Policy & Socio-Economics

The Energy Research Accelerator (ERA) and the Birmingham Energy Institute have launched a policy commission to examine the state of play barriers challenges and opportunities for Energy from Waste (EfW) to form part of the regional energy circular economy in the Midlands. This policy commission explores the case for regional investment whilst helping shape the regional local government and industry thinking surrounding critical issues such as fuel poverty and poor air quality.

The Challenge

Tackling climate change is one of the most pressing issues of our time. To follow the path for limiting global warming below 2^ᵒC set out in the 2015 Paris agreement requires significant reduction in greenhouse gas emissions. The UK has committed to bring all greenhouse gas emissions to net zero by 2050 requiring action at a local regional and national level to transition to a zero carbon economy.

To decarbonise and decentralise the UK’s energy system we must implement technologies that provide energy supply solutions across the UK.

In the Midlands many industrial sites are unable to access supply of affordable clean and reliable energy to meet their demands.

Energy from Waste (EfW) could offer a solution to the Midlands based industrial sites. EfW sites provide affordable secure energy supply solutions that form part of a developing circular economy. EfW reduces our reliance on landfills and obtains the maximum value from our waste streams. There are a number of merging technologies that could potentially play an important role which treats waste as a resource properly integrated into an energy and transport system and fully respects the potential of linking in the circular economy.

Investment into EfW infrastructure in the region could lead to job creation and economic growth and could help provide inward investment needed to redevelop old industrial sites and retiring power stations. However for EfW to be part of a net-zero energy system (either in transition or long-term) technologies and processes are needed that reduce the current carbon emissions burden.

EfW could play a significant role in the net zero carbon transition in the Midlands supplying heat power and green fuels and solve other problems - the region has some of the highest levels of energy/fuel poverty and poor air quality in the UK.  The policy commission will help shape the regional local government and industry thinking surrounding this important topic.

Report Recommendations

Recovery Resource Cluster

The EfW policy commission proposes three major areas where it believes that government investment would be highly beneficial

• Building a network of local and regional Resource Recovery Clusters
• Creating a National Centre for the Circular Economy
• Launching an R&D Grand Challenge to develop small-scale circular carbon capture technologies.

The Resource Recovery Clusters (RRC) will be developed on post-industrial sites which could produce significant environmental economic and regeneration benefits. The RRCs combine a spread of EfW and recycling technologies with businesses that can consume their cheap electricity heat fuels CO₂ and material outputs.

The National Centre for the Circular Economy would analyse material flows throughout the economy down to regional and local levels and develop deep expertise in recycling and EfW technologies. The CCE would also provide expert guidance and support for local authorities as they develop local or regional strategies and planning frameworks.

The R&D Grand Challenge aims to make big advances in small-scale carbon capture technologies in order to turn 100% of CO₂ produced through the process of converting waste to energy into useful products. This is very important for areas such as the Midlands which are remoted from depleted oil and gas reservoirs.

This White Paper has been commissioned by the UK Hydrogen and Fuel Cell (H2FC) SUPERGEN Hub to examine the roles and potential benefits of hydrogen and fuel cell technologies for heat provision in future low-carbon energy systems. The H2FC SUPERGEN Hub is an inclusive network encompassing the entire UK hydrogen and fuel cells research community with around 100 UK-based academics supported by key stakeholders from industry and government. It is funded by the UK EPSRC research council as part of the RCUK Energy Programme. This paper is the first of four that will be published over the lifetime of the Hub with the others examining: (i) low-carbon energy systems (including balancing renewable intermittency); (ii) low-carbon transport systems; and (iii) the provision of secure and affordable energy supplies for the future

• Hydrogen and fuel cells are part of the cost-optimal heating technology portfolio in long-term UK energy system scenarios.
• Fuel cell CHP is already being deployed commercially around the world.
• Hydrogen can be a zero-carbon alternative to natural gas. Most technologies that use natural gas can be adapted to use hydrogen and still provide the same level of service.
• Hydrogen and fuel cell technologies avoid some of the disadvantages of other low-carbon heating technologies.

Scaling up renewables to meet the 1.5ºC climate goal

As global economies aim to become carbon neutral competitive hydrogen produced with renewables has emerged as a key component of the energy mix. Falling renewable power costs and improving electrolyser technologies could make ""green"" hydrogen cost competitive by 2030 this report finds.

