UK’s shift to hydrogen energy could see sharp rise in bills, government warned

13th April 2023

Blending hydrogen into the UK's gas grid could lead to a sharp rise in consumer energy bills and only a relatively small reduction in emissions, a coalition of green groups has warned.

In a letter to the Energy Security and Net Zero Secretary, Grant Shapps, the group – which includes E3G and WWF-UK – warns that a 20% hydrogen blend would increase gas costs by around 16%, while only reducing emissions by 7%.

This is due to inefficiencies in burning hydrogen, with the letter also suggesting that the move could lead to accusations of greenwash as the public is told that “gas has gone green”, despite hydrogen-ready boilers continuing to burn fossil fuels for decades to come.

The warning comes in response to the recent Hydrogen Champion Report to government, which sets out recommendations for developing the UK’s hydrogen economy.

“We disagree with the report’s recommendation to stimulate demand for hydrogen through blending and heating,” the letter states. “This puts the early costs of building the hydrogen economy on the shoulders of consumers, who will bear the costs of higher energy bills and costs of conversion – on top of the proposed ‘hydrogen levy’ set out in the Energy Bill.

“As hydrogen is more expensive than the gas currently used to heat most UK homes, a 20% blend can only raise consumer prices. Raising energy bills during a cost-of-living crisis is the wrong way to develop industrial demand for hydrogen.”

Since hydrogen has a lower energy content per unit volume than natural gas, the group say that a 20% mix has only 86% of the heat output of natural gas, and that consumers will have to burn 16% more of the blended mix to create the same energy.

This means that fuel prices will rise by at least 16%, and that the savings in greenhouse gas emissions will be “nowhere near 20%”, and closer to 7%.

Without a strategic long-term vision for the hydrogen economy, the letters argues that blending could also risk locking-in hydrogen for domestic heating at the expense of other sectors.

It will not encourage strategic deployment of demand-side technologies in sectors like power generation, industrial processes, and aviation, where hydrogen could play a more cost-effective role in meeting net zero, according to the letter.

Moreover, it highlights recommendations in the report that would undermine the government’s heat pump targets, and argues against creating a loophole excluding hydrogen-ready boilers from a proposed market-based mechanism.

“Since the report itself recognises that hydrogen-ready boilers are unlikely to run fully on hydrogen for decades to come, this recommendation will enable ‘greenwashing’ for fossil fuel boilers and prolong the impacts of heating on carbon emissions and air quality,” the letter states.

“This undermines the government’s aim with the market-based mechanism in the Energy Bill. We encourage you to take these points into consideration in your review and response to the report, and when developing the UK’s future hydrogen policies.”

Image credit: Shutterstock

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