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A Hydrogen Energy Future Can Take Our Economy to New Heights

Hydrogen
Jake Tudge National Gas

Jake Tudge

Corporate Affairs Director National Gas

Jake Tudge discusses the future of clean energy.

Gas is one of the UK’s great underappreciated industries and a hidden hero of our energy system. I started my career as an engineer working on gas turbines and saw first-hand how gas keeps the lights on and keeps Britain moving by heating homes and powering industry. That experience, in a hard hat and high viz, made me a strong advocate for our great gas industry. However, I am also an environmentalist and I know we need to decarbonise.

The 2050 Net Zero target is the right thing for our planet and our economy. However, we must get there in a way that resolves the so-called trilemma. This grapples with the question of how we reach Net Zero while also keeping costs down and ensuring our energy security in an era where great power competition between nations is returning.

Producing More Homegrown Clean Energy

The answer is obvious: we need to produce more homegrown, clean energy here in the UK. Doing that, however, is far from straightforward. Currently, too much time is being wasted arguing about which energy source is best, when it is widely accepted the UK needs a dual energy system to ensure a cost-effective and resilient energy system – combining electricity and natural gas now, with hydrogen replacing natural gas in the future.

A single-source power system based on electricity is flawed for several reasons. First, it doesn’t offer choices to customers. We are currently seeing this with heat pumps, which are being pushed as the only solution to replace natural gas boilers, when we should be looking at developing other alternatives – including hydrogen-ready boilers. We know that even if we insulate every home in the country, there will still be homes unable to accept heat pumps, owing to space and other physical restrictions. Any good consumer champion will tell you that the more choice there is, the better life is for the consumer and the better protected they are.

Second, we need a system that can cope with high levels of demand and doesn’t collapse at peak times. The problem with relying solely on solar and wind power is that the sun doesn’t always shine and the wind doesn’t always blow. That may sound trite but, by its nature, renewable energy is intermittent. Gas – because it can be easily stored and is flexible – plays a vital role by filling the gap when demand is high. In April this year, almost half of this country’s power came from gas. Last year, there were 89 days when gas made up over half of the average daily electricity generation. It keeps the lights on in a way that renewables cannot. It is dependable and a crucial part of our energy mix now, and it will be in the future via hydrogen.

Hydrogen is a clean, homegrown replacement for gas that can help the UK meet its Net Zero obligations. Green hydrogen is produced through electrolysis – where hydrogen is made by passing an electrical current through water. Electrolysers can convert excess renewable energy at peak times of wind and solar, which would otherwise be wasted, into hydrogen, which can then be stored for long periods of time and used when renewables fail to deliver the full power that the UK needs. Hydrogen can be used for heating homes, creating renewable fuel, and even fertiliser for our prized farming industry. Hydrogen has the potential to replace the methane currently used by heavy industry, preserving UK manufacturing jobs while still helping us reach Net Zero. It’s even expected to inject £11 billion of private investment into the economy by 2030 and create 100,000 jobs by 2050.

This brings us to the third point, solely using electricity presents a huge risk to the livelihoods that depend on gas today. Natural gas supports many thousands of jobs and powers more than 500,000 businesses, primarily outside the South East. For many, electrification simply isn’t an option. Almost a third of industries can’t electrify, including steel and aviation. Many rural homes and low-income families can’t install heat pumps and, if we write off hydrogen, we have no low-carbon alternative for them.

“We need to produce more homegrown clean energy here in the UK”

Jake Tudge, Corporate Affairs Director, National Gas

This is why developing a hydrogen economy here in the UK is so important. It represents a historic opportunity to build a new job-creating, export-led industry that will help us reach Net Zero and boost our energy security. The Government believes this could bring 12,000 jobs by 2030, many outside
London, which will help turbocharge levelling up. It is a clean energy source, with academics and government recognising it as a vital component of Net Zero. It can also be homegrown at scale, protecting the UK against the vicissitudes of an increasingly uncertain world.

Far from being a leap into the dark, adopting hydrogen is the next logical step in the evolution of gas as an energy source. In the same way that the UK moved from coal to electricity, we must make the transition to hydrogen for the good of the environment, our economy, and society. We moved 14 million homes and businesses from town gas, which comprised hydrogen, to natural gas in the 1960s and 1970s, which shows what is possible and that major transitions like this can be delivered.

We must grab the opportunity with both hands and not repeat the same mistakes that saw us lose out to other countries on wind and battery power. Otherwise, we will have to send jobs offshore, resulting in the UK needing to import technology from other economies.

One of the arguments levelled against hydrogen is cost. However, people have short memories. The same argument was made against wind and solar power in their infancy, but costs fell dramatically as investment poured in, technology developed and adoption by industry and business increased. The introduction of Contracts for Difference saw wind power costs fall 80 per cent, which shows how costs can come down, with the right support, whilst attracting significant volumes of private capital.

To get hydrogen up and running as an industry, we need to start making the necessary decisions now. Active industrial policy and well-targeted subsidy helped make renewables commercially viable and accelerated development – the same is happening with hydrogen but we need to go further and faster, including committing to early decisions and funding for ‘no regrets’ infrastructure to connect large industrial centres of demand and create a single economy for hydrogen.

The Sector Stands Ready to Support the Government

Government deserves credit for the progress made so far, both towards Net Zero and a hydrogen future. The former Department for Business, Energy and Industrial Strategy pushed through the Climate Change Act and Net Zero target and produced a Hydrogen Strategy and British Energy Security Strategy. The gas industry was proud to be involved in that and stands ready to help the Government deliver on the potential and promise of that work.

To make further progress, we need to move quickly. We need to protect UK interests in a growing green global market, while ensuring we have the necessary infrastructure in place for a range of energy sources, so we can make the move to clean power. Many of our competitors, including the EU and US, have stolen a march. The US Inflation Reduction Act has positioned the US to be one of the lowest green hydrogen production cost regions in the world. Yet, we haven’t responded to either strategy with our own plan.

What is clear is that we can’t work in isolation and hydrogen isn’t the answer to all our problems. We need to boost both electrification and gas energy sources while building the necessary infrastructure across the UK to ensure a resilient energy system for both our citizens and businesses.

The Opportunity is Vast

We have all the ingredients in place to lead the world in hydrogen: a leading regulatory regime, the North Sea on our doorstep, perfect offshore and onshore geology for gas storage, world-leading investor frameworks, and the best and brightest talent with our universities and tech start-ups. And we already have much of the infrastructure in place that we need for hydrogen – enabling us to repurpose and reduce the burden on the taxpayer. The opportunity is vast, now is the time to seize it.

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