Policy & Socio-Economics

<br/>Our industry is beginning its journey on the transition to providing the world with sufficient sustainable affordable and low emission energy.<br/><br/>Decarbonisation is now a key priority. Steps range from reducing emissions from traditional oil and gas operations to investing in renewable energy and supplementing natural gas supplies with greener gasses such as hydrogen.<br/><br/>This paper looks at the role hydrogen could play in decarbonisation.

In an integrated energy system hydrogen can support the decarbonisation of industry transport power generation and buildings across Europe. The EU Hydrogen Strategy addresses how to transform this potential into reality through investments regulation market creation and research and innovation.

Hydrogen can power sectors that are not suitable for electrification and provide storage to balance variable renewable energy flows but this can only be achieved with coordinated action between the public and private sector at EU level. The priority is to develop renewable hydrogen produced using mainly wind and solar energy. However in the short and medium term other forms of low-carbon hydrogen are needed to rapidly reduce emissions and support the development of a viable market.

This gradual transition will require a phased approach:

• From 2020 to 2024 we will support the installation of at least 6 gigawatts of renewable hydrogen electrolysers in the EU and the production of up to one million tonnes of renewable hydrogen.
• From 2025 to 2030 hydrogen needs to become an intrinsic part of our integrated energy system with at least 40 gigawatts of renewable hydrogen electrolysers and the production of up to ten million tonnes of renewable hydrogen in the EU.
• From 2030 to 2050 renewable hydrogen technologies should reach maturity and be deployed at large scale across all hard-to-decarbonise sectors.
• To help deliver on this Strategy the Commission is launched the European Clean Hydrogen Alliance with industry leaders civil society national and regional ministers and the European Investment Bank. The Alliance will build up an investment pipeline for scaled-up production and will support demand for clean hydrogen in the EU.

To target support at the cleanest available technologies the Commission will work to introduce common standards terminology and certification based on life-cycle carbon emissions anchored in existing climate and energy legislation and in line with the EU taxonomy for sustainable investments. The Commission will propose policy and regulatory measures to create investor certainty facilitate the uptake of hydrogen promote the necessary infrastructure and logistical networks adapt infrastructure planning tools and support investments in particular through the Next Generation EU recovery plan.

Although the UK has done a great job of decarbonising electricity generation to get to net zero we need to tackle harder-to-decarbonise sectors like heat transport and industry. Decarbonised gas – biogases hydrogen and the deployment of carbon capture usage and storage (CCUS) – can make our manufacturing more sustainable minimise disruption to families and deliver negative emissions.

This report Accelerating innovation towards net zero commissioned by the Aldersgate Group and co-authored with Vivid Economics identifies out how the government can achieve a net zero target cost-effectively in a way that enables the UK to capture competitive advantages.

The unique contribution of this report is to identify the lessons from successful and more rapid historical innovations and apply them to the challenge of meeting net zero emissions in the UK.

Achieving net zero emissions is likely to require accelerated innovation across research demonstration and early deployment of low carbon technologies. Researchers analysed five international case studies of relatively rapid innovations to draw key lessons for government on the conditions needed to move from a typical multi-decadal cycle to one that will deliver net zero emissions by mid-Century.

The case studies include:

• The deployment of the ATM