Weekend press: Hydrogen boiler push to continue despite verdict of UK watchdog

In our latest round-up of national press coverage, the government and sections of UK industry will reportedly continue to back the prospect of using hydrogen for home heating, despite recent warnings against the technology from the National Infrastructure Commission. Elsewhere, concerns are raised about the impact of a lack of port infrastructure on offshore wind, while plans by Labour to incentivise take up of electric vehicles are revealed.

Hydrogen boiler push to continue despite verdict of UK watchdog

The government and sections of UK industry will continue to back the prospect of using hydrogen for home heating, despite a clear verdict against the technology from the UK’s infrastructure watchdog.

The National Infrastructure Commission advised this week, after an exhaustive investigation of the technology, that hydrogen was not suitable for heating homes. The report was unambiguous: “The Commission’s analysis demonstrates that there is no public policy case for hydrogen to be used to heat individual buildings. It should be ruled out as an option to enable an exclusive focus on switching to electrified heat.”

However, the government indicated to the Guardian that it would continue to push hydrogen for home heating, and the body that represents most of the heating industry also vowed to continue to pursue it.

The Department for Energy Security and Net Zero takes the view that the gas network “will always be part of our energy system”, and told the Guardian it would continue to work with the heating industry to explore the potential for hydrogen in home heating.

Mike Foster, the chief executive of the Energy and Utilities Alliance (EUA), which counts boiler manufacturers and gas companies among its members, also sees a future for hydrogen in the home, despite the NIC’s advice, and takes comfort from ministerial assurances. “It’s disappointing to see the NIC wedded to outdated thinking but not a surprise as they have been saying the same thing for years,” he said. “We will need a wide range of technologies to achieve net zero, heat pumps, heat networks and hydrogen boilers. That’s what current government policy states and that’s what we will work towards until told otherwise.”

Foster took aim at heat pumps, despite the NIC’s finding that they were the best and “only viable” option for low-carbon heating for the UK. He said: “It would help sell the case for heat pumps if every member of the NIC gave us their experience of heat pumps in their homes last winter. Real world examples are always a powerful way to influence others to follow suit.”

Hydrogen for home heating also has supporters in key positions in parliament. Sir Robert Goodwill, chair of the environment, food and rural affairs select committee, said: “A typical house gets seven times as much energy through the gas mains as through its electricity connections. If we are going to produce large amounts of renewable energy through offshore wind and also have nuclear energy, we are likely to have surplus off-peak electricity which can be converted to hydrogen. Although that could primarily be used for heavy vehicles where batteries are impractical, there may still be a role for incorporating hydrogen in natural gas supplies, certainly while most houses still have gas boilers.”

The NIC’s verdict on hydrogen came in its regular comprehensive assessment of the UK’s infrastructure. Published every five years, the 222-page document is the result of more than two years of deliberations by engineers and other infrastructure experts.

Companies that are pushing hydrogen include those with a strong vested interest in retaining the UK’s gas network. The Guardian and DeSmog, an investigative journalism operation, recently revealed how the EUA, whose members include some companies that are also expanding into heat pumps but whose core existing business is in gas boilers, has lobbied hard against heat pumps.

Some companies are now selling gas boilers as “hydrogen-ready”, in an effort to make their products appear future-proof or low-carbon. This has also been called into question: earlier this week, the Competition and Markets Authority announced it would investigate whether Worcester Bosch, a major UK boiler brand, was “misleading shoppers with confusing or inaccurate green claims” by advertising “hydrogen-blend ready” home boilers.

Upgrading to hydrogen boilers is not an option that any individual household can take alone, as the NIC points out. The safety issues involved with sending hydrogen through gas pipes mean that upgrading any home would require shutting down the existing gas supply for a whole district at a time to ensure the safety of all boilers, including forced entry to any households that had not agreed to comply.

The UK’s gas infrastructure is also likely to require significant and expensive upgrades to take hydrogen safely.

The Guardian 

Lack of port infrastructure threatens Scotland’s offshore wind boom

At the Ardersier Port in north-east Scotland, a new owner is transforming the 450-acre derelict construction yard where oil and gas platforms were once built into a wind power player of the future.

