The great hydrogen gamble: hot air or net zero’s holy grail?

Posted on October 15, 2022Comments Off on The great hydrogen gamble: hot air or net zero’s holy grail?

Standing in front of a lime green doubledecker hydrogen bus, Jo Bamford posed for a photo alongside transport secretary Anne-Marie Trevelyan at the Conservative party conference’s “hydrogen zone” in Birmingham.

A week earlier the JCB heir’s team was busy with photocalls featuring Labour heavyweights Keir Starmer, Rachel Reeves and Ed Miliband at the Labour conference in Liverpool.

The political offensive was emblematic of the Bamford dynasty’s close political ties and the hydrogen industry’s eagerness to foster goodwill in Westminster. Companies including Cadent, National Grid, Centrica and boiler maker Worcester Bosch joined Bamford’s companies Ryze Hydrogen and Wrightbus in trying to convince Labour and Conservative MPs that hydrogen, the emissionless, highly combustible gas, can be a valuable weapon in the fight against the climate crisis.

Bamford’s political connections are well-known: his billionaire father Anthony is a big Tory party donor, mainly via JCB. The peer helped to pay for Boris Johnson’s wedding celebrations and the former prime minister even accepted free accommodation for his family from Lord Bamford’s wife, Carole, last month.

Johnson smashed a polystyrene wall in a JCB digger bearing the slogan “Get Brexit done” in 2019 and earlier this year visited its production facility in India.

Former PM Boris Johnson trying out a hydrogen-powered car at the industry centre at the University of Sunderland in 2020.
Former PM Boris Johnson trying out a hydrogen-powered car at the industry centre at the University of Sunderland in 2020. Photograph: Scott Heppell/AFP/Getty Images

Since Jo Bamford bought bankrupt London bus maker Wrightbus in 2019, the grandson of JCB founder Joseph Cyril Bamford has bet big on hydrogen. It has won several taxpayer-funded contracts for green transport, including an £11.2m deal to develop hydrogen fuel cell technology in Northern Ireland. Last year, he launched HyCap, a £1bn investment fund designed to back hydrogen specialists from producers to fuelling stations and transport firms.

Bamford is far from alone in cultivating cordial relations with the government. There are at least 120 paid lobbyists for hydrogen operating in parliament at present, according to estimates from the MCS Charitable Foundation. In the EU, a vast network of fossil fuel companies, trade associations and other interested parties are putting the case for hydrogen.

Their goals are disparate, from gaining support and subsidies for decarbonising energy-intensive industries to convincing authorities to switch to heating homes with hydrogen boilers. Hydrogen is seen as a transition fuel to a future powered by renewables such as wind and solar, allowing existing gas pipes to be used to pump the gas.

But the march of the hydrogen lobby has thrown up many questions – how much will it all cost, are there more affordable ways of getting to net zero, and are vested interests such as the oil industry simply trying to stave off extinction?

“Green” hydrogen is produced by splitting water using electricity from renewables, with minimal emissions. However, detractors argue that creating green hydrogen for home heating is six times less energy efficient than using heat pumps powered by electricity. Meanwhile, “blue” methods to produce the gas from fossil fuels require the carbon dioxide released to be captured and stored to prevent emissions. However, this relies on the success of the unproven carbon-capture and storage industry, which is in its infancy. Last year, the chief executive of the hydrogen lobby group quit, saying he could no longer lead an association that included oil firms backing blue hydrogen projects, because the schemes were “not sustainable” and “make no sense at all”.

Although the Climate Change Committee (CCC), which advises the government, sees the element the most abundant in the universe playing an important role in the UK’s transition to net zero, there is a fierce debate over which industries and in what form and quantities it should be employed.

Labour leader Sir Keir Starmer views a hydrogen-powered bus during a tour of Tyseley Energy Park in Birmingham earlier this year.
Labour leader Sir Keir Starmer views a hydrogen-powered bus during a tour of Tyseley Energy Park in Birmingham earlier this year. Photograph: Christopher Furlong/Getty Images

The relentless efforts of the industry’s champions appear to be paying off: hydrogen has been mentioned 402 times in parliament so far this year and 595 during 2021, up from 392 in 2019 and just 18 times in 2015.

