 434 TWh. This is another reason why the gas lobby is excited.

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Is the UK’s hydrogen strategy propping up the gas industry?