Texas-based private equity firm Quantum Energy Partners invested in the site after spotting a potentially lucrative opportunity to meet demand for the transportation of wind turbines that will power Britain’s net zero transition.

Investors such as Quantum are betting on the dearth of suitable port infrastructure across the UK, which is slowing the country’s efforts to pivot the economy towards greener sources of power.

“We quickly came to the conclusion that the real acute shortage for the deployment of offshore wind in Europe was port space,” said Lewis Gillies, chief executive of Haventus, the company Quantum set up to develop the port.

The UK plans to bring more offshore wind online as part of its aim to reach net zero emissions by 2050 — five years later than Scotland’s 2045 target.

But success will depend on Britain increasing its offshore wind power nearly fourfold to 50GW by 2030, according to official projections.

In Scotland, ScotWind, the first round of offshore wind leasing for a decade, through which companies including Shell, Scottish Power and SSE have been awarded contracts, aims to provide about 28GW of offshore wind development alone.

With current port capacity, it would take at least 50 years to achieve the 45GW that is already licensed for Scottish waters, Gillies said.

But experts warn the UK is lagging behind other countries in building the necessary infrastructure partly due to the uncertainty for port owners, who risk financial losses if it cannot attract developers.

More investment is needed in areas where vital components need to be manufactured, assembled and stored before being sent out to sea.

Port owners, who need to make long term decisions and secure funding, said a lack of clarity on the government’s objectives beyond 2030 risks deterring investors — projects can take more than a decade from conception to completion.

In April, Quantum announced it would make a £300mn equity investment in the industrial site.

But, according to analysts, the UK is unlikely to close this “investment gap” in time unless port companies gain more certainty on their expected future revenues.

There are “ambitious targets for offshore wind deployment, but we do not have specific policy guidance beyond 2030”, said Ralph Torr, head of floating offshore wind at ORE Catapult, a government-backed research centre. “Time is of the essence,” he added.

Risks to the sector were highlighted last month when offshore wind developers did not bid for any government subsidy contracts in the last auction round for renewable projects. They said the price was too low to offset rising costs.

The port infrastructure challenge is particularly acute for the nascent floating offshore wind industry, which requires larger turbines and larger infrastructure than those fixed to the seabed.

There is “definitely money in the ports industry to invest”, said Richard Ballantyne, chief executive of the British Ports Association. “But we need assurances that these facilities are going to be used. You want 15 years of use out of a facility, at least.”

Tim Pick, the government’s then Offshore Wind Champion, in April pointed to a “shorter-term more commercially focused risk appetite” among the UK’s privatised ports, compared with publicly owned rivals in other European countries, as a barrier to investment.

He said there was “clear appetite” among port companies to support offshore wind, but there was also “what looks like a market failure”, with port companies struggling to raise money for relevant infrastructure amid revenue uncertainty.

Renewable UK, the trade group estimates that about £4bn is needed to upgrade 11 key ports to be ready for floating offshore wind farms by 2030, such as Tyne and Bristol.

The Department for Energy Security and Net Zero said the government was investing £160mn to support port infrastructure. The Scottish government said it was “already collaborating with ports across Scotland to ensure the right support and financial incentives are in place”.

Financial Times

‘Britain will need gas to avoid blackouts for decades’

The man running Britain’s gas network has said the country will need fossil fuels to prevent blackouts for decades to come despite calls for the Government to begin shutting off the pipes.

Jon Butterworth, chief executive of National Gas, said a growing reliance on intermittent power sources such as wind and solar meant Britain would be increasingly reliant on gas to make up for shortfalls when renewable energy sources are not generating power.

Mr Butterworth said: “In 2022, the wind didn’t blow enough or at all for 262 days. And in those 262 days, we would have had rolling blackouts, or a full blackout across the UK if it wasn’t for gas.”

He believes Britain will still need gas to keep the lights on as far out as 2040.

“I actually think we’ll be moving more gas but we’ll be moving gas to power stations to make electricity rather than to homes.”

His conviction comes despite calls for the Government to begin shutting down the gas network as part of the shift to net zero.

The National Infrastructure Commission (NIC), headed by Sir John Armitt, last week called for the UK’s domestic gas network to be decommissioned at a cost of £70bn to encourage people to switch to heat pumps and help the country meet its net zero targets.

