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The Case for Green Hydrogen

Hydrogen

Hydrogen is the most abundant element in the universe and the simplest of all atoms, but it is only present as a gas in the Earth’s atmosphere in small amounts. It can, however, be manually produced by many processes. It is then referred to by different colours (green, yellow, brown, grey, blue and turquoise) and stored as a gas in high-pressure tanks. At a later stage, the hydrogen can be converted back into electricity in ‘fuel cells’ or simply burned for heat. Reacting the hydrogen with oxygen forms water, a clean by-product. 

Most of today’s hydrogen production occurs by heating steam and methane. This process consumes fossil fuels and produces carbon emissions (so-called grey hydrogen). Green hydrogen refers to hydrogen created via a zero-carbon emission process that uses electricity (where possible from renewable sources) to split water into its component parts (H2 and O2) using electrolysis. By using electricity from wind and solar farms, electrolysers (where the reaction takes place) allow for the storage of surplus energy in the form of hydrogen gas.

Hydrogen gas is an industrial input with many uses, such as 

  • A replacement for natural gas, comprised principally of methane in industrial uses 
  • A replacement for petrol and diesel in transport that uses fuel cells 
  • Heating homes and businesses—with modification to gas networks
  • As a fuel, perhaps a carbon-neutral substitute for shipping and aviation fuel—after conversion to ammonia 
  • Fertiliser—after conversion to ammonia
  • In the creation of methanol, a feedstock in the plastics industry
  • Being burned and the subsequent heat generating electricity

Some of the uses above will only become feasible in the market if there is a large, cheap and reliable source of low-carbon hydrogen that benefits from economies of scale and the infrastructure required to distribute this alternative fuel. Like solar and wind power generation before it, hydrogen is a low-carbon technology and could revolutionise the economy once critical mass is achieved. 

The main reasons the UK should invest in low-carbon hydrogen fall into three categories; environmental, economic and strategic. 

Environmental

The obvious reason to invest in green hydrogen is as a low-carbon replacement fuel. It can also be used to store energy when electricity is plentiful. This energy can then be released again when electricity is scarce. For example, electricity hungry data centres that need constant power, can use hydrogen fuel cells to augment their energy supply so that more of their power needs are removed from the grid when the sun is shining and the wind is blowing and therefore renewable sources are providing the power.

At an economy-wide level, hydrogen has the potential to remove fossil fuel usage from significant sectors where electrification is unfeasible. 

Economic

It could serve the UK well to support the hydrogen industry and thereby gain a first-mover advantage in this industry of the future, potentially securing an export market share. 

The UK is already a world leader in offshore wind energy, which puts it in a good position to be a world leader in the production of green hydrogen within this decade. To achieve this, it is essential that pilot projects are implemented in the UK as soon as possible to: gain practical experience; capitalise on efficiencies through learning curves; and scale effects on production equipment, such as electrolysers. 

Pilot projects, and the resulting collaboration between a network of hydrogen stakeholders (including hydrogen producers, hydrogen off-takers, local authorities and academic institutions), will lead to new hydrogen innovation clusters. These clusters will catalyse an important positive feedback cycle and lead to new skills and jobs. This cycle will ensure continuous demand growth, which will justify the implementation of the required hydrogen infrastructure. This infrastructure could include pipelines and export terminals, which will take many years to develop but could be complete by 2030 if the investment is made now. 

Levelling up

It’s important to note that unlike battery gigafactories and offshore windfarms, hydrogen electrolysers can be relatively small facilities, distributed across the country requiring limited infrastructure support. This makes them a great option for policy makers trying to level up areas, securing and encouraging the high tech jobs of the future.

Strategic

As the war in Ukraine has demonstrated, the UK is dangerously dependent on the international markets for natural gas. It is similarly tied to the markets for other fossil fuels. Decarbonisation presents an opportunity to decouple our supply of energy from these markets and therefore, gain strategic autonomy. 

Final Thought

For these reasons, it is both prudent and advantageous for the UK to develop hydrogen as an alternative fuel and energy source. 

The UK has been an innovator in how they we fund the decarbonisation of the economy, in particular the UK Government’s “Contract for Difference” scheme has secured a record amount of renewable energy. Perhaps it is time for a similar scheme to be applied to green hydrogen.

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