Can hydrogen power your net zero pathway?

Kelly Jiang, Technology Strategy and Innovation Analyst for Centrica Business Solutions, explores the potential of hydrogen to deliver on the global decarbonisation challenge and help organisations along the energy pathway to their net-zero goals.

The future energy system will be very different. It will be almost fully decarbonised, digitalised, decentralised and distributed. Doing more of the same is no longer enough to access the opportunities this future brings. Innovative new solutions are required to tackle the climate crisis, control rising costs and improve energy security. Can hydrogen could provide an answer?

Hydrogen produces no carbon emissions at the point of use and has the potential to be produced with low or zero emissions. As such it is seen as a versatile, long-term alternative to burning fossil fuels.

There are 3 main methods of hydrogen generation.

  • Grey hydrogen is created by steam methane reforming (SMR); that is, combining steam (H2O) and methane (CH4) at a high temperature to create hydrogen (H2) gas. Carbon dioxide (CO2) is released as a waste product. This is the process by which most hydrogen is produced today.
  • Green hydrogen is produced by electrolysis (electric splitting) of water. An electric current is run through water, separating it into hydrogen (H2) and oxygen (O2) gas. If the energy used to power this process is renewable, then the green hydrogen is emission-free.
  • Blue hydrogen is created by steam methane reforming plus carbon capture. Carbon capture has the potential to reduce emissions from hydrogen production by 60-85% , but it does not yet exist commercially.

Today, approximately 70m tonnes of hydrogen is produced globally across industry each year, used mainly in oil refining and the production of ammonia for fertilisers. But around 97% is created from fossil-fuels using the SMR process.

Business benefits

Blue and green hydrogen can play a pivotal role in accelerating decarbonisation through to 2030 and beyond. Recent analysis from Bloomberg NEF concluded that the large-scale, global deployment of renewable hydrogen across the energy, transport and industrial sectors could reduce their annual emissions by up to 34% by 2050. 

Hydrogen production via electrolysis is a promising option for increasing the utilisation of electricity from renewable resources in a world where we may often have surplus production of electricity from wind and solar.

Hydrogen is an energy carrier that can complement electrification by providing the flexibility required for power system balancing. This can reduce the need for peaking capacity and provide greater resilience.

In its 2020 Future Energy Scenarios report, National Grid says that hydrogen’s role in providing zero carbon flexibility and peaking plant will be very important in all scenarios. Even its most cautious net zero scenario will require at least 15TWh of hydrogen storage by 2050.

Commercial uses for hydrogen

Huge progress has been made in decarbonising power systems, but transport and heat have been left behind. Industrial heat emissions are particularly problematic. Hydrogen could make a contribution to sustainable heat, transport and power, by:

  • Replacing natural gas for industrial processes that are difficult to electrify due to high-grade heat requirements – estimated to account for around 10% of global CO2 emissions.
  • Replacing natural gas for heating, particularly for homes or businesses that are unsuitable for heat pumps, or without significant insulation, potentially in combination with heat pumps.
  • Providing energy flexibility through use as longer term power storage – by converting power to hydrogen during excess supply and then converting back when demand increases or supply drops.
  • Powering heavy duty transport, such as HGVs, shipping and aviation, where the long-range travel plus weight and volume considerations require a high energy density fuel.

Government policy

Scaling-up and commercialising hydrogen production and deployment requires a strategic approach on a global level. It is critical that policy makers collaborate to prepare infrastructure and create the right market conditions to capitalise on the hydrogen opportunity and bring down costs.

The UK government is expected to release a 2050 Heat Roadmap this year, which should provide some much-needed clarity on government direction. The European Union Commission has signalled strong policy support for the sector, with the formation in July 2020 of its new hydrogen strategy and European Clean Hydrogen Alliance. One enabling step required by all countries will be the conversion of iron gas distribution pipelines to plastic, which will assist in preparing the hydrogen delivery infrastructure of the future. 

Commercial potential

In Centrica’s view, hydrogen has significant potential to progress the energy transition, although practical obstacles mean that it is unlikely to reach large scale commercial usage in the near-term. Producing carbon-free hydrogen is currently expensive; today’s available hydrogen is produced in a way that is carbon intensive; existing infrastructure requires upgrading or replacement, and there are additional safety issues compared to using methane or shifting to electrification.

