Back in the summer, there were signs that the consensus around Net Zero policy was starting to crack. The Prime Minister, Rishi Sunak then made his speech that watered down some Net Zero commitments and promised “a more pragmatic, proportionate and realistic approach that eases the burdens on families.” However, in the run-up to Christmas, the Department for Energy Security and Net Zero (DESNZ) made several worrying announcements about hydrogen policy.
Unfortunately, the announcements mark the end of the pragmatic approach to the Net Zero insanity and demonstrate that the Government has no idea about economics, thermodynamics or energy and has gone completely insane. Of course, consumers will pick up the tab.
On December 14th, the Government used the distraction of the COP28 meeting to announce updates to its hydrogen policy. There was a new hydrogen production delivery roadmap, an announcement of the results of a consultation on blending hydrogen into the gas distribution network and a strategic policy decision on the same topic.
The Government has a vision of up to 10 GW of hydrogen production capacity to be delivered by 2030, subject to “affordability and value for money”. This capacity would comprise 6 GW of ‘green hydrogen’ produced from electrolysis powered by renewables and 4 GW of ‘blue hydrogen’ produced from natural gas with the emissions captured (CCUS). The trouble is, its roadmap to 2030 only includes 4 GW of capacity and some of that does not deliver until 2031, so its own roadmap will not achieve its vision.
The Government expects its 10 GW vision to produce 60 TWh per year of hydrogen with 33 TWh of the total being blue hydrogen and the balance being green hydrogen. It is fortunate that its route map does not meet its vision because its estimate of hydrogen demand is only 18-40 TWh – well short of the supply of 60 TWh envisaged.
It recognises this mismatch between supply and demand and suggests that transport and storage infrastructure might be in place by then, so some of the excess could be stored. Although why would we want to store lots of hydrogen if supply is exceeding demand by such a vast amount? In case the storage capacity is insufficient, the Government sees “strategic and economic value in supporting blending” into the natural gas distribution network. It sees the gas network as the “offtaker of last resort”, although it has not yet formally taken the decision to blend hydrogen into our gas.
These announcements will have a significant impact on several areas including electricity demand, the size of our energy bills and the overall efficiency of the energy system.
Given the low efficiency of producing hydrogen using electrolysis, the 26 TWh of ‘green’ hydrogen (powered by renewables) would require about 49 TWh of electricity, which is more than the 45 TWh of electricity produced by the entire offshore wind. Even if it only achieves the 4 GW of total capacity outlined in its roadmap, then it would still need 20 TWh of renewable electricity to make the required amount of green hydrogen. It is clear to see that to make the amount of hydrogen in either the lower roadmap or the higher vision, then we would need more electrical generation capacity.