UK Hydrogen Strategy: What does it mean?
Over the next few years, the prevalence of low-carbon heating technologies will rise significantly, bringing big changes in how the UK’s buildings are heated. Hydrogen is one of the key energy sources forming part of this conversation.
The UK Hydrogen Strategy gives clear direction on the Government’s commitment to the role this low carbon fuel source can play in meeting its target of becoming net zero by 2050 and builds on ambitions previously outlined in the Government’s 10-Point Plan and Energy White Paper. However, it highlights the uncertainty remaining on the scale and demand we can expect to see in the future, with hydrogen expected to form between 20-35% of the UK's energy consumption by 2050 and no final decision on the role of hydrogen in buildings until 2026 after the hydrogen village trial in 2025.
The immediate focus is on growing the infrastructure and capability to generate, store and distribute hydrogen, whilst in parallel creating and increasing the demand for hydrogen itself. Two key initiatives coming out of the strategy to support those researching, producing and utilising hydrogen are the £240m Net Zero Hydrogen Fund to provide co-investment for new production capacity and the Hydrogen Business Model encouraging producers with revenue support levelling up cost of hydrogen against existing fuels in the short term.
Hydrogen is seen as a key technology in facilitating the UK’s pathway to achieving its net zero goal. It offers several benefits which give it great potential as we transition to a low carbon economy.
• A green fuel source - when burned, hydrogen creates just water vapour and heat, and produces no CO₂ emissions
• Easy to store – hydrogen can be compressed, held in salt caverns or liquified, making it easy to store for use
• Energy potential – hydrogen contains a large amount of energy and gives comparable high efficiencies to condensing natural gas boilers today
• Utilising the existing infrastructure – there is potential that hydrogen can utilise and be delivered using the existing gas network infrastructure, making it one of the more cost-effective routes to decarbonising heating
The need for investment
There are still many challenges in delivering hydrogen so investment in production capacity and interventions that targeting support and regulation across the wider value chain is required.
A potential barrier to the implementation of hydrogen is cost, as it is currently unknown how this will compare to natural gas. UK regulator Ofgem laid out its role in supporting the development of a low carbon hydrogen economy to the Government and experts are confident that costs will improve in the coming years.
However, with green hydrogen requiring electricity for production, and electricity costs currently three times higher than natural gas, it is clear why the hydrogen business model is needed to be reviewed and managed for hydrogen to become a significant fuel source of the net zero energy market.
Increasing demand across all sectors of the economy
By 2030, hydrogen will start to play an important role in decarbonising many sectors, with the Governments ambition of 5GW low carbon capacity by 2030 and the decarbonisation of existing hydrogen production. Sectors that can benefit include polluting and energy-intensive industries like chemicals and oil refineries, heavy and long-distance transport, such as shipping, HGV lorries and trains, and provides flexibility to power generation, helping all these sectors move away from fossil fuels.
Hydrogen is likely to be fundamental to achieving net zero in the wider transport industry and industrial sectors and are crucial early markets for hydrogen by 2030. There is a range of funding available for fuel switching to hydrogen, a £315 million industrial energy transformation fund and a call for evidence on hydrogen-ready industrial equipment to be launched later this year.
What it means for heating
Hydrogen-ready boilers that can burn either natural gas or, via a conversion, 100% hydrogen can provide a direct replacement for an existing natural gas boiler when the gas distribution networks move. Hydrogen-ready boilers are currently in prototype stage, but it is anticipated that they will become fully approved for use in the coming years.