Earlier this year, the government doubled its production target to 10 gigawatts by 2030. Significant state funds have been channelled into exploratory hydrogen projects. In May, a £240m Net Zero Hydrogen Fund was launched “to derisk investment and reduce lifetime costs” of production.

The same month the business department awarded £60m to 28 UK projects through its HySupply 2 competition. They included £9.2m to allow South Yorkshire’s ITM Power to build a 5 megawatt electrolyser stack, which separates hydrogen from oxygen in water using electricity, while Cadent Gas landed £296,174 to examine how to purify hydrogen that has been through the gas grid to make it suitable for use in vehicles such as lorries.

In his market mayhem-inducing “growth plan”, former chancellor Kwasi Kwarteng identified five hydrogen projects he hoped to accelerate, including Cadent’s HyNet scheme to build the UK’s first 100% hydrogen pipeline network in the north-west.

The all-party parliamentary group (APPG) on hydrogen was established in 2018 and is chaired by Conservative MP Jacob Young. APPGs are informal cross-party groups that have no official status within parliament and have in the past raised concerns over conflicts of interest.

The hydrogen APPG, which until recently counted Lord Bamford among its members, is funded by a group of large energy producers, network operators and boiler makers, including Shell, EDF, Cadent, Bosch and industrial manufacturer Johnson Matthey.

In July, Johnson Matthey executive Jane Toogood was named Britain’s “hydrogen champion”, with the task of “bringing industry and government together to realise the government’s hydrogen ambitions”. Three months earlier, the government underwrote a £400m loan to Johnson Matthey to research sustainable technologies. There is no suggestion of wrongdoing in any of the contracts mentioned in this article.

The appeal of hydrogen for companies with existing gas infrastructure and investments in natural gas is clear. They are concerned that their assets could become “stranded”, rapidly devalued by the move away from fossil fuels.

It is not just the companies themselves pushing the cause. Rightwing thinktank the Centre for Policy Studies, where Lord Bamford is a board member, hosted a fringe event at Tory party conference attended by the business secretary, Jacob Rees-Mogg, and has argued Britain can “lead the world in hydrogen power”.

The Institute of Economic Affairs, which has close links with Liz Truss, argued that there “is still a lack of policies to create demand for hydrogen”.

hydrogen power types

Michael Liebreich, chair of Liebreich Associates and founder of the analyst firm Bloomberg New Energy Finance, says: “I see it as a two-way bet for the fossil fuel companies – either they receive subsidies for hydrogen or they delay the process so we’re reliant on fossil fuels for longer.”

The use of hydrogen for heating homes is also hotly debated. Later this month, the APPG will host a session on whether hydrogen-ready boilers are the solution to decarbonising homes, with speakers from Scottish gas distributor SGN and boiler maker Vaillant.

Liebreich, speaking after delivering a keynote speech at the World Hydrogen Congress in Rotterdam last week, said: “The gas network companies want to get government funds and money through household bills to upgrade the network but no one talks about the fact that to switch over 24m homes will take decades and decades. And while that happens, we will have lost time to accelerate the rollout of heat pumps, which are the only thing that will work.”

Liebreich says even conservative estimates of the cost of converting infrastructure and appliances to hydrogen amount to £171bn to cover the whole of the UK. There are also concerns that “embrittlement”, caused when hydrogen weakens pipes, could cause leaks.

Liebreich argues that even in a system that blends hydrogen and natural gas, the environmental gains of using hydrogen are far outweighed by using the green electricity in other ways, such as powering cars or steelmaking.

The Guardian revealed last month that a closely watched project to build a new hydrogen network for 300 homes in Scotland was struggling to get off the ground.

CCC member Julia King says: “If the UK wants a growth strategy, hydrogen could be a chunk of it they should be supporting. We’re going to need hydrogen to decarbonise heavy industry. The jury is out on transportation because there are options with electricity, although for very long distances it’s possible we may need hydrogen.

“The biggest question mark is on home heating: there’s mounting evidence that says it’s not cost effective or energy efficient to use hydrogen.”

A spokesperson for Johnson Matthey said that the company “sees the advancement of hydrogen technologies as a critical enabler to achieving decarbonisation targets globally, and we are proud to be a supporter of the APPG on hydrogen’s activities”.

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