A new commission set up by the UK Government to advise on heat decarbonisation has identified hydrogen as one of several technology options to help achieve net zero.
The ‘Net-zero: The Road to Low Carbon Heat’ report, published by the government’s heat commission, stated there needs to be “significant market building” for hydrogen in the UK in order to create the demand for the gas and drive down production costs.
The report suggested that in the longer term a Contracts for Difference mechanism or another market-based model could be deployed in the hydrogen sector, “learning from the successes of using long-term policy to drive innovation and cost reductions in the power sector”.
The study stated: “The European Commission has proposed a ‘carbon contracts for difference’ (CCfD) in its newly released Hydrogen Strategy as a tool to support scale-up.
“The long-term commitments and policy certainty that come with such mechanism builds market confidence.
“However, in advance of this there need to be several large-scale, publicly co-financed, regional hydrogen test beds which demonstrate that a hydrogen-based heat economy can be successfully delivered.”
The Government has taken some steps to addressing these barriers and increasing hydrogen production in the UK, the report noted, including a £90m investment that will partly go towards establishing large-scale, low-carbon hydrogen plants.
In the report the heat commission, convened by the CBI and University of Birmingham, along with industry figures, said the use of hydrogen to decarbonise heat is less disruptive to consumers and communities.
However, the amount of emissions reductions from hydrogen injection in the natural gas network is partially dependent on the method in which hydrogen is produced, the report stated.
One of the report’s recommendations is to update Gas Safety Management Regulations, including the Wobbe index, to allow greater flexibility for the injection of hydrogen into the gas grid.