Hydrogen is an emerging technology that plays a key role in all our Net Zero scenarios. In addition to being able to replace most uses of natural gas in the energy mix, its production via electrolysis and ability to be stored over long time periods can help to overcome the challenges, and harness the opportunities, that come with increased renewable generation in the electricity system – even in Consumer Transformation. However, despite being an essential part of the future energy system, its credible range in terms of both how much energy demand it meets and how it is produced is very wide. Clarity is needed as soon as possible on the future role of hydrogen, especially in residential heating as this will support the strategic coordination and whole energy system thinking required to meet Net Zero in a way that is secure, clean, affordable and fair.
The credible range of possible hydrogen use is very wide and this impacts the development of hydrogen infrastructure.While hydrogen for power generation is needed in all our Net Zero scenarios to support electricity Security of Supply, the broader levels of demand, hydrogen production methods, and end uses vary greatly between the scenarios.
A clear understanding of the desired benefits hydrogen is expected to provide, as well as how costs vary for different use cases, is vital. Relatively small changes in annual load factor, electricity price or commodity (natural gas and hydrogen) price can drastically affect the commercial viability of a hydrogen value chain and so the role of markets to provide clear signals is paramount.
Leading the Way meets the target of 10 GW of hydrogen production by 2030 set out in the British Energy Security Strategy. However, a corresponding demand side strategy is required to ensure that the hydrogen produced is effectively used and that the level of blending into the gas system is minimised.
Hydrogen supports operation of the energy system of the future as the production of hydrogen via electrolysis helps to integrate renewable electricity generation and reduce curtailment. This is because surplus electricity can be used to produce hydrogen at times of network congestion. High levels of electrolysis in Leading the Way contribute to it seeing the lowest levels of curtailed energy.
To fully realise the whole system benefits of hydrogen, and to provide energy security without unabated gas, high levels of hydrogen storage will be required. This is the case across all the Net Zero scenarios and, given the likely geological aspect of these projects, strategic investment is required now.
Biomass gasification can be combined with Carbon Capture Usage and Storage to make carbon emissions from hydrogen production net negative in Leading the Way and System Transformation. This offsets residual emissions in other sectors.