Hydrogen – a vital step towards our Net Zero future

In our February Networking event, hosted by WSP in Birmingham, WUN hosted three industry experts to discuss the topic of hydrogen – an area which is proving to have an emotional reaction from people across the sector.

Angie Needle, Director of Strategy at Cadent Gas, Chia Nwajagu, Regulatory Analyst from Orsted and Rhian Jones, Associate at WSP set the context for the new ‘hydrogen economy’ and answered questions about this somewhat controversial topic.

The conversation set the context around the current global race for hydrogen – highlighting the fact that the hydrogen economy is predicted to be worth around £3.5 trillion by 2025. Nations globally are exploring how hydrogen can replace dependency on natural gas, with recent geopolitical events highlighting how volatile prices and availability of supply can be.

There is a widespread recognition that we have to electrify as widely as possibly, but at the same time, an acceptance that it won’t be possible to electrify completely to reach NetZero. The UK in particular is heavily dependent on gas for heating, as well as for heavy industrial processes that just cannot be replaced by electricity. Currently the UK uses 900TwH of gas to meet the requirements of transport, industry, heating homes and generating power – it would be impossible to fully replace these with electricity alone. Hydrogen therefore needs to be considered as part of the ‘energy jigsaw’ needed to reach Net Zero targets. It was also highlighted that the Net Zero targets were legally binding – the longer we wait to put in place the plans we need to meet them, the more expensive it will be!

Whilst the UK does have a hydrogen strategy – and the panel commented that it was a good strategy – it only gets us to 2030 with a total capacity of 10GW of hydrogen capacity, a long way short of the 200TwH that is forecast to be needed. There is a lack of clarity of what happens beyond that to bring further, much needed, capacity on board. All the participants highlighted the need for additional certainty over a longer timeframe to bring forward the investment needed – as it was clear that the government could not fund the new hydrogen itself with so many competing priorities. Hydrogen projects can take up to ten years to get off the ground, and a lack of long-term certainty about strategy and regulation meant that planned projects were floundering.

The discussion looked at how the UK was falling behind other countries in their approach – the US and Europe had strong hydrogen strategies that were attracting attention from global investors and the UK runs the risk of not finding the capital needed to invest in critical projects. It was clear that the EU and US were focusing on energy security in light of the Ukraine war and its knock-on impact on energy prices – ‘home grown’ energy was beginning to be seen as a matter of national security. The UK needs to put the same focus, or risk being left behind as investors see other regions as safer places to kick off long term projects.

Angie highlighted how Cadent was investing in test-bed projects in the UK, to understand whether hydrogen could be used to replace natural gas in domestic environments across the UK, and to engage consumers in some of the potentially tricky conversations that were going to come. All participants discussed how it was vital that all parties in the energy sector needed to work together – hydrogen is a part of the puzzle, but everyone needs to pull in the same direction to achieve NetZero and a secure energy economy.

Joanne Smalley, WUN Events.