On Tuesday of last week, UK prime minister Boris Johnson announced his long anticipated 10-point plan, geared toward investing 12 billion GBP into Britain’s green economy by 2030. The plan placed heavy emphasis on hydrogen, setting a production target of 5GW of low carbon grade hydrogen for use in industry, transport, power and homes, and even the anticipated development of a town heated entirely by hydrogen before the end of the decade.
Using hydrogen as a fuel is an elegant yet arduous process. In a hydrogen fuel cell, pure hydrogen is passed through an anode where a catalyst breaks up the hydrogen molecule into protons and electrons. These electrons are then forced through a circuit, generating clean electricity and heat, producing water as the only by-product, a much cleaner process than the traditional internal combustion engine or gas boiler. However, sourcing pure hydrogen for the fuel cell is currently a polluting process. Despite being the most abundant element in the universe, pure hydrogen on Earth is relatively scarce and must be obtained by extraction from hydrocarbons at very high temperatures, a process known colloquially as ‘steam reforming’. Today, 95% of hydrogen is made from the steam reforming of natural gas, an unsustainable process owing to the high heats, emissions and increasing scarcity of the fossil fuels required.
The UK Prime Minister’s plan however also places a strong emphasis on research and innovation in order to facilitate the plan’s implementation. Alternative production processes for pure hydrogen are bifurcated into ‘green’ and ‘blue’ hydrogen. The green process is the most sustainable, using renewable electricity sources such as solar to electrolyse water, though critics point out the inefficacy of using previously clean electricity to produce another green fuel. The blue process still relies on the method of steam reforming natural gas but uses CCUS (carbon capture utilisation and storage) technology to contain the carbon emissions produced. The blue process is already favoured by the UK’s big energy companies as it allows them to maintain their current natural gas infrastructure and does not mandate the decommissioning of natural gas fields, as these can be used to store produced carbon. For now, it is unclear which method the UK government will invest in: the 500 million GBP set aside for hydrogen is split evenly between trialling homes using hydrogen for heating and cooking and new hydrogen production facilities, but the government has yet to provide further information. However, Eugene McKenna, green hydrogen managing director of FTSE 100 chemicals giant Johnson Matthey, points out: ‘Thanks to decommissioning of the North Sea, we have the best geology in the world for carbon capture and storage.’ Evidence points strongly towards the UK being well positioned to be a world leader in blue hydrogen.
Mr Johnson’s plan, however, was not received without criticism. Richard Lowes of the UK Energy Research Centre (UKERC) has criticised the recent rush to prioritise hydrogen by governments worldwide. He considers that ‘we are totally carried away; the trouble is we just don’t know at the moment because it’s never been done and there all of these uncertainties’. He posits that hydrogen will have a more minor role to play in decarbonisation, such as in a fuel cell, storing green energy as an alternative to batteries. One area where hydrogen is sure to play an integral role is in industry – the gas has already been used in industrial processes for centuries, so it is imperative for governments to provide price incentives for industries to use cleaner sources of hydrogen. This includes processes where it could replace carbon as an industrial reducing agent in the steel industry which is currently responsible for a stunning 10% of global emissions.
Another main criticism immediately following the announcement of Mr Johnson’s plan is that it does not go far enough. Commentators have contrasted the 500 million GBP set aside specifically for hydrogen in the UK with the 7 billion EUR, 8 billion EUR and an estimated 40 billion GBP from the French, German and South Korean governments respectively. Despite this, it is important to note here that the last of the prime minister’s ten points is to make London the foremost green finance centre of the world and it is anticipated that the private sector will be the largest financier of the UK’s ‘green industrial revolution’. Already Morningstar estimates that 1 trillion GBP is available in London-based ESG exchange-traded funds, not to mention ventures into building green infrastructure by Britain’s private energy firms. That said, it is vital that in this new wave of green funding the UK develops the means of producing green energy domestically, because previous energy subsidies have resulted in a large outflow of funds abroad. Marco Alverà, chief executive officer of Italian energy infrastructure business Snam estimates that: ‘the 1 trillion GBP consumers paid out of their energy bills over 15 years in subsidies went mainly to Chinese manufacturers of solar and wind equipment because the capacity wasn’t in Europe’.
Overall, the final role of hydrogen in the shift to green energy remains uncertain, however it is clear the UK government has great faith in the fuel and has deeply evaluated its potential as a green alternative. It does remain unclear what the UK government’s exact plan is for funding future research. What is certain is that the UK is still a global leader in developing scientific technologies, as McKenna points out: ‘We do the science for this in the UK and can export high-value technology worldwide. This is not Californian or Chinese technology; it is British technology that’s wanted worldwide.’ The hope is that the government can capitalise on it.
By Stan Clark
Sector Head: Edouard Nelson