In a report on “Hydrogen in the low-carbon economy”, the UK government’s advisory Committee on Climate Change (CCC) says that “producing hydrogen in low-carbon ways and using it to meet challenging demands (e.g. for heat in industrial processes, for heating buildings on colder winter days and for heavy transport) is likely to be an important part of the next stage of the UK’s energy transition”.
However, as I noted in my last post, the CCC sees Power to Gas (P2G) production of hydrogen — using renewable electricity — as unviable. Although it says “the largest potential for hydrogen to contribute to decarbonisation is as a low-carbon fuel for heat in buildings and/or industrial processes”, it sees P2G as too expensive to meet these needs. “While there is some opportunity to utilise some ‘surplus’ electricity (e.g. from renewables generating at times of low demand) for hydrogen production, our modelling shows that the quantity is likely to be small in comparison to the potential scale of hydrogen demand,” the report says. “Producing hydrogen in bulk from electrolysis would be much more expensive and would entail extremely challenging build rates for zero-carbon electricity generation capacity.”
This seems oddly dismissive, given recent progress on reducing P2G costs (see my last and earlier posts) and given that P2G doesn’t need costly and uncertain Carbon Capture and Storage (CCS), unlike the route to low-carbon hydrogen favoured by the CCC — high temperature Steam Methane Reformation (SMR) linked to CCS. For example, a Sustainable Gas Institute review suggested that the cost/kW of hydrogen from P2G electrolysers will soon be less than that from SMR with CCS. However, the CCC does not actually see hydrogen playing a major role, at least for heating, so the debate over the P2G and SMR/CCS routes is more of a side issue on that front. Instead, the CCC now favours the use of electric heat pumps for bulk domestic heating.
This was the approach initially backed by the government, although reservations had subsequently been expressed. Given that the gas grid delivers up to four times more energy than the power grid, trying to meet heat demand by wire rather than pipe seemed likely to require very significant expansion or upgrading of the power grid system, especially since heat demand tends to peak in the early evening. Doubly so since, under the government’s plan, power from the grid would also be needed to charge electric vehicles (EVs), possibly at the same time.
However, it has been argued that the scale of the potential peak-demand conflict could be reduced to some extent if time-of-use power charges were imposed, so that EVs would be charged later at night, when demand was lower. The CCC has also now sided with the idea of combining heat pump use with booster power from gas-fired boilers (converted at some stage to use hydrogen) to meet peak demand, in a hybrid system: “based on new modelling, our assessment is now that heat pumps offer the potential to provide heat efficiently for most of the time, with hydrogen boilers contributing mainly to meet peak demands on the coldest winter days”.
So, some hydrogen is still needed, which implies developing the SMR/CCS route. The CCC also assumes that heat pumps can be made more reliable. Its CEO Chris Stark said that the CCC had initially been a “bit suspicious” of heat pumps but, although costs were still high, it was now confident enough to recommend their rollout in hybrid form. “Deployment of this combination of hydrogen and heat pumps could almost completely displace fossil fuel use in buildings,” the committee said. “While not without challenges, this solution would enable the energy system to reach very low emissions, with greater feasibility and public acceptance than is likely with strategies for the full electrification of heat or the full use of hydrogen as a like-for-like replacement for natural gas as we use it today.”
The CCC sees this approach as a low-cost mix, in part it seems since it sees electricity costs as falling. Maybe, but that would also make P2G cheaper. There are certainly other views, some of which claim that the hydrogen route could be the cheapest since, whatever the source of hydrogen, the gas grid would then still be used for most energy delivery, avoiding the need for electricity grid upgrades.
CCS or no?
The CCC doesn’t accept this: ”The sunk costs of having an extensive gas grid do not automatically mean that it will be lower cost to switch it over to hydrogen and use it in boilers as we do with natural gas at the moment. Our analysis finds that the costs of a range of pathways for heat decarbonization are similar, including those in which the gas grid has a much reduced role or is decommissioned.” What’s more, it says that “producing large volumes of hydrogen from natural gas with CCS could lock the UK into a path with insufficient emissions reductions by 2050 – this route offers a reduction in lifecycle emissions of 60-85% compared to natural gas boilers, so could leave residual emissions of 20-70 Mt. It also depends heavily on both deployment of CCS at very large scale and gas imports at around double today’s levels”.
So, it’s heat pumps and electricity as the main way ahead for heat, and not just in off-gas-grid areas, as is the current emphasis under the Renewable Heat Initiative. Heat pumps certainly can be very efficient. The CCC says 280–410% for their proposed system (i.e. COP 2.8–4.1), compared with 62% for the hydrogen route. But there are many cost unknowns in the system, including the cost of fitting heat pumps in every house across the UK.
These uncertainties may be one reason why an earlier EE/E4 Tech analysis saw the hydrogen route as cheaper, whereas an Imperial College study saw it as the most expensive, and the hybrid heat pump option as optimal. The Policy Exchange was annoyed by this confusion: “Granted, the model assumptions used by each organization are different. However, irrespective of the input assumptions, the overall lack of a coherent policy message is likely to obfuscate policy makers rather than enlighten them.” Well said! Moreover, there are broader policy issues. Cynics might say the heat pump choice is really because the CCC assumes there will be a lot of inflexible nuclear capacity — so some use must be found for its surplus output at night.
The debate on these issues has been a long one, and this may not be the last word, but using gas/hydrogen for peak heating does reduce stress on the power grid. And the CCC does also see hydrogen playing a role in power-grid balancing (feeding back-up gas plants), in industrial heating and also for HGV transport. So, we now have a new package to discuss, with hydrogen playing more of a role, but not a dominant one, and with the gas grid still being used for some heating. Not a terrible compromise, but whatever happened to heat grids? They can make a significant contribution in urban areas, but hardly get a mention. A new report from the Energy Technologies Institute says, “nearly half of heat demand could be met by heat networks”, with that option being cheaper in urban areas than all others, including the use of heat pumps or piped hydrogen. Maybe the CCC needs to rethink on that a bit. And also perhaps on biomass too: see my next post.