Regulatory policy

UK hydrogen policy taking shape (7): Hydrogen for heat: Facilitating hydrogen heating trial for grid conversion – government response released

In August 2021, the UK government released its hydrogen strategy and a number of policy consultations to encourage the development of a UK low carbon hydrogen sector (see articles (1) to (4) of this series here). In an industry where countries are in fierce competition to be among the first to meaningfully benefit from the upcoming low-carbon hydrogen revolution, momentum is crucial, and April 2022 saw the release of a new batch of hydrogen policy documents, including government responses to previous consultations. This is the third in a series of articles on the April 2022 documents (for other articles on these documents, see here).

One of the big unresolved questions in hydrogen policy concerns its potential role in space heating (either as a substitute for methane or mixed into the gas grid). In this article, we look at the UK government’s response to its August 2021 consultation on a ‘grid conversion’ hydrogen heating trial.

Try and try again

The possibility of replacing natural gas with hydrogen in the gas grid is still in the nascent stage of research, development and testing, as the information needed to assess its feasibility, cost and benefits is gathered. As part of this, the UK government has spent £25m on the Hy4Heat programme, which has looked at innovation work on the potential for home use of hydrogen, and is planning a neighborhood trial of by 2023, a village-scale trial by 2025 and a potential hydrogen-heated city before the end of the decade. The results of all this research will feed into the decisions that will be made in 2026 on the role of hydrogen for thermal decarbonization and whether to move to a hydrogen-heated city. The focus on heat in particular derives from analysis by the Department for Business, Energy and Industrial Strategy (BEIS) for the UK Heat and Buildings Strategy (2021). Heating in buildings currently accounts for around 23% of national carbon emissions, with the vast majority fueled by natural gas.

The possibility of replacing natural gas in the network is vast – it will affect existing gas networks right down to appliances in homes which will need to be able to take hydrogen instead of natural gas. All this must be offered to the consumer at an attractive price. Infrastructure will also have to be put in place for people who do not wish to take part in the trial, which raises the question of the separation of the natural gas and hydrogen networks. The recent Goldman Sachs “Carbonomics” report on hydrogen published in February 2022 estimates that, while hydrogen boilers have high greenhouse gas reduction potential (compared to other hydrogen reduction technologies) at around 46 Gt CO2eq, the cost is also relatively high at around 650 US$/tnCO2eq. Further technological advances will be needed to bring this price down.

Despite the challenges, the hope is that the trials will provide critical evidence on the feasibility, cost, convenience and consumer acceptability of the safe and secure transport of 100% hydrogen into the grid and its use. in buildings for daily activities. The illustration below, taken from the UK Government’s Hydrogen Investor Roadmap (April 2022), shows how the thermal component fits into the wider UK low-carbon hydrogen policy.

Hydrogen-ho

The August 2021 consultation sought views on the proposal that legislation is needed to allow gas networks to carry out a network conversion trial, building on the ‘neighborhood trial’ which must take place in Levenmouth, Fife in 2023. The consultation also asked stakeholders whether additional consumer protections are needed and how they should be implemented.

To switch from natural gas to hydrogen on a trial basis, the gas distribution network (GDN) company and its delivery partners will need to carry out work inside homes and businesses. There are currently limited grounds on which GDNs are permitted to enter private property, and it is expected that GDNs will always endeavor to reach agreement with occupiers before entering premises , except in an emergency (as they currently do with natural gas-heated homes). However:

  • to make the premises suitable for heating with hydrogen, it is possible that the GDNs will have to carry out certain additional modifications which are not necessary for natural gas; and
  • for consumers who do not wish to participate in the experiment, it will be necessary to remove their connection from natural gas supplies in complete safety.

As part of consumer protection, consumers in a network conversion trial area will no longer be able to use natural gas during the trial period. These consumers will either have to switch to hydrogen supplied by the gas distribution network or to an alternative heating solution offered by the GDN. In these circumstances, additional rights and protections may be necessary to ensure that consumers have a clear choice and are treated fairly.

After completing the consultation, the government now intends to:

  • the proposals for legislative amendments necessary to facilitate tests for converting the heating network to hydrogen; and
  • measures to strengthen consumer protection in the trial area.

Primary legislation (to be applied only in the context of a hydrogen network conversion trial) is proposed in order to:

  • extend existing GDN entry powers – should only be used as a last resort to ensure consumer safety;
  • establish regulations requiring GDNs to follow specific processes to engage and inform consumers appropriately on the trial; and
  • adopt secondary legislation to ensure that consumers are protected before, during and after the test – so that, while continuing to benefit from the same protections that they enjoy as consumers of natural gas (for example, the possibility of changing supplier), they will not be “financially disadvantaged as a result of the trial…including with respect to the installation and maintenance of hydrogen heating or an alternative solution”.

The village trial can provide essential concrete evidence on the practicalities of converting the gas grid and individual properties to hydrogen and using hydrogen for heating and cooking.

Roll out the blue/green carpet

Of course, the idea of ​​a hydrogen test is not completely new and some existing projects have already helped pave the way.

HyDeploy, run by Cadent and Northern Gas Networks, was the first project in the UK to integrate hydrogen into a natural gas network. This was a project for 100 houses and 30 university buildings on a private gas network at Keele University. Up to 20% hydrogen was blended into natural gas grids for an 18-month period ending in spring 2021. This blend allowed customers to keep their existing devices. Backed by Ofgem’s Network Innovation Competition, the £7m project was led by Cadent in partnership with Northern Gas Networks and Keele University.

SGN’s H100 Fife project is a green hydrogen heating network for homes on the Fife coast. Taking electricity generated by wind turbines for the production of green hydrogen, this project will then operate through a newly built gas network to up to 300 opt-in households. Customer devices will need to be replaced with hydrogen-compatible devices, and the project is expected to last four and a half years.

To mix or not to mix

The possible presence of hydrogen in the gas network raises a wide range of legal and structural questions. Customer choice, cost containment and the supply of gas mixtures to customer demand are all issues to consider, first on a smaller trial scale and then nationally. There is also the issue of hydrogen blending into the gas grid, only to then demix at the exit point to the difference in hydrogen content in natural gas that individual customers may require. HyDeploy claims that if hydrogen were mixed with natural gas across the UK at a similar level to its project (up to 20%), it could save around 6 million tonnes of carbon dioxide emissions each year – the equivalent of taking 2.5 million cars off the road.