Hydrogen

Learn all about how hydrogen can decarbonise the UK's energy system, from heating homes and businesses, to balancing the grid and supporting industry

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    What is hydrogen?

    Hydrogen is a versatile energy carrier that offers a clean alternative to fossil fuels like natural gas. It’s the most abundant element in the universe, and holds immense potential for decarbonising our energy systems and building a more sustainable future.

    This is largely due to hydrogen energy’s many applications, from transportation fuel and heating homes and businesses, to generating electricity and being used in hard-to-abate industrial processes.

    Hydrogen produces only water vapour when burned, making it a zero-emission fuel at the point of use. It can be generated from a range of sources, including natural gas, renewable energy and biomass. Its ability to store energy for long periods of time makes it vital for balancing the gas grid and solving intermittency issues for renewables.

    What is the overall environmental impact of hydrogen?

    The overall environmental impact of hydrogen depends on its production method. For example, grey hydrogen is produced using natural gas through steam methane reforming (SMR). In contrast, green hydrogen is produced using the electrolysis of water, meaning it uses fewer fossil fuels and has a lower carbon impact.

    Whether hydrogen is classed as low carbon or not depends on the amount of carbon dioxide released per volume of gas produced. This categorisation differs between the UK and the EU. The UK Low Carbon Hydrogen standard requires low-carbon hydrogen to have an emissions level of 20g CO2e/MJLHV or less. The EU Renewable Energy Directive sets the level at no greater than 3.4kg of CO2e per kg.

     

    Hydrogen’s value chain

    The value chain highlights the key stages in hydrogen’s journey, from production to end use.

    Hydrogen is made by separating it from other substances. The cleanest method is 'green hydrogen’, where electricity from renewable sources like solar or wind is used to split water into hydrogen and oxygen. This process releases no greenhouse gases.

    Another common method is 'blue hydrogen’, which uses natural gas and high heat. This releases CO2, but carbon capture technology aims to store most of it underground.

    So, while 'blue hydrogen' reduces carbon emissions compared to traditional methods, it doesn't eliminate them entirely.

    Other methods, like using biomass or nuclear energy, are also being developed. The way hydrogen is produced greatly impacts its environmental footprint.

    Hydrogen can be stored in a gas, liquid or solid form. When kept as a gas, hydrogen is typically compressed inside high pressure tanks, although there are also projects under development that store hydrogen underground in salt caverns or depleted oil and gas fields.

    Cooling hydrogen to very low cryogenic temperatures turns it into a liquid form, which can then be stored in insulated tanks.

    Alternatively, materials such as ammonia, palladium and magnesium can absorb or react with hydrogen to bind it and store it as a solid.

    Hydrogen can either be transported through dedicated pipelines, or blended with natural gas and moved through existing infrastructure. This is efficient for large volumes over long distances.

    Alternatively, where pipelines are impractical, hydrogen can be compressed or liquefied. This allows it to be moved by specialist lorries, ships or trains.

    Hydrogen can be used in a wide range of applications. From providing heat for industrial processes to generating electricity in turbines, one of its key uses is to help decarbonise our energy system.

    Using hydrogen - especially green hydrogen - significantly reduces greenhouse gas emissions.

     


    The hydrogen rainbow

    Hydrogen energy is produced in a variety of ways, which is often termed ‘the hydrogen rainbow’. These include:

    • Green hydrogen - made by using renewable energy from electrolysis of water.
    • Pink hydrogen - uses the same process of electrolysis as used for green hydrogen, but instead relies on nuclear energy.
    • Blue hydrogen - produced using natural gas and heated water, through a long-established process called steam methane reforming.
    • Black and brown hydrogen - produced in the least environmentally-friendly way, with black coal or lignite (brown coal) used to power the electrolysis process.
    • Turquoise hydrogen - created using methane pryolysis, a new technology that’s yet to be scaled up, which produces hydrogen and solid carbon.
    • White hydrogen - exists as a naturally-occurring gas in underground deposits.

    Learn more about the hydrogen rainbow and how hydrogen is produced.

     

    Hydrogen's role in decarbonisation

    Explore the four key ways hydrogen can be used to help decarbonise our energy system.

    The National Audit Office has reported that heating the UK’s 28 million homes accounted for 18% of all UK greenhouse gas emissions in 2021. Using hydrogen to heat both homes and businesses presents an opportunity, then, to help lower the UK’s carbon footprint.

    Hydrogen can also be used for industrial heating. Industrial processes often require high-temperature heat, and they can be challenging to move to other decarbonised options like electricity. For industrial sectors that are difficult to decarbonise, like cement and steel manufacturing, hydrogen is a credible, low-carbon option.

    Hydrogen is not only a clean energy carrier but also a versatile tool for enhancing power generation’s efficiency and sustainability. Firstly, it can be used as a fuel in gas turbines or fuel cells to generate electricity. For the former, it typically replaces natural gas, whereas the latter directly converts the chemical energy of hydrogen into electricity, with high efficiency and minimal emissions.

    Because of the increasing use of intermittent renewable energy, hydrogen is also a valuable alternative for balancing the electricity grid. It can help smooth out the fluctuations of sources like wind and solar power, guaranteeing a dependable energy supply - even when the sun isn't shining or wind isn't blowing.

    Hydrogen’s ability to be stored for long periods makes it ideal for seasonal energy storage, while addressing the intermittency of renewable energy sources. Additionally, because hydrogen can be stored in large quantities, it’s suitable for balancing the grid and providing backup power during times of peak demand.

    One report from Hydrogen UK found that investing in 3.4TWh of hydrogen storage - equivalent to the average electricity consumption of 850,000 households - is critical to boosting the UK's future energy security.

    Unlike domestic vehicles where electrification offers sufficient performance and power, heavy-duty transportation, aviation and shipping require fuels that are more energy dense. The development of fuel cells and conventional internal combustion engines, alongside hydrogen filling stations, may make it possible to reduce the emissions of these ‘difficult-to-decarbonise’ transport options.

    As highlighted in the UK Hydrogen Strategy there could be a demand of up to six TWh of low-carbon hydrogen in the transport sector by 2030.


    The UK’s Hydrogen Strategy

    The UK's Hydrogen Strategy hopes to deliver the hydrogen economy at pace, having significantly ramped up its hydrogen ambitions in recent years. While the initial target was 5GW of low-carbon hydrogen production by 2030, the government is now aiming for up to 10GW, prioritising green hydrogen from renewable sources.

    Working alongside the British Energy Security Strategy, this framework sets out:

    • The development and investment roadmap to scale up hydrogen production, including Hydrogen Allocations Rounds (HAR) and infrastructure plans
    • How innovation research and development will be funded and encouraged
    • The uses of hydrogen in industry, power, domestic heating and transportation
    • Mechanisms aimed at creating a market for hydrogen usage
    • Ways to upskill workers, as well as attract and retain the right talent, to build the industry

    To facilitate the wider adoption of hydrogen, understanding the current legislative landscape is crucial. While hydrogen is already addressed by primary legislation in the Gas Act 1986, other regulations will likely need to be updated. These include the Uniform Network Code, the Supply Point Administration Agreement, the Smart Energy Code, and the Gas (Calculation of Thermal Energy) Regulations.

    How does Europe’s hydrogen strategy compare with the UK’s?

    Both the UK and Europe are strategically positioning hydrogen as a vital means of transitioning towards cleaner energy systems. Both are aligned in their efforts to establish regional hydrogen hubs, and support technological advancements and research initiatives that can help create a viable hydrogen market, underpinned by robust regulatory frameworks.

    Despite these common goals, there are some nuances. The EU's strategy is heavily weighted towards green hydrogen, which it views as the long-term, sustainable solution. In contrast, the UK maintains a more technology-agnostic stance, incorporating blue hydrogen - produced from natural gas with carbon capture - into its energy mix.

    The EU is also pursuing a comprehensive, pan-European hydrogen infrastructure. This will require substantial investments in pipelines and import facilities to create a unified market. Conversely, the UK is focusing its hydrogen ambitions more on regional clusters.

    Hydrogen projects

    To support this strategy, Xoserve has been supporting the following hydrogen projects:

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    Common queries

    Hydrogen offers a powerful solution to the challenges of integrating renewable energy into the grid. Periods of low electricity demand, such as overnight or the summer, can coincide with high renewable generation, leading to excess energy. Instead of wasting this valuable resource, we can use electrolysis to convert it into hydrogen, effectively storing the power of the sun and wind for later use.

    In this way, hydrogen can smooth out the peaks and troughs of renewables. When demand spikes or renewable generation dips, hydrogen can be converted back into electricity using fuel cells or gas turbines, ensuring a reliable and consistent energy supply.

    However, there are challenges that need to be overcome before hydrogen can fulfil this level of decarbonisation, including:

    • Storing hydrogen safely and effectively, as it’s a highly volatile fuel
    • The high level of investment in value chain infrastructure, including compression for storage and secure distribution
    • The cost of operations and production, with methods relatively unknown and untested
    • Ramping up production so sufficient capacity is created for the whole UK network

    The ability to store and dispatch energy on demand will make hydrogen a game-changer for grid stability. It will allow for the seamless integration of renewable sources and pave the way for a decarbonised energy system.

    To encourage investment and scale up production, it’s vital to make hydrogen a financially attractive option. Production costs can be reduced by advancing electrolysis technology, optimising hydrogen production processes and tapping into gains from economies of scale.

    For example, concentrating hydrogen production within industrial hubs unlocks economies of scale. As production ramps up, the cost of hydrogen falls, driven by shared infrastructure, optimised processes and streamlined supply chains. This creates a powerful economic engine, driving down costs and accelerating the adoption of hydrogen.

    Hydrogen blending can also offer a mechanism to de-risk hydrogen investment. It allows hydrogen to be injected into the network alongside natural gas, even when dedicated offtake or storage isn't available. This helps to resolve the mismatch between supply and demand in the early stages of hydrogen market development.

    Developing supportive policies is also critical. From implementing carbon pricing mechanisms to offering financial incentives for hydrogen production - such as tax credits or subsidies - can support its uptake. Creating a stable market through robust hydrogen business models, long-term contracts between producers and consumers, and clear industry standards around production, storage and distribution are necessary too.

    Repurposing the existing gas system for hydrogen distribution and storage limits the need for costly new infrastructure. Pioneering R&D investment can help drive greater innovation in hydrogen technologies, reducing costs in the long run and accelerating the development and deployment of hydrogen solutions.


    More information

    If you want to know more about any of the above please email us at decarbonisation@xoserve.com.

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