We believe that implementing a rolling decarbonisation plan that utilises existing technologies, such as solar and heat pumps, but prepares for developing technologies such as hydrogen, is the best bet to transitioning to a net zero future.

Today’s opportunity for business

While the wide-scale deployment of hydrogen could take time, there are opportunities to capitalise on this versatile technology today and help to accelerate commercialisation..

Hydrogen blending

Hydrogen can be deployed speedily and cost effectively by blending it with natural gas. This could provide an easy win to decarbonise gas-powered end uses and serve as a market entry point for green or blue hydrogen.

A mix of up to 20% hydrogen can be transported in the existing natural gas pipelines, without needing substantial upgrades. Technical feasibility has been proven and pilot projects announced in the UK and Germany, such as the ‘HyDeploy2’ project.

Hydrogen Combined Heat and Power (CHP)

Blending hydrogen with natural gas opens opportunities to use hydrogen Combined heat and Power (CHP). This technology is ready now and provides an opportunity to decarbonise CHP and use this proven technology to enable energy system flexibility.

Commercial, industrial equipment and generators that currently run on natural gas could be modified to be able to burn hydrogen, which would result in no carbon emissions at the point of use. This could provide a more commercially attractive alternative to the direct electrification of heat for high temperature heat users.

Industrial hydrogen clusters

There is also near-term potential for hydrogen clusters to develop around industrial sites, where there is demand for hard to decarbonise processes. This could work by organisations sharing infrastructure to deliver benefits, as wider infrastructure is developed nationally.

5-10 year outlook

For many end-uses that use fossil fuels today, particularly heating and industry, replacing this source with clean hydrogen is seen as the simplest emissions reduction pathway in the long term. Below is our best-view of a possible roadmap of hydrogen developments of the next 10 years.

In the next 5 years

  • Continued use in industrial processes of grey (carbon intensive) hydrogen
  • Green hydrogen likely to be limited to niche use cases
  • Exploratory low carbon hydrogen pilots and research projects, backed by governments
  • Strategic planning underway – e.g. formation of the European Commission’s new hydrogen strategy
  • Conversion of iron gas distribution pipelines to plastic

Between 5 -10 years

  • Distributed green hydrogen becomes commercially available, but still high cost
  • Limited adoption of industrial equipment and residential appliances that can burn hydrogen
  • Low carbon hydrogen limited to niche projects focussed on highly energy intensive processes
  • From 2025 to 2030, the European Commission aiming for at least 40GW of renewable hydrogen electrolysers

10 + years’ out

  • Blue and green hydrogen could play a major role in the low carbon economy after 2030.
  • Most UK gas distribution pipelines converted to plastic
  • Use of clean hydrogen at scale, dependent on level of regulatory and government support
  • If governments support the technology and develop hydrogen distribution sector, then:
  • Wide use of hydrogen boilers
  • Hydrogen transmission pipelines could supply homes and businesses
  • Blue hydrogen could become cost competitive to replace natural gas in power generation
  1. Wide use of hydrogen boilers
  2. Hydrogen transmission pipelines could supply homes and businesses
  3. Blue hydrogen could become cost competitive to replace natural gas in power generation

Planning for hydrogen

Although commercialisation is some way off and highly dependent on government support, all businesses should flexibly factor hydrogen into their energy pathway beyond 2030, which means doing some planning now. This means considering how your existing systems, such as CHP engines, might be adapted to run on hydrogen.

Meanwhile, energy intensive industries should work with their energy partner to examine how they can use hydrogen to decarbonise heat in the near term. These industries must find medium-to long-term alternatives to fossil fuel heat, which makes up two-thirds of industrial energy demand and almost one-fifth of global energy consumption.

Hydrogen can resolve the hard to decarbonise challenges and plug the gaps that other technologies can’t yet reach; such as fuelling heavy transport; heating energy intensive industrial processes and providing long-term storage.

It offers enormous potential, but it’s also the technology that is most challenging to roll-out at scale, due to complex infrastructure requirements and expense.  There is much excitement about the decarbonising role of hydrogen, but its future will be highly dependent on regulatory support.

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