Date Published: May 2022
A Hydrogen Vision for the UK
E3G, an independent climate change think tank, has just published its recommendations for the strategic use of hydrogen: Between Hope and Hype: A Hydrogen Vision for the UK.
This excellent 35 page report is highly recommended for a serious independent look at how the UK can best use hydrogen to achieve its Net-Zero targets.
For those short of time, the conclusions of the E3G report are reproduced here:
In order to realise the positive benefits that hydrogen can offer for climate targets, jobs and levelling up, the UK Government should focus on green hydrogen development – wherein the greatest gains in the international innovation race can be reaped.
A ‘twin track’ approach that pursues both green and fossil-based, blue hydrogen risks locking in high carbon technologies and infrastructure. Instead, the UK’s competitive advantage lies with its offshore wind potential, which can support green hydrogen development and deployment in key industrial clusters and hubs.
A system-wide stock take is required to identify where green hydrogen does – and does not – add value and provides the most cost-effective route for decarbonisation.
This paper considers the key factors that should underpin BEIS’s forthcoming Hydrogen Strategy, and presents evidence to inform a strategic vision that supports key Government priorities – including an inclusive and resilient economic recovery from the pandemic; demonstrating climate leadership and progressing towards emission reduction targets; and reducing regional inequalities through the ‘levelling up’ agenda. Key recommendations are summarised below.
A hydrogen strategy for an inclusive and resilient economic recovery
There is a role for zero-emissions green hydrogen to support competitive industrial clusters, located across the country to support the ‘levelling up’ agenda, with successful delivery strongly dependent on a rapid upscaling of renewable electricity generation and efficiency gains to reduce overall energy demand. To take this opportunity, green hydrogen must be strategically developed and deployed in sectors and regions where it adds most value, i.e. where other decarbonisation pathways are not currently available.
- We recommend the Government focuses deployment of green hydrogen within sectors that do not have alternative decarbonisation options. This should be enshrined in the forthcoming Hydrogen Strategy through ensuring targets focus on green hydrogen, and be underpinned by a supportive policy framework, principles, regulations, and incentives.
- It is essential the Government clarifies its focus in terms of production and end-use in the Hydrogen Strategy, to ensure cost-effective use of public funding, in line with a zero emissions pathway. A fair, market-led innovation race can be supported; while the Government focuses support where it adds most value for climate and jobs. This requires a systems approach to identifying regions and sectors where support is targeted, which is then reflected in policy and funding prioritisation.
A hydrogen strategy for climate leadership
The UK’s competitive advantage can be secured if it chooses a green hydrogen path, sourced through harnessing the full potential of the country’s offshore wind resources. Blue, fossil-derived hydrogen depends on continued imports of fossil gas, whereas a focus on green can be supported through the UK’s enormous offshore wind potential.
Fossil hydrogen with Carbon Capture and Storage (CCS) – blue hydrogen – is not zero emissions, due to limitations of CCS, and methane leakages during gas production and transportation. Developing blue hydrogen does not accelerate development of green hydrogen on the supply side, since these are fundamentally different technologies.
Governance mechanisms are needed to avoid a locking in of fossil-derived fuels, with clear timelines and targets, accountability mechanisms, and regulations and standards which support the phase-out – for example, through a rising carbon intensity limit.
Rather than a ‘twin track’ approach, the UK should focus on green hydrogen. Doubling down on green hydrogen could play a significant role in addressing the next generation of deep climate challenges – including the decarbonisation of industry, freight and balancing the electricity system.
- The UK should show leadership on green hydrogen ahead of COP26, in parallel with seeking rapid growth in renewable energy. This could be demonstrated through setting targets and legal requirements around the relative levels of green and blue hydrogen, and committing public funding only towards supporting the development of green hydrogen. This will allow the UK to play an international leadership role on climate innovation, as other countries race to develop sustainable hydrogen solutions. In particular, the success of scaling green hydrogen will rely on the build out of offshore wind, with a need for a joined-up approach between Government departments and teams working on different parts of the energy transition.
- The success and scalability of green hydrogen are closely tied to rapid progress on efficiency and renewable energy needed for sourcing zero emissions green hydrogen. The UK must focus on securing the full potential of offshore wind, in parallel with making broader strides on renewables, grid flexibility, energy efficiency, and the circular economy – all measures which support lower cost pathways to decarbonisation. These have strong social, economic and environmental co-benefits, and should be central pillars of all decarbonisation strategies.
A hydrogen strategy that delivers for all
Understanding how and where hydrogen can most add value requires a system-wide analysis of the costs and benefits of different decarbonisation pathways, understanding which ones are most cost-efficient for the taxpayer, which offer the best option for consumers – including the most vulnerable – and which provide the best boost for green employment and skills.
For example, a growing evidence base suggests that hydrogen does not present a strategically credible option to decarbonise heat, and could lead to higher bills. Instead, to get on track for net zero heating, a sustained effort must be made this decade to deploy heat pumps in a way that makes the most of the inherent cost advantages and improves people’s lives. In light of the evolving science and potential conflicts of interest of market players, rigorous and independent analysis and systems governance must be ensured.
- The Government must ensure its decisions on hydrogen are rooted in independent science and evidence. Government discussions should not conflate blue and green hydrogen and should stop using ambiguous terms like ‘low carbon’ hydrogen. The Government must consult widely – and not just with industry – when developing its Hydrogen Strategy, and in the decision-making processes that follow, including by expanding the membership of the Hydrogen Advisory Council.
- Decision-making on hydrogen must consider and consult citizens – in particular the most vulnerable workers and households to ensure the approach works for everyone and gains public acceptability. Where deployment of hydrogen is likely to increase costs for households compared to other decarbonisation avenues – such as with heating – consumers should be able to choose alternatives.
- The Hydrogen Strategy must be accompanied by a robust jobs and skills agenda which involves and workers and their unions. The Government must act to ensure that jobs are created by hydrogen development are well paid and of high quality, as well as guaranteeing a ‘just transition’ for workers who may be impacted by a decline in fossil fuel infrastructure and supply chains.