Green hydrogen can help to achieve net-zero carbon dioxide (CO₂) emissions in energy-intensive hard-to-decarbonise sectors like steel chemicals long-haul transport shipping and aviation. But production costs must be cut to make it economical for countries worldwide. Green hydrogen currently costs between two and three times more than ""blue"" hydrogen which is produced using fossil fuels in combination with carbon capture and storage (CCS).

This report from the International Renewable Energy Agency (IRENA) outlines strategies to reduce electrolyser costs through continuous innovation performance improvements and upscaling from megawatt (MW) to multi-gigawatt (GW) levels.

Among the findings:

• Electrolyser design and construction: Increased module size and innovation with increased stack manufacturing have significant impacts on cost. Increasing plant size from 1 MW (typical in 2020) to 20 MW could reduce costs by over a third. Optimal system designs maximise efficiency and flexibility.
• Economies of scale: Increasing stack production with automated processes in gigawatt-scale manufacturing facilities can achieve a step-change cost reduction. Procurement of materials: Scarcity of materials can impede electrolyser cost reduction and scale-up.
• Efficiency and flexibility in operations: Power supply incurs large efficiency losses at low load limiting system flexibility from an economic perspective.
• Industrial applications: Design and operation of electrolysis systems can be optimised for specific applications in different industries. Learning rates: Based on historic cost declines for solar photovoltaics (PV) the learning rates for fuel cells and electrolysers – whereby costs fall as capacity expands – could reach values between 16% and 21%.
• Ambitious climate mitigation: An ambitious energy transition aligned with key international climate goals would drive rapid cost reduction for green hydrogen. The trajectory needed to limit global warming at 1.5oC could make electrolysers an estimated 40% cheaper by 2030.

As the UK’s largest emitter of greenhouse gases the supply of domestic industrial and commercial heat must be decarbonised if the UK is to meet its climate change targets.<br/><br/>This report publishes the outcomes from Phase 1 of the Energy Technologies Institute’s Smart Systems and Heat programme highlighting that for the UK to transition to a low carbon heating system it must understand consumer needs and behaviours while connecting this with the development and integration of technologies and new business models.<br/><br/>Written by the ETI with support from the Energy Systems Catapult this report tackles three interconnected areas: heating needs and controls within the home; heating infrastructure and building retrofit at a local level; and the operation and governance of the whole system.<br/><br/>The research also shows that as part of a low carbon heating system upgrade advanced controls are critical to performance sizing and operating costs enabling smaller appliances and lower peak electricity demands and maximising the efficiency of existing infrastructure. With significant fabric retrofits potentially required in around 10 million of the existing 28 million dwellings in the UK housing stock the report recommends that building new homes to be both very efficient and “low carbon ready” is a low regret decision which should be progressed with some urgency.

Achieving the UK's net zero target by 2050 will be a challenge. Hydrogen can make a substantial contribution but it needs investment and policy support to establish demand increase the scale of deployment and reduce costs. The Ten Point Plan for a Green Industrial Revolution confirms the government’s commitment to drive the growth of low carbon hydrogen in the UK through a range of measures. This includes publishing its hydrogen strategy and setting out revenue mechanisms to attract private investment as well as allocating further support for hydrogen production and hydrogen applications in heating.

We have created a bespoke model to help understand the cost of hydrogen in the UK across the value chain under different pathways. Our analysis highlights areas for cost reduction and identifies factors that could make hydrogen more attractive to investors.

You can read the full report on the Deloitte website at this link

Based on data collection carried out between October and December 2020 and the testing of emerging findings with the Council’s regional communities during a series of digital workshops held during February 2021 the report has shown

• Energy leaders’ perceptions of areas of risk opportunity and priorities for action have radically changed over the last 12 months. While economic turbulence stemming from the ongoing reverberations of COVID-19 is the biggest area of uncertainty with uncertainty around economic trends increasing by a third over the previous year there is also a growing focus on the social agenda associated with a faster paced energy transition.

 

• There is an increased awareness of the societal and human impact of both recovery and the wider energy transition. The issue of energy affordability has rapidly risen up the industry’s priority list with its impact and uncertainty perceived 20% larger than a year ago. Energy affordability affects society across all geographies ranging from city dwellers in developed countries to the rural poor in developing ones.

