Utility Week

UTILITY WEEK | OCTOBER 2021 | 19 Policy & Regulation tegic plan is to principally decarbonise heat through electricity, the clearer the market signal you send the more scale investment you will see and the more rapidly you will see costs come down. "The worst of all worlds is that by gov- ernment hedging its bets on all technologies and not sending signals to the market, you won't see the cost reductions we need to see in heating." While acknowledging that hydrogen may play some role in heating, Lord is uncon- vinced that it can do the heavy li• ing in the UK's homes. Arguing that hydrogen produc- tion will be limited until the 2060s, he says the government should focus the use of the scarce resource on areas where it can most e€ ectively be deployed. "The evidence sug- gests that home heating is not the most e€ ec- tive place for it to be used," he says. Noting the analysis by the Climate Change Committee (CCC) that the most valuable role for hydrogen will be in hard-to-decarbonise areas area such as heavy industry, Lowes says: "There is a role for hydrogen in the energy system but it's the champagne and not the water. It's ineˆ cient and expensive, so why would you use that for the bread and butter?" Hydrogen-ready boilers 'are no regret' The clearest signal on heat contained in the paper was the strategy's announcement that the government is working towards a 2026 timetable for making all new boilers hydro- gen compatible. Needle expresses frustration that the mooted timetable for hydrogen-ready boilers is not swi• er. She says: "Waiting makes no sense. Even if the boiler never sees hydrogen, it's a complete no-regrets: I don't know why you would wait." But the industry needs time and money to switch over its production lines to manu- facturing hydrogen-ready devices, says Fos- ter: "We need to give manufacturers time to retool. It's not something that can be done overnight." Noting that manufacturers have commit- ted that customers won't have to pay any extra for a hydrogen-ready boiler, Foster says: "The consumer won't pay any addi- tional amount and over time at a replace- ment rate of 1.6 million boilers [per annum] by 2040, you could pretty much replace the whole housing stock of natural gas boilers with hydrogen-ready boilers. This gives max- imum – exibility for policymakers to choose what route they want. "It's a smart way of making the transition." Dr Keith MacLean OBE of Providence Pol- icy, agrees, saying: "Hydrogen-ready boilers is literally a no-regrets option. "For on-grid areas, keeping options open with hydrogen-ready boilers is an absolute no-brainer." But Ganbold is concerned that while the boilers themselves may be hydrogen ready, it will take several years for the grid to catch up. During the intervening period they will still be running on gas, she says: "It's push- ing the decarbonisation of heating even further back because you will then have to wait for the entire gas supply to be hydrogen asžwell." Blue vs green The government has not allayed these fears over the sustainability of hydrogen by say- ing in the strategy that it wants to pursue the development of both so-called "green" and "blue" hydrogen. Green hydrogen is made using electro- lysers to release hydrogen from water. Blue hydrogen, meanwhile, is produced from natural gas with released emissions trapped with carbon capture and storage (CCS) technology. The hydrogen strategy says the two ver- sions of the fuel may hit production cost par- ity as soon as 2025. The government's decision to ride both the green and blue horses has proved contro- versial, triggering the resignation of the chair of the UK Hydrogen and Fuel Cell Associa- tion, Chris Jackson. He has subsequently gone public with accusations that the government has caved into pressure from fossil fuel companies, which view blue hydrogen as a way of stay- ing in business. Dr David Jo€ e, head of carbon budgets at the CCC, recently told Utility Week that blue hydrogen should be treated as a "supply of last resort". (Jo e is interviewed overleaf). But MacLean defends the government's move, even though it threatens to put the UK out of kilter with the EU's recent decision to put its eggs in the green hydrogen basket. He says: "The twin-track approach makes sense. To make early steps with cheaper blue hydrogen still makes big steps forward in carbon reduction. "It may not be optimal but it's not bad as long as it's done with CCS." Lowes thinks the opposite, that the gov- ernment should have bitten the bullet and opted for a green hydrogen-only approach. "We know it [blue hydrogen] is limited in terms of its long-term prospects and is reliant on fossil fuel gases," he says. If blue hydrogen is to be used, Lowes says its production must be tightly regu- "There is a role for hydrogen in the energy system but it's the champagne and not the water. It's ineffi cient and expensive, so why would you use that for the bread and butter?" Dr Richard Lowes, senior associate, The Regulatory Assistance Project "It's kicking the can quite far down the road because people need to invest now in the right technology. It's disappointing that they are going to delay the decision for four or fi ve years." Anise Ganbold, global energy markets lead, Aurora Energy Research "We need to give manufacturers time to retool. It's not something that can be done overnight." Mike Foster, chief executive, Energy and Utilities Alliance lated in order to prevent leakages as much as possible. Pointing to recent US research, Lord says the risk of escaping methane emissions must be taken seriously and the full cost of captur- ing them taken into account when consider- ing the economics of blue hydrogen projects. While it makes sense to explore blue hydrogen in order to learn more about how to produce the fuel, the government should tread warily, Lord says: "We need to be care- ful not to overcommit on blue hydrogen." David Blackman, policy correspondent • Discover the practical next steps for a hydro- gen rollout at the Utility Week Hydrogen Forum, 17 November 2021. Visit: https://event.utility- week.co.uk/hydrogen/

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