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Is hydrogen the UK's energy future?
As the country emerges from the coronavirus, accelerating the roll-out of CCUS and hydrogen projects would provide a much-needed boost to the economy.
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Hydrogen and CCUS: now is the time to act

Hydrogen is crucial for the UK’s energy future and to meeting its emission targets, write Prem Mahi and Adina Popa.

Hydrogen is clean, versatile and easy to transport and store. It offers a means of fuelling transport through direct combustion or conversion to electricity in fuel cells. It can partially or wholly replace natural gas as a heat source for power generation, industrial processes and in our homes and workplaces. It can be used for storage, providing ready energy on demand. And piped, shipped or sequestered in a solid, it is a convenient vector for energy transmission.

Most hydrogen is produced from natural gas, and it will continue to be the predominant source as the hydrogen economy is scaled up. Carbon emissions from the methane to hydrogen conversion process need to be captured and stored. But over time, hydrogen will be produced by electrolysis from water using electricity from renewable and possibly nuclear sources.

Carbon capture use and underground storage (CCUS) is essential to the UK achieving its 2050 net-zero emissions goal, in the view of the independent Committee on Climate Change. CCUS enables use of fossil fuels to be wound-down over a period of transition to an entirely green energy system. It is an important stepping-stone to a cleaner, hydrogen-powered economy.

As the country emerges from the coronavirus lockdown, accelerating the roll-out of CCUS and hydrogen projects would provide a much-needed boost to the economy. Investment in CCUS also supports the government’s ‘levelling up’ agenda, helping to create jobs and infrastructure in industrial heartlands, from South Wales and the North-West to Teesside and the Scottish North Sea coastal areas.

Developing a network of CCUS projects along the east coast of the UK – capturing 75MtCO2 per year and producing ‘blue hydrogen’ from natural gas through the process of steam methane reforming or auto-reforming – would provide £163Bn of economic benefits, including 225,000 jobs, and outweigh the £34Bn capital cost by a ratio of 5:1, according to a 2017 study by Summit Power.

The UK’s long history of offshore oil and gas exploration provides the technical expertise and underground space to store carbon. Over the past 10 years or more, projects have tested the feasibility of capturing, transporting and storing CO2, including the repurposing of existing infrastructure and assets.

Hydrogen production, transport and storage networks are crucial to a sustained development of the hydrogen economy. Supporting R&D in this area will greatly benefit the UK economy in the long-run. UK industry and government have explored business models for CCUS, and the preferred model is expected to be outlined shortly in a white paper.

So, what’s holding us back?

Cost is one issue, but costs are falling. Expansion of CCUS would itself produce a virtuous circle of reduced costs, greater innovation and faster delivery. Clusters, linking multiple sources of CO2 to shared transport and storage facilities, would maximise economies of scale and lower the unit costs of developing CCUS infrastructure networks, as would repurposing existing assets.

A steadily rising carbon price covering the whole economy would create a level playing field for all businesses, while targeted incentives would encourage industries to switch to hydrogen, boosting demand and bringing down prices. Regulatory reform to allow hydrogen to be blended with and ultimately replace natural gas for residential and industrial use, and a government strategy for hydrogen, would signal the direction of travel.

The 2020 Budget included a commitment to invest up to £800M to establish at least two carbon capture and storage clusters by 2030 as well as backing for the construction of a new gas-fired power station fitted with CCUS technology, while about £30M is available for projects to develop hydrogen production. Now is the time to quicken the pace, move from a R&D focus to invest in building the infrastructure and regulatory framework to turn the cluster concept into reality – supporting the COVID-19 economic recovery and creating green growth.

2050 is the deadline for decarbonising the economy. Time to act is running out.

Adina Popa

Global lead for carbon capture and underground storage, Mott MacDonald

Prem Mahi

Innovation manager for energy, Mott MacDonald

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