Alex Barnes - 17 January 2020
Climate change is moving up the political agenda. Activists have called for the UK to achieve net-zero emissions by 2025. The UK has adopted a target of net zero emissions by 2050, the first leading economy to do so, but is likely to miss its near term targets.
In the public’s mind, decarbonisation is all about renewable electricity. However, electricity generation only accounts for a quarter of Europe’s greenhouse gas emissions, and also only a quarter of final energy consumption. Total emissions will need to fall by 95 per cent or more by 2050 to meet the Paris targets.
This will mean decarbonising a lot more than electricity. Replacing natural gas with hydrogen could provide part of the answer. A recent study by consultants Pöyry shows how.
An “obvious” answer to decarbonisation is the electrification of the economy. Renewables and nuclear would replace fossil fuels in power generation, and electricity or biomass would power the 75 per cent of the economy that currently does not use electricity. This implies a complete restructuring of our energy economy: no more fossil fuels for transport, heating of homes or businesses, or for high-temperature process heat for glass or steel making. A new energy infrastructure is needed such as charging points for electric cars, or new heating systems in people’s home, including a massive expansion in renewables and nuclear capacity, and the networks to deliver electricity to where it is needed.
This then raises an important question: not if it can be done (although electrification of certain sectors, such as trucks or industry, remains a challenge) but whether it will be done. Will people accept more nuclear power stations? Will householders/ homeowners pay to replace their oil or gas boilers with heat pumps? Will industry leave Europe if it cannot use electricity instead of gas or oil?
Betting everything on electrification is a high-risk strategy. Policymakers should keep in mind that it is the reduction in emissions, which is important, rather than the means. Currently natural gas provides just under a quarter of Europe’s energy needs. The gas network crisscrosses the EU sending convenient and economical energy to where it is needed. Replacing natural gas with hydrogen can mitigate the risks associated with electrification.
Hydrogen itself produces no emissions when combusted, and can be used in fuel cells, for example in heavy vehicles. It can be transported by existing pipelines and used in existing appliances, albeit with some adjustment. It can provide the high-temperature process heat that industry needs. It can be stored, providing both the short term and seasonal flexibility that renewables-based electricity cannot, as well as providing dispatchable power when used in gas turbines.
Although hydrogen can be made from electricity via electrolysis of water, this only makes sense in areas which have access to a surplus of low-cost renewable electricity. For much of Europe this is not the case, so producing hydrogen from natural gas makes more sense, using either steam methane reforming or methane pyrolysis.
The former process produces CO2, which then needs to be sequestered. The latter produces solid carbon, which is both easier to store and has commercial uses. Both methods are cheaper than electrolysis in most circumstances. In addition, pyrolysis enables a switch to hydrogen for those countries without access to low-cost renewables or carbon capture and storage.
The challenge for policymakers is to resist the temptation of “picking winners” when it comes to decarbonisation. The emphasis should be on creating as many ways as possible to meet the Paris targets to make a positive outcome more likely. Keeping the door open to hydrogen from natural gas would be a good start.
This blog has been published previously on Gastech Insights
About the author
Alex Barnes, Director of Barnes and Associates, is an experienced energy professional and an industry expert on energy regulation including regulated third party access to networks, financial regulation, market design and climate change policies. He has extensive experience with liberalised energy markets in Europe including gas, power and LNG.