This piece is by our managing director Tom Lees.
“There is no public policy case for hydrogen heating”
On Wednesday the National Infrastructure Commission (NIC) published its assessment of the future of infrastructure (NIA) in the UK in the next 30 years along with recommendations to ministers.
Probably the most eye-catching - and in some quarters controversial - recommendation was to rule out the use of hydrogen to heat homes instead strongly favouring heat pumps, heat networks and other electrical heating in some cases. There is no public policy case for hydrogen heating are the damning words of the NIC. But how and why did they come to this conclusion?
First, some background. The NIC was created by George Osborne in 2015 as an independent expert body to provide analysis and advice to the government of the day. The NIC has nine expert commissioners (Sir John Armitt, Julia Prescot, Prof Sir Tim Besley CBE, Neale Coleman CBE, Andy Green CBE, Prof Jim Hall, Prof Sadie Morgan OBE, Kate Willard OBE, Nick Winser CBE) is supported by a secretariat of policy and economics civil servants and also commissions technical analysis and reports from the likes of Steer and Arup in particular areas.
As well as the 200-plus page NIA document itself the NIC also published a number of different technical annexes (often of similar length to the main document) to further explain their reasoning and recommendations. For the energy and heating network, Arup and Aurora provided additional technical work and analysis to the NIC and Ofgem. It is worth pointing out that Nick Winser CBE FREng - one of the commissioners - also spent 30 years in the energy sector including 12 years at National Grid (including as CEO) when it ran and owned the UK's gas network.
The NIC assessed the case for hydrogen heating using six criteria: price (negative assessment), quality (neutral assessment), delivery (negative assessment), environment (negative assessment), resilience (negative assessment) and the economy (neutral assessment).
So, why does the NIC/Arup/Aurora/Ofgem analysis come to these conclusions? Below are the key points they make.
Clearing up some myths
The NIC recommendation still allows for the commercial development of hydrogen heating if investors/consumers see it as a viable product.
They don't recommend heat pumps for everyone and every situation. They want a hydrogen network for heavy industry and think that some homes are better served by heat networks or other types of electrical heating.
The NIC advises the government it doesn't decide on policy itself.
Would a future Labour government agree? It is not clear. There will clearly be a lot of intense lobbying from gas distribution networks whose existence is threatened by the NIC's recommendation. However, the NIC is an independent expert body and one of its commissioners (Neale Coleman CBE) is a former Director of Policy for the Labour Party.
Background facts
Gas boilers currently heat around 88% of English buildings.
Decarbonising the heating systems of around 29 million homes in Great Britain by 2050 is a major delivery challenge which will require significant coordination
Low-carbon hydrogen production is currently close to zero.
The production of 'green' hydrogen requires electrolysis. This is the process whereby low-carbon electricity is used to split water into its component parts of hydrogen and oxygen. This takes quite a lot of energy.
Large amounts (83%) of the existing gas is suitable for hydrogen although this is less clear for the high-pressure parts of the network.
Storage, customer meters, boilers, cooking appliances would all need to be upgraded/replaced.
It would be a complex task to transition the gas network to a future state with some combination of operating with hydrogen and decommissioning certain parts.
The NIC analysis focused on domestic heating, but they say their results are equally applicable to heating business premises.
Costs - Negative Assessment
The hydrogen network modelling looks at three scenarios (1 - no hydrogen heating, 2 - 13% hydrogen, 3 - 38% hydrogen) which give ranges of £45-64bn that would need to be invested to use gas in varying quantities (high/balanced/low) plus costs for upgrades in the home (e.g. a new boiler).
The NIC concluded costs of heating are lower without hydrogen heating. The cost of producing hydrogen is forecast to outweigh the greater in-building capital costs of heat pumps.
They also suggest this is consistent across a range of property types:
Quality - Neutral Assessment
The quality of heat provided from hydrogen or heat pumps/heat networks is essentially the same.
Hydrogen requires fewer in-building changes although still requires a new hydrogen boiler. The change over from natural gas to hydrogen likely requires the home to be without supply for up to two days.
It is possible that a hydrogen supply may never materialise.
For a heating supply via a heat pump, first-time installation averages two to four days.
Delivery - Negative Assessment
The NIC thinks it's more complex and potentially more disruptive to roll out hydrogen heating.
The need for at least some upgrades to electricity distribution networks exists regardless of whether heat is electrified – for example, to ensure there is sufficient electric vehicle charging infrastructure.
The production of hydrogen is 'less direct' and less efficient. It requires the creation of new low-carbon generation supplies (in competition with other needs) that then is used for electrolysis to create energy which is then piped into homes which is then burnt. It is simpler to use the low-carbon electricity directly for use in heating homes via heat pumps.
The need to scale up hydrogen production and provide pipelines means it is not possible to begin at-scale conversion of homes to hydrogen until the mid-2030s. Heat pump technology already exists, is well proven and is being deployed at pace across developed countries (although the UK is behind).
Environment - Negative Assessment
Hydrogen produces no carbon dioxide when it is burned, but it is an indirect greenhouse gas, meaning it affects how long greenhouse gases, such as methane, remain in the atmosphere. This means that if it leaks then it has a higher global warming potential than carbon dioxide.
Gas network leakage today is generally thought to be very small as a proportion of gas transported which would be similar for hydrogen.
In the long term the Commission expects that hydrogen supply will be predominantly from green hydrogen produced using decarbonised electricity. However, if blue hydrogen production is higher in systems with hydrogen heating then this would entail higher emissions. Some increase is plausible given the challenges around hydrogen supply.
Burning hydrogen also creates nitrogen oxide emissions.
Resilience - Negative Assessment
Resilience to shocks to the electricity system does not differ. Both heat pumps and hydrogen heating require electricity to function.
Exposure to volatile natural gas markets could be higher with hydrogen heating, if additional natural gas is required to produce hydrogen or to produce the additional electricity needed.
The Economy - Neutral Assessment
The benefit to the UK is likely to be similar for both hydrogen heating and heat pumps as the main source of home heating.
On the face of it the NIC presents a compelling case as to why hydrogen heating is not a viable solution over the next 30 years. It will be interesting to see how and if their analysis holds up under intense scrutiny from the gas companies.