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UK Hydrogen Economic Impact Assessment

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The Offshore Wind sector has been a remarkable success story; here the hydrogen sector looks to similar benefits the the UK economy including jobs and regional regeneration opportunities as it seeks stakeholder support for the next phase of the energy transition. The UK hydrogen industry could become an £18bn economy for the UK by 2035 and create 75,000 jobs.


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Charley Rattan's picture

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Nathan Wilson's picture
Nathan Wilson on Aug 16, 2020 1:07 am GMT

Fuels can be divided into two broad categories: low value pipeline gas and high value transportation fuel.  Fuels made from excess clean electricity will be expensive, at least for many, many years.  So they should be targeted at the high value transportation market (and note that because of its liquid form, ammonia is a more convenient transportation fuel than H2).

Attempts to use hydrogen as a pipeline gas will clearly make it more expensive.  Worse yet, it will increase fossil fuel use, due to the lower cost of H2 made from fossil fuel, and the inefficiency of the conversion process. 

Since H2 from fossil fuel will result in CO2 capture, we should also ask ourselves what is the best use of our presumably limited appetite for CC&S. (I would think peaking power plants).

In terms of end use equipment, H2 for heating is a terrible idea.  It will never compete with cheaper fuels.  The only way to compete with cheap fossil fuel is to not use fuel for heat.  We need district heat networks in cooler climates and urban areas, and efficient electric heat pumps elsewhere.

Matt Chester's picture
Matt Chester on Aug 17, 2020 11:33 am GMT

Fuels made from excess clean electricity will be expensive, at least for many, many years.  

Why is this inherently the case? What about the economics of being able to do something with excess renewable generation instead of curtailing or any of the other inefficient results during peak generation? 

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