Hydrogen Week: key takeaways from ‘Delivering the Hydrogen Economy 2024’

Liverpool’s impressive Spine building was the backdrop for the North West Hydrogen Alliance’s conference focussed on delivering the hydrogen economy.

Appropriately, for an event with such an ambitious title, the occasion drew participants and presenters from various segments of the value chain. On the production side, BP and Cadent announced plans for a new 250MW plant. Corporate offtakers including Encirc and Jaguar Land Rover gave insight into their hopes, fears and intentions for hydrogen, and the role that distribution, storage and gas blending are going to play in the future hydrogen economy.

The day began by reviewing the progress of the HyNet low carbon hydrogen project, aimed at aligning extensive, low carbon hydrogen production with consumption across the Northwest region.

Panels discussed everything from the right way to plan for net zero, to the clamour from those in the mobility sector for sources of hydrogen, and perhaps most importantly of all, exactly what shade of pink is nuclear-produced hydrogen?

Some of the key themes and trends that were discussed over the course of the day are set out below:

Optimism for the Northwest

HyNet is an ambitious initiative that has generated considerable enthusiasm. This project aims to showcase the commercial viability of a comprehensive network involving large-scale hydrogen production, distribution, utilisation and storage. It serves as an excellent proof of concept for an extensive hydrogen network in the area and is designed to be expandable and connectable to other networks.

With EET Hydrogen’s 350MW blue hydrogen project, HPP1, hoping to receive a Final Investment Decision later this year, and with offtakers signed up to get connected, it’s fair to say that there was a good deal of optimism for the future of hydrogen in the region and what HyNet can do.

“We don’t care what colour it is…”

Whether hydrogen is blue or green was much less important than ensuring consistent, reliable low carbon hydrogen production, was the message coming from offtakers and mobility customers. Some of the confidence came from the adoption of the low carbon hydrogen standard (UK Low Carbon Hydrogen Standard - GOV.UK (www.gov.uk)), the requirement is technology-agnostic as long as the hydrogen meets the specified carbon intensity standards.

As one panellist succinctly observed: “we are talking about low carbon hydrogen. We mustn’t let perfect be the enemy of good when there is a climate crisis”. 

The clamour for hydrogen was particularly evident in the panel session on mobility, where the difficulties in both receiving renewable transport fuel certificates, and current challenges in building business cases on mobility demand were raised as real barriers to decarbonisation and opportunities. However, there was a note of optimism that mobility has found its voice for HAR1 (and that can be built on for HAR2). 

“… but we won’t wait forever”

One note of caution by offtakers was around the decisions they were going to have to make when it came to the conversion or replacement of equipment that is run on hydrogen (which in many cases is an all-or-nothing decision). There is a real risk that the hydrogen opportunity may be missed if the infrastructure isn’t there when those decisions needed to be made.  

One offtaker was very clear that if the hydrogen wasn’t available when they need it to be, they wouldn’t wait and instead would pivot to another option. Although everyone agreed hydrogen was their preferred solution for their industrial emissions, ultimately each offtaker has their own carbon reduction ambitions, and (quite correctly) those will not wait for the infrastructure to be in place.

Visions of the future

One panel looked to the longer-term opportunities for hydrogen production through new nuclear facilities (whether small or large). Interestingly, using the heat from the reactor to produce hydrogen has potentially higher efficiencies than generating electricity. 

As I have written about before (Hydrogen Vs Battery Electric: it's not a (Net) Zero-Sum Game (shoosmiths.com)) one of the things that keeps me optimistic for the future is the way that a number of interlinked challenges are being tackled together by the energy sector.

The tantalising prospect of steam produced by nuclear facilities being used firstly to generate electricity, secondly to generate hydrogen, and finally taking the residual heating for use in a district heat network was genuinely an exciting one, though one which was agreed to be decades away rather than years.

In the shorter term, some new or upcoming publications were highlighted at the event, in particular:

  • Gemserv have published a hydrogen demand study, carrying out a mapping exercise on likely UK hydrogen demand across multiple sectors – a must-read for anyone interested in understanding in depth the extent of the hydrogen opportunity.
  • SP Energy Networks are soon to publish a distribution-focussed future energy scenarios document, which (given the well-publicised challenges of getting to grid (The UK’s Review of Electricity Market Arrangements (shoosmiths.com)), should give us all some more insight into how Distribution Network Operators are approaching the future.

Events like these are great reminders of how far-reaching the hydrogen economy is, as well as highlighting the immovable interdependence of hydrogen, grid reform and renewables as key pillars of a net zero future. 

Disclaimer

This information is for educational purposes only and does not constitute legal advice. It is recommended that specific professional advice is sought before acting on any of the information given. © Shoosmiths LLP 2024.

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