 

• The emergence of a new generation of digital energy services and energy entrepreneurs. Increasingly agile disruptive technologies have taken advantage of the social upheaval to gain market share at the expense of supply-centric energy solutions. There is a growing focus on customer-centric demand-driven solutions and fast changing patterns of global and local demand.

The Hydrogen Taskforce welcomes the opportunity to submit evidence to the Environmental Audit Committee’s inquiry into Hydrogen. It is the Taskforce’s view that:

• Due to its various applications hydrogen is critical for the UK to reach net zero by 2050;
• The UK holds world-class advantages in hydrogen production distribution and application; and
• Other economies are moving ahead in the development of this sector and the UK must respond.

The Taskforce has defined a set of policy recommendations for Government which are designed to ensure that hydrogen can scale to meet the future demands of a net zero energy system:

• Development of a cross departmental UK Hydrogen Strategy within UK Government;
• Commit £1bn of capex funding over the next spending review period to hydrogen production storage and distribution projects;
• Develop a financial support scheme for the production of hydrogen in blending industry power and transport;
• Amend Gas Safety Management Regulations (GSMR) to enable hydrogen blending and take the next steps towards 100% hydrogen heating through supporting public trials and mandating 100% hydrogen-ready boilers by 2025; and
• Commit to the support of 100 Hydrogen Refuelling Stations (HRS) by 2025 to support the roll-out of hydrogen transport.

You can download the whole document from the Hydrogen Taskforce website here 

As the world strives to cut carbon emissions electric power from renewables has emerged as a vital energy source. Yet transport and industry will still require combustible fuels for many purposes. Such needs could be met with hydrogen which itself can be produced using renewable power.



Hydrogen provides high-grade heat helping to meet a range of energy needs that would be difficult to address through direct electrification. This could make hydrogen the missing link in the transformation of the global energy system.  



Key sectors for renewable-based hydrogen uptake include:  

• Industry where it could replace fossil-based feedstocks including natural gas in high-emission applications.
• Buildings and power where it could be mixed with natural gas or combined with industrial carbon dioxide (CO2) emissions to produce syngas.
• Transport where it can provide low-carbon mobility through fuel-cell electric vehicles.  

Electrolysers – which split hydrogen and oxygen – can make power systems more flexible helping to integrate high shares of variable renewables. Power consumption for electrolysis can be adjusted to follow actual solar and wind output while producing the hydrogen needed for transport industry or injection into the gas grid.  



In the long run hydrogen could become a key element in 100% renewable energy systems. With technologies maturing actual scale-up should yield major cost reductions. The right policy and regulatory framework however remains crucial to stimulate private investment in in hydrogen production in the first place.

A method of risk identification is developed by comparing existing and advanced technologies from the viewpoint of comprehensive social risk. First to analyze these values from a multifaceted perspective we constructed a questionnaire based on 24 individual values and 26 infrastructural values determined in a previous study. Seven engineering experts and six social science experts were then asked to complete the questionnaire to compare and analyze a hydrogen energy system (HES) and a gasoline energy system (GES). Finally the responses were weighted using the analytic hierarchy process. Three important points were identified and focused upon: the distinct disadvantages of the HES compared to the GES judgments that were divided between experts in the engineering and social sciences fields and judgments that were divided among experts in the same field. These are important risks that should be evaluated when making decisions related to the implementation of advanced science and technology.

<br/>The decarbonisation of heating represents a transformative challenge for many countries. The UK’s net-zero greenhouse gas emissions target requires the removal of fossil fuel combustion from heating in just three decades. A greater understanding of policy processes linked to system transformations is expected to be of value for understanding systemic change; how policy makers perceive policy issues can impact on policy change with knock-on effects for energy system change. This article builds on the literature considering policy maker perceptions and focuses on the issue of UK heat policy. Using qualitative analysis we show that policy makers perceive heat decarbonisation as disruptive technological pathways are seen as deeply uncertain and heat decarbonisation appears to offer policy makers little ‘up-side’. Perceptions are bounded by uncertainty affected by concerns over negative impacts influenced by external influences and relate to ideas of continuity. Further research and evidence on optimal heat decarbonisation and an adaptive approach to governance could support policy makers to deliver policy commensurate with heat decarbonisation. However even with reduced uncertainty and more flexible governance the perceptions of disruption to consumers mean that transformative heat policy may remain unpopular for policy makers potentially putting greenhouse mitigation targets at risk of being missed.