Hydrogen blending is a ‘costly distraction’

Hydrogen blending is a “costly distraction” that could derail the decarbonisation of heating by “greenwashing” fossil fuels and delaying strategic decisions on the future of the gas grid.

E3G said the blending of hydrogen into Britain’s gas networks risks “locking in” the inefficient use of hydrogen for domestic heating when it would be much better utilised for industrial processes, aviation and long-duration energy storage in the power sector.

The government is due to make a decision later this year on whether to allow hydrogen to be mixed into Britain’s gas networks at rates of up to 20% by volume. The current limit is just 0.1%.

Given its lower calorific value per unit of volume, E3G said blending hydrogen at a 20% rate would reduce greenhouse gas emissions by a maximum of 7%, representing the amount of natural gas it could replace. However, this could only be achieved if it was all green hydrogen produced by electrolysing water with renewable power.

The UK’s focus on producing blue hydrogen by reforming methane and capturing the carbon dioxide emissions means the actual reduction would likely be a lot less because of methane leakage.

E3G said hydrogen blending could also substantially increase household energy bills. It said estimates vary significantly, but if the hydrogen cost twice as much per unit of energy as the natural gas it replaced, then household gas bills would also rise by 7%. It cited several studies which suggested gas bills could actually rise by up to a fifth.

The environmental thinktank said the changing calorific value of the blended gas, which would vary according to hydrogen production levels and industrial demand, would additionally require new metering practices and complex billing arrangements.

E3G said there would also be the “hidden cost” of delays to the decarbonisation of heating. It said heating homes with boilers fuelled by green hydrogen would require around six times as much renewable energy as heat pumps. This “enormous demand” would undermine the ability to provide a secure supply of renewable energy to other sectors.

The thinktank said the government is considering blending as a “short-term, transitional way to shore up demand” as hydrogen production develops, with gas networks acting as a “sink” for excess supply.

“This is a different policy decision to allowing a complete gas network conversion to carry pure hydrogen; and allowing one does not mean that the other will materialise,” it explained.

“However, this conflation can lead to people believing that widespread use of hydrogen for heating is around the corner, in turn delaying consumer decisions on readily available clean heat alternatives.”

The government is due make a decision on the long-term role for hydrogen in heating in 2026 following trials of a hydrogen neighbourhood, village and then town. In the meantime, E3G said gas networks and boiler manufacturers could advertise hydrogen blending as the first step towards 100% hydrogen heating, creating “confusion among installers and consumers.”

It noted that one boiler manufacturer has told business customers: “When the government begins to increase the amount of ‘green gases’ into the UK gas grid, your customers can be confident their new [hydrogen-ready] gas boiler will run for its lifetime without any wholesale changes to switch to an electric boiler for example.”

“Blending could create greenwash as the public are told that ‘gas has gone green’, when in fact hydrogen-ready boilers will continue to burn fossil fuels for decades to come,” E3G added.

It said this type of messaging could lead customers to waste money on hydrogen-ready boilers, instead of switching to a heat pump or heat network, when there is no guarantee they will be able to continue running them over the long term.

Likewise, E3G said hydrogen lending will encourage appliance manufacturers to invest in making their supply chains hydrogen ready, meaning “they will have an interest in ensuring pay-back on these investments.”

The thinktank said hydrogen blending is not a “no regret” means to building a market hydrogen market. Policies to stimulate early demand should instead incentivise its prioritisation for strategic uses, starting with the replacement of high-carbon grey hydrogen, produced by reforming methane without carbon capture, in industrial processes.

E3G said the government should encourage the development of “hydrogen clusters” and incentivise the co-location of production and demand, adding: “It is key that blending, if permitted, is limited geographically”.

Blended hydrogen is currently excluded from the government’s subsidies for producers. E3G said: “It is critical that this remains the case to encourage strategic co-location and align blending with government’s vision of it being an off-taker of last resort.”

It said the government should additionally provide a long-term road map on the future shape of the UK’s hydrogen economy to avoid “stranded assets in sectors where hydrogen does not end up being used for decarbonisation.”

Lastly, E3G said the government should find a “fair funding solution” for the hydrogen economy as putting the costs on energy bills is a “regressive approach”.

Earlier this week, a backbench MP told the House of Commons that ministers are drawing up a list of alternative funding options to the controversial hydrogen levy which the government had previously proposed.

Energy secretary Grant Shapps told the Environmental Audit Committee in March there is “a very strong case” for blending hydrogen with natural gas.