The cost of decommissioning would most likely be added to consumer bills but the NIC argues the policy would help halve domestic energy costs by 2050.

The Government plans to replace the UK’s 25 million domestic gas boilers with heat pumps to end our dependence on both gas and global gas prices. That dependence is why energy bills have doubled since 2021.

However, heat pumps need electricity and in a country committing itself to generating most of its power from wind farms, there will be many low wind days when gas is still needed.

Mr Butterworth foresees a time when millions of ‘green’ heat pumps will be whirring away – but using un-green power produced in gas-fired power stations.

He said: “That is actually far less efficient than burning gas in your house. Domestic gas boilers are about 90pc efficient but the best power station is about 50pc efficient.”

Mr Butterworth, whose career began as an apprentice fitter with British Gas, believes that breaking the UK’s gas addiction will be tougher than many realise.

The Government has made cutting back gas consumption one of the foundations of reaching net zero but Mr Butterworth said he does not anticipate selling less gas in 2040 despite official policy.

He said: “We have as a country invested in intermittent renewable energy, meaning wind. So when the wind doesn’t blow, the gas transmission system has to replace it, so I don’t see it.

“Gas won’t be used so often but on the days it is used there will be exactly the same amount of gas going through the pipes.”

Mr Butterworth is not worried about National Gas’s future in a net zero UK and expects the company to do very well out of the energy transition.

One of its key tasks will be to build two new national gas networks in addition to the high pressure transmission system that mainly carries natural gas. One will carry hydrogen and the other waste CO2.

The hydrogen will be fed to energy-hungry heavy industries such as power stations, cement works and chemical works to minimise their emissions. The CO2 will be sent northwards to Scotland where it will be pumped into rocks deep beneath the seabed for permanent disposal.

Mr Butterworth said: “For us the National Infrastructure plan is very positive. It even has a map of the future CO2 and hydrogen pipeline systems. It supports our plans for ProjectUnion, which is the first pipeline to run down the east coast, which will be 100pc hydrogen.

“They also support our carbon capture project to take the emissions from Grangemouth refinery in Scotland to the St Fergus terminal, where Shell will then inject it into a depleted store in the North Sea.”

However, Mr Butterworth said calls to decommission the gas network were “concerning” because heat pumps are not suitable for all homes.

He said: “There are 11 million homes that we know from various studies can’t be electrified or fitted with heat pumps. These are city flats, tower blocks, interwar flats in London and so on. There’s no explanation for what they should do.

“If you have brilliant insulation a heat pump works great as long as it’s not freezing. If you look at Scandinavia, they have heat pumps in 60-70pc of homes. But they all have wood burning fires too – and they all light the fire in winter to take the edge off the cold. But we don’t have that.

“I used to run the gas emergency service for 10 years and I worry about a bad winter. If hundreds of thousands of people have got heat pumps and then we hit a bad winter we’ll have people that are freezing. I’m genuinely worried.”

The Telegraph 

UK must offer businesses certainty over green energy, says boss of FTSE 100 firm

The UK risks seeing its manufacturing sector fall behind rival economies if the government does not offer certainty over policies on shifting to green energy, according to the head of FTSE 100 packaging maker DS Smith.

Miles Roberts, the company’s chief executive, said British government decarbonisation policy has lacked the clarity of European rivals, meaning DS Smith has moved ahead with a €90m (£78m) investment in a paper mill in Rouen, northern France, while waiting for more clarity from government before investing in upgrades in the UK.

The EU’s Green Deal and the US Inflation Reduction Act have offered enormous subsidies to help industries to reduce their own carbon emissions as well as to manufacture the technology needed for the transition away from fossil fuels.

“We’re saying to the UK, we’re here. What’s your plan?” said Roberts. “It would be very helpful to understand what’s happening in the UK that’s mirroring the EU. We’ve taken back control, so where is that control? How are we making Britain an attractive place to invest?”

He said without a national plan, businesses would look elsewhere to make investments.

DS Smith, which traces its history back to east London in the 1940s, makes and recycles cardboard for millions of packages a year. It collects used boxes from shops and supermarkets every day around the country, which it then pulps to make new ones. It has benefited from the boom in online deliveries by the likes of Amazon.

Roberts said: “If you are committed to carbon neutral and it is far more attractive to invest in those solutions elsewhere, what you’ll see is manufacturing decline in the UK.”

“What we’re seeing from the US and EU are some considerable incentives, financial support for us to invest in these sorts of solutions. Ourselves and a lot of other companies are starting to take advantage of these things.”

DS Smith is investing in its Rouen paper mill to install biomass burners to replace old coal-fired boilers and provide 80% of its large energy needs. The boilers will start operating in the first quarter of 2025.

Paper making is among the most energy-intensive industries. Waste paper or wood is pulped with water, then pressed between giant rollers, then dried. That means paper companies are highly sensitive to changes in government energy policy. In the UK energy costs are close to double comparable costs in the EU, Roberts said.

DS Smith said the biomass furnaces at Rouen would run on waste wood from households, packaging and furniture from industry and saw mills, as well as the waste from the paper-making process at the mill itself. It will not use wood or pellets made directly from forests.

Roberts said that the French authorities had offered long-term certainty. The local authority committed to provide 85,000 tonnes of waste wood a year, gave “a lot of certainty over the price”, and granted a biomass licence that will last for decades. He also highlighted a “more consistent collection system” for waste, compared with the fragmented approach in the UK led by more than 200 individual councils.

DS Smith has a similar paper mill to Rouen in Kemsley, Kent, which is the largest in the UK and the second largest in Europe. Kemsley, which opened in 1924 to make newsprint, received an EU subsidy for replacing gas-fired boilers with waste to energy plant, but it will have to replace them within the next 10 years as it tries to reduce emissions.

The Guardian

Labour planning electric car cash incentive after committing to 2030 petrol ban

Labour will hand drivers cash to buy electric vehicles under plans being considered to help the party stick to a 2030 ban on the sale of new petrol and diesel cars.

Officials are examining ways to tie subsidies and interest-free loans to British jobs and manufacturing amid fears that cheap Chinese models will start flooding the market in order to help Britain meet its net zero target.

It is understood that Labour prepared a package of financial incentives designed to help motorists switch to electric vehicles to be unveiled at its party conference in Liverpool which took place earlier this month.

One proposal at an advanced stage included a universal cash subsidy worth around £1,500 to help people who want to buy an electric car to fund a deposit.

Three-year interest-free loans were also proposed for those taking out personal contract purchase agreements, which allows people to rent cars over a multi-year period, with the option of buying it at the end.

Loan guarantees for people using car finance deals were also considered, as well as extra help for people on low and middle incomes.

However, a split within the party over both the costs and approach of the scheme is understood to have delayed an official announcement.

The shadow Treasury team led by Rachel Reeves is understood to have been the most resistant to subsidies and officials are now exploring ways to link any subsidies to cars made in Britain.

Others have raised concerns that mass government subsidies or guarantees could end up boosting Chinese manufacturers.

Electric vehicles cost significantly more than equivalent petrol or diesel models. Former Labour leader Jeremy Corbyn pledged in 2019 to provide up to £60bn over five years to fund interest-free loans on electric cars.

But soaring debt and high inflation means any subsidy scheme is likely to be on a much smaller scale as Labour focuses on planning reforms to make it easier to build battery gigafactories, as well as infrastructure to support the switch to electric and more support for buyers of second-hand EVs.

Labour has already been forced to scale back plans to borrow £28bn a year to invest in green jobs and industry in an attempt to prove its fiscal credibility.

“We need value for money,” said one Labour source. “We don’t want to end up in a situation where we’re spending taxpayers’ money to subsidise Chinese companies, so we need to make sure that the models that are available are built in Britain.”

Others have warned that Labour’s commitment to no new petrol and diesel cars by 2030 could threaten the survival of the UK car industry.

Just one in 10 of all cars purchased in the UK are currently made in Britain, according to the Society of Motor Manufacturers & Traders (SMMT).

More than 30pc of EVs sold in the first quarter of 2023 were manufactured in China. Only the Nissan Leaf and Mini electric are currently made in Britain.

“The only non-subsidy way to meet the target is we have a bunch of cheap Chinese EVs dumped on our shores,” said another Labour source.

The Telegraph

Utility Week’s weekend press round-up is a curation of articles in the national newspapers relating to the energy and water sector. The views expressed are not those of Utility Week or Faversham House.