These consultations related to the UK Hydrogen Strategy which sets out the government's approach to developing a thriving low carbon hydrogen sector in the UK to meet the ambition for 5GW of low carbon hydrogen production capacity by 2030.
- Consultation on a Hydrogen Business Model to stimulate private investment in new low carbon hydrogen projects.
- Consultation on the design of the £240 million Net Zero Hydrogen Fund (NZHF) confirmed out to 2025 to support new hydrogen production projects.
- Consultation on a UK Low Carbon Hydrogen Standard that will define what is meant by low carbon hydrogen, allowing us to incentivise and support low carbon hydrogen for supply across the energy system.
These consultations closed on 25 October 2021.
Given the significant uncertainty around cost implications and technical feasibility of lowcarbon hydrogen production, CIBSE currently have reservations about the suitability of hydrogen for building uses, compared to other applications which have few or no other options for decarbonisation. However, as the CCC scenarios expect a significant contribution from hydrogen to the wider economy, both in annual energy terms and for system balancing purposes, whether and how low-carbon hydrogen can be produced clearly needs attention.
The creation of a standard would be useful to determine the carbon impact of hydrogen production options, drive innovation by setting ambitious requirements, identify the best routes to produce it, and allow a robust and fair comparison with other options. We therefore welcome this consultation. It must however be noted that a standard on its own is very unlikely to be sufficient to inform strategic decision making. As many points in the consultation make clear, for example about renewable energy capacity required, the decisions on hydrogen production have multiple implications, and must be considered as part of the whole system to avoid un-intended consequences, now and in the long-term. What appears a better route now could lock us into higher-carbon solutions, and waste time and resources. Some routes are inherently riskier than others, or provide fewer additional functions than “simply” a low-carbon energy vector (as valuable as that is).
Decisions on hydrogen should not include a comparison only between different hydrogen production routes, but also with other options including:
- Overall system use of resources, whether they are low-carbon or not: we must aim for efficient use of energy resources;
- Supply side options, including other options for system balancing e.g. storage, international grid connections;
- Demand side options, including maximising the opportunities from demand reduction and management at the user level. As pointed out in many consultations in the past few years, we stress that in the building sector the potential for demand reduction and management is significant, and not appropriately addressed in existing and proposed policy.
We agree with the proposed metric i.e. gCO2e/MJ LHV (Lower Heating Value). This makes sense from an engineering perspective when comparing hydrogen with other energy vectors, and has the other significant advantage of aligning with existing standards elsewhere in the world. However, other impacts should also be reported on and in some cases be subject to requirements, for example air quality emissions.
We understand and agree with the need for the standard to provide an assessment of carbon impact at point of production, to allow comparison between different production routes. However:
- these production routes should not only be UK-focused. The standard must be technology agnostic and offer comparison with other routes, for example hydrogen that would be produced by solar-rich countries and imported to the UK (this option is nonnegligible since 13% of H2 in 2050 would be imported, in the government strategy). In addition to providing the UK with a wider assessment of its options, it would also open the standard to uses worldwide, showcasing UK Net Zero expertise.
- the standard must cover carbon impact up to point of use. This could be reported separately from the impact up to production, but it is essential in order for consumers not only to assess hydrogen from different sources, but also to assess hydrogen in their application against other options: many end uses (e.g. the building sector) will have other options and hydrogen may not be the most appropriate for them, or for the overall system when considering other uses which should be prioritised as they have few or no other decarbonisation options. In addition to carbon impact, the standard should then also provide data on impacts using relevant metrics to that use; for example, in the building sector, carbon impacts should be reported “up to the building meter”, and in addition, as government is currently minded to use primary energy as a metric in several buildingrelated regulations, then the standard should allow reporting of the impact of hydrogen not only on a carbon basis, but also primary energy.
We agree that the standard should also set a threshold for "low carbon" hydrogen. This should be as ambitious as possible, to set a stable long-term direction and really drive investment and innovation. We think the current proposed threshold (15-20gCO2/MJ H2 LHV) is not ambitious enough, and poses significant risks:
- Higher carbon emissions: not setting a Net Zero compliant direction: our assessment is that it would, by far, exceed what is currently factored into the CCC’s Balanced Pathway 2050 scenario;
- A less attractive option to end users, and delays in the low carbon heat transition: for users who have the choice, hydrogen which is not really low carbon may not be an attractive option, and therefore the standard would not meet the intent of creating a demand for hydrogen. In the building sector for example, users may then decide to use electric heating (with or without heat pump) as a lower carbon option, but that transition to low-carbon heating would have been delayed on the expectation of future low-carbon hydrogen, resulting in higher emissions in that period.
The proposed threshold appears to have been designed so that all but the highestcarbon routes would be able to meet it, rather than being designed to drive what hydrogen production needs to achieve to contribute to a net zero carbon UK. Our recommendation is that the carbon threshold should be set to be compliant with CCC net zero scenarios (e.g. Balanced Pathway); we expect this would mean significantly lower levels e.g. at least 3-4 times lower than the figure currently proposed.
We appreciate that a Net Zero compliant threshold may not be entirely feasible now; however, early stage flexibility to support R&D should not hide factors which will have to be addressed, such as the increase in renewable capacity required for low-carbon hydrogen from electrolysis. Our recommendation would then be for the following approach to thresholds:
-- An intermediate threshold which is tightened over time towards the 2050-Net Zero compatible threshold. There would need to be a regular review mechanism to ensure this is set at the right level, to be ambitious enough and really drive innovation.
-- A long-term Net Zero compliant threshold, in place from the offset, which would drive innovation by providing a stable and ambitious goal and which could be used in 2 ways:
- Production routes that would achieve it, or be the closest to it, could be given preferential treatment. For example, this would apply to electrolysis plant with truly additional renewable generation capacity.
- Production routes which, using a carbon factor for 2050 grid electricity (e.g. 2gCO2/kWh, in the CCC Balanced Pathway scenario) would NOT meet the long-term threshold, would not meet the standard or at least would be given lowerpriority for funding, since they would represent a risk of carbon lock-in unless significant improvements to their performance happened in the future.
Any reliance on renewable electricity being used by hydrogen production routes to calculate their carbon impact should be supported by clear evidence of additionality e.g. their own newly installed capacity, or PPAs. We appreciate this would result in capital investments; however, it is the reality of “green” hydrogen production: additional renewable capacity will be required; for example, the CCC 2050 Balanced Pathway scenario estimates that an additional 120TWh of renewable electricity production will be required for the purpose of hydrogen production (CCC 6th Carbon Budget, 2020). These costs must be understood and reflected in business models and the whole system appraisal of our options to achieve Net Zero carbon.
Finally, there is no mention in the consultation of monitoring and checking actual performance of hydrogen production once it is operational. It is not clear whether or at what point compliance with the standard, and associated funding, would be subject to actual monitored performance data. We understand the value of a standard which can be used at the design and investment stages, particularly in these early years of R&D. However, ultimately, full compliance with the standard, and associated funding, must be subject to verification of actual performance. This applies to all routes, but is particularly important for routes with a high level of uncertainty and risk, in particular the fossil fuel based routes which rely on effective storage and low leakage (of methane, carbon dioxide and other GHG gases) to deliver carbon benefits. We strongly recommend the introduction of proposals for monitoring and disclosure, and ultimately for compliance to be linked to actual performance.