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    Hydrogen, heat, and the decarbonisation of energy systems


    This new working paper examines the possible roles that hydrogen could play in energy system decarbonisation, with a specific focus on its potential role in decarbonising heat in the built environment.

    Tackling climate change will require deep and rapid reductions in global greenhouse gas emissions, making decarbonisation of energy systems and the provision of heating essential. There is growing global interest in how hydrogen might be able to help with this, reflecting its ability to be stored, transported, and combined with other elements, which could enable it to play a role in a wide range of applications across many sectors.

    Assessing hydrogen’s potential role within the heat sector, means addressing two key questions. Firstly, how much clean hydrogen can be produced, at what cost, and by when; and then, where across the energy systems is it most sensible to use that hydrogen. The answer to the second question is more straightforward: there seems to be some consensus that hydrogen should be used in those areas that are proving difficult to decarbonise and where alternatives are not available, this includes iron and steel production, the chemicals sector, and long-haul transport like shipping and aviation. The answer to the first question is more complicated because the development of the hydrogen supply chain, including its clean production is rooted in considerable uncertainties, risks, and assumptions. This makes assumptions about its use within energy systems and the heat sector complicated.

    Looking at current global hydrogen demand (around 70 Mt/yr), production is almost entirely from fossil fuels (‘grey hydrogen’) resulting in around 830 million tonnes of CO2 emissions per year. The carbon content of this hydrogen (10-19 kgCO2eq/kgH2) could be reduced through the application of CCUS/CCS to around 1-4 kgCO2eq/kgH2 – this lower carbon hydrogen is often called blue hydrogen. Hydrogen can also be produced cleanly, through the electrolysis of water using electricity from renewable energy resources, often referred to as green hydrogen, with emissions close to zero.

    Producing cost-competitive low-carbon hydrogen at scale is recognised as one of the greatest barriers to developing its role within energy systems. For blue hydrogen, the main issue is that CCUS/CCS has suffered from high cost and project cancellations, with low levels of deployment globally, and it is therefore not yet clear how much blue hydrogen will come to market. In addition, a substantial scaling up of blue hydrogen also risks ongoing path-dependency and lock-in to natural gas infrastructure, making it hard to reduce emissions in the future and hindering wider energy system decarbonisation. For green hydrogen, production is much more costly and there are significant efficiency losses within the conversion process.

    Current rates of deployment for both blue and green hydrogen are low, although this is expected to change, as an increasing number of countries develop policies and roadmaps to support hydrogen. Recent examples of the growing policy interest include the new EU hydrogen strategy, as well as significant new strategies and funding within Germany and France. This support is needed if the whole hydrogen supply chain is to scale up and become resilient, through the simultaneous creation of both supply and demand, so that a virtuous circle emerges across production, infrastructure for supply, end-use demand, and the creation of markets.

    Scenarios on possible levels of future hydrogen demand suggest that by 2050, global demand could be in the region of 545 MtH2/yr, providing around 18% of the world’s final energy demand. At the European level, it is suggested that hydrogen could provide 24% of final energy demand by 2050, requiring around 57 MtH2/yr. The expectation is that blue hydrogen will be needed to help establish resilient supply chains in the short to medium term, whilst waiting for improvements in the cost, efficiency, and scale of green hydrogen production.

    The attributes and versatility of hydrogen mean it could play multiple roles in decarbonising energy systems, but the case for its use within the heat sector are less clear. There are currently two main options, blending it into natural gas networks, with a practical limit of possibly up to 20% hydrogen in the mix, or using 100% hydrogen. Blending hydrogen at 20% by volume gives a potential emissions savings of around 4 to 6% relative to natural gas, if using blue hydrogen. If green hydrogen were used emissions would be slightly lower, but the costs and potential value of this clean resource mean it may be better directed to other end uses. For 100% hydrogen pathways using blue hydrogen, which seems the likeliest, emissions reductions relative to natural gas would be around 60-85% because of the upstream emissions from the natural gas supply chain and the efficiency of CCUS. However this pathway would require significant updates to infrastructure, taking in every building on a 100% network, which in addition to cost concerns , could also mean that the pace of change to enable to scale up will be incompatible with meeting climate change targets.

    Hydrogen could play an important role in helping to decarbonise many areas of the energy system, and possibly some niche roles within the heating sector, but as a strategy for the rapid and deep decarbonisation of heating, the use of hydrogen is highly debateable and not compelling. Partly this is because hydrogen is just one of many possible pathways to decarbonise heat and of the options available it is one of the least developed. Waiting for hydrogen to develop as a practical choice risks delaying decisions, or stopping progress entirely on alternative heat pathways, which can be deployed now. Given the need for rapid emission reductions and the lack of progress in decarbonising heat to date, this would not be a good outcome in achieving net zero goals.

    To summarise, the literature makes clear that:
    • hydrogen can be put to better use in other areas of the energy system, where decarbonisation is proving more difficult and alternative options are not available or are more limited.
    • both of the main options for using hydrogen will require blue hydrogen, which risks locking-in future emissions as any new capacity will remain on the system for decades and create ongoing path dependency around fossil fuels.
    • blending is not a good use of hydrogen and will lead to very low reductions in carbon emissions.
    • 100% hydrogen comes with big uncertainties over the costs and timescale for its deployment and would only result in the partial decarbonisation of heating.

    Hydrogen and Heat

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