Hydrogen hopes dashed by lack of clarity
By World Infrastructure Journal-
While the scale of the government’s plan for an economy based around hydrogen fuel is promising, there doesn’t seem to be a clear idea of how to finance it or what kind of hydrogen they want to use.
A hydrogen-based economy could be the way of the future. Putting forward a formal commitment to steadily expanding hydrogen’s national utility is an excellent way for a government to position itself to become world leaders in a rapidly expanding industry. As such, the long-awaited announcement of the UK government’s plans for hydrogen was an exciting statement of intent.
Aiming to provide enough energy by 2030 to replace fossil fuels for heating and cooking in about three million households in the UK, the plan has the potential to overhaul the country’s heavy industry and transport. It sets the target of creating 9,000 “high-quality jobs” by 2030, and 100,000 new jobs by 2050. By this point, the plan's authors estimate the UK hydrogen economy could be worth £13 billion. However, while this plan for hydrogen – which aims to use hydrogen to cover up to 35 per cent of the UK’s energy consumption by 2050 – has the potential to serve as the foundation for an economic and environmental ‘levelling up,’ there doesn’t seem to be any clarity on how it will be funded.
Currently, the government hopes to attract roughly £4 billion in investment and has promised that, after a series of industry consultations, that a subsidy system will be established to support large hydrogen projects. There is, however, no signal on what that subsidy, or the process to establish it, might look like. Even more concerning, it is not clear whether the cost of the project will be shouldered by the Treasury or households – especially given the government’s recent unprecedented request for pensions to invest more heavily in infrastructure projects.
The government maintains that these questions will be answered after a consultation period, which is important given that, in the words of Matthew Fell, Chief UK Policy Director at the CBI, “firms will now be looking for the government to provide detailed policies and standards for hydrogen production and application. ” What is even more important, however, is that the UK clarify the balance between “green hydrogen” and “blue hydrogen. ” Despite the explicit recommendations of the Committee on Climate Change (CCC), the hydrogen economy plan includes no clear guidelines for the development of either.
The reason this is so important is because “green hydrogen” and “blue hydrogen” are vastly different in their impact on the environment. While “green hydrogen” is produced through extracting the hydrogen molecules from water (leaving only oxygen behind), “blue hydrogen” is extracted from fossil fuels. A recent study from academics at Stanford University and Cornell University cautioned that the extraction methods that create “blue hydrogen” could be up to 20 per cent more damaging to the environment than simply burning fossil fuels themselves.
“Blue hydrogen” does have potential. The CCC has recommended the use of a “blue hydrogen bridge” that could help to displace the use of fossil fuels in heavy industry and transport sooner than a plan that exclusively makes use of “green hydrogen. ” However, if that bridge is to effectively work, it will need to be clear to all parties involved how that industry will be scaled back and incorporated into the “green hydrogen” sector eventually. After all, the monumental shift towards a hydrogen economy will require previously unseen co-operation between the private and public sector – and that requires everyone to be on the same page.
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