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    UK should resist green-only hydrogen path: Xodus


The UK government is due to publish its long-awaited hydrogen strategy later this month.

by: Joseph Murphy

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UK should resist green-only hydrogen path: Xodus

The UK has an edge in producing low-carbon hydrogen and should exploit it to decarbonise its own economy and provide supplies of the fuel to its neighbours, global energy consultancy Xodus argues in a report published on August 2. Furthermore, the country should "resist the temptation" to focus only on green hydrogen and embrace its blue hydrogen potential as well, the report concludes.

The UK government is due to publish its long-awaited hydrogen strategy later this month. Xodus argues that the country is optimally located for blue hydrogen production, benefiting from a well-developed gas supply chain and substantial offshore CO2 storage potential. Indeed, the British Geological Survey estimates that the country could store as much as 70 gigatons of CO2, equivalent to 190 years of its CO2 emissions in 2019.

The country is projected to produce 213 TWh/year or 5.4mn metric tons/year of low-carbon hydrogen by 2050 according to the Climate Change Committee (CCC)'s Balanced Net Zero Pathway. It would require 2.32bn ft3/day of methane to produce this much blue hydrogen, at a cost of $1.50-2.40/kg of the fuel.

In contrast, green hydrogen costs $2.5-8.0/kg to produce. Costs will fall, Xodus expects, but green hydrogen will remain more expensive even into the early 2030s, when the levelised cost of hydrogen produced by offshore UK wind will be around $2.6/kg by the early 2030s, versus $1.0/kg for the country's blue hydrogen.

What is more, to produce the same 5.4 mt/yr of green hydrogen by 2050, some 33 GW of dedicated electricity supply would be needed, or 61 GW of installed wind turbines taking into account the capacity factor. The UK can potentially develop 150 GW of wind capacity, but the CCC says that only 95 GW will be developed by 2050. Wind turbines are also  far from demand centres which are mostly in the south and midlands, and the onshore grid is already constrained.

However, this is not say Xodus urges against green hydrogen development. The UK is the windiest country in Europe and is therefore best located to develop hydrogen from offshore wind, it notes.

And in fact, placing green and blue hydrogen production sites together has synergies. Oxygen released during production of green hydrogen can be used to improve the efficiency of blue hydrogen production, and there are pricing differential advantages between green electricity and gas. Putting them together can also ensure better supply and demand curve management, while reducing storage and buffering requirements.

"A brand of 'UK low carbon hydrogen' should be championed, a mix of both green and blue," the consultancy says, although warning the UK government to "resist the temptation to deliver only green hydrogen to the continent as this is not in the UK's interest. As an industry and a nation, we need to push back against just green hydrogen and actively campaign for blue or teal UK low carbon hydrogen."

"Blue hydrogen is a low carbon and commercially accessible technology, and we should not pander to the 'green only' ideal; we need realism not idealism to solve the energy transition conundrum," it continues. "To that point, schemes that consider making hydrogen in the UK and selling direct to Europe should not be as encouraged as schemes that provide hydrogen to the UK and then the continent."

In addition to its gas supply, CO2 storage capabilities and offshore wind potential, the UK also has well-developed gas and port infrastructure it could exploit to become a hydrogen exporter, according to Xodus. It is also close to industrialised areas in north Europe, with sophisticated and co-operative regulatory bodies that can support hydrogen development and it also has the financial power to access green funds. It also benefits from a wealth of engineering and project management skills.

Xodus called for substantial carbon taxation to "power the energy transition in the UK," but cautions against a tax that makes the country's manufacturing less competitive or materially increases costs for consumers. Blue hydrogen also provides "a revenue route" for carbon capture utilisation and storage projects, and helps enable the technology's use elsewhere.