Why hydrogen may fuel the future economy

Engineers and politicians hope the clean-burning fuel will take off, but it remains an expensive source of energy

Hydrogen Airbus zero-emissions jet
The Airbus ZEROe concept airplane could take to skies within 15 years, powered by hydrogen Credit: AFP/Getty Images

With its Stingray-esque figure and wings that merge into its body, the Airbus ZEROe concept airplane is a sleek, white vision of the future. The plane-maker hopes the hydrogen-fuelled model could be in the sky within 15 years, carrying up to 200 passengers as the “world’s first” zero emissions plane.

“This is a historic moment for the commercial aviation sector,” Guillaume Faury, Airbus’s chief executive, proclaimed as he unveiled the model in September, adding he “strongly believed” in the potential of hydrogen to cut carbon emissions.

He is not the only one putting his faith in the clean-burning gas.

Industrialists, engineers and politicians are looking to hydrogen to help as the pressure to meet Paris climate goals intensifies.

Germany plans to invest €9bn [£8bn] towards generating hydrogen from renewable power, while analysts believe the global market could be worth $2.5 trillion by 2050.

While there remains debate in the UK over the extent to which hydrogen should and will be used, there’s a broad industry consensus that much more will be needed.

The average low-emission household car is more likely now to run on rechargeable lithium-ion batteries. But hydrogen is set to find its place in heavy industry, trucks and planes, and possibly heating, in cases where replacing fossil fuels with renewable power is difficult or impossible.

Scotland has intoduced hydrogen-powered double-decker buses Credit: Michael Wachucik/AFP

Hydrogen remains costly

Ministers are laying the groundwork for expanding the industry, but producing hydrogen cleanly, either through electrolysis or from natural gas coupled with carbon capture, is difficult and expensive, raising questions over whether it will get off the ground, and at what cost. Failure would be a problem, many argue.

“Hydrogen solves a lot of problems that no other technology can solve,” says Guy Newey, strategy director for Energy Systems Catapult, the innovation centre. “Electrification is such an efficient process, but for some industrial processes, it is unlikely to work.”

The scale of the challenge is clear in just one area where hydrogen could take a role: heating.

Hydrogen was blended into the “town gas” that heated homes until the 1970s, when town gas was replaced with cleaner natural gas following North Sea discoveres. But with natural gas now falling out of favour due to its emissions - home energy accounts for 14pc of UK emissions - hydrogen could make a bigger comeback.

A Keele University trial has successfully supplied 130 homes with 20pc hydrogen blended into natural gas, and bodes well for a wider roll-out.

Hydrogen’s full eventual role in heating is unclear, and it is likely to be used alongside electric heat pumps.

But if most of the heating system was switched to hydrogen, the Committee on Climate Change (CCC), independent government advisers, believes 270 terrawatt hours of hydrogen would be needed each year. That is about 10 times current production, and compares to total annual power output of about 350 terrawatt hours.

The CCC envisages hydrogen at scale being produced using gas and carbon capture (“blue hydrogen”).

Producing all the hydrogen in its scenarios via electrolysis (“green hydrogen”) could require about 305 terrawatt hours more electricity. Yet carbon capture is not yet in place at scale in the UK, and despite £800m promised in government funding for industrial clusters, it is by no means guaranteed.

New subsidies loom as politicians try and set the stage for the industry to grow, and repeat their success with offshore wind, where guaranteed electricity prices have turned it into a major force, supplying 10pc of UK electricity.

“Blue hydrogen is currently more expensive than natural gas, so some government support will be necessary to encourage take up in industry,” says Simon Virley, head of energy at KPMG.

He adds: “With the right support, green hydrogen could be cheaper than blue hydrogen within a decade. The cost reductions required are very achievable and similar to those seen for solar, or offshore wind, over the past decade.”

Hydrogen a ‘top priority’ for UK

The Government is being advised on its hydrogen strategy by industry players including BP, Shell, Equinor, Orsted, ITM Power, Ryse and BOC Linde, who all have representatives on its new Hydrogen Advisory Council.

The council is co-chaired by Kwasi Kwarteng, the energy minister, and Sinead Lynch, Shell’s UK country chair, as an independent industry representative.

Minutes for its first meeting, in July, note that Mr Kwarteng said hydrogen was one of his “top priorities”, while the group discussed ambitions for the UK as an “international player” with “export opportunities”.

Targets in the region of producing 150 terrawatt hours by 2030 were suggested. Lynch agrees there is a long way to go before that.

“We are starting almost from scratch building a new market for low carbon hydrogen,” she says. “The first few industrial scale projects and associated infrastructure are going to need time-limited support.”

Lynch says the focus is on using hydrogen as a substitute for electrification where that will not work, rather than trying to muscle its way through. “It’s fairly obvious I think that if you use the electricity [directly], it is more cost effective than using it to split a water molecule to create hydrogen.”

“No-one is trying to do anything other than create the most cost-effective decarbonised industry.”

For Jo Bamford, founder and executive chairman of hydrogen business Ryse and owner of Wrightbus, there are also other compelling reasons.

Britain should make the most of its strengths, he argues, rather than try and compete with China’s dominance in battery materials. “If you are going to go into new energy - we have lots of wind, lots of water,” he says.

“Every other government in Europe has woken up to the fact that China has won the war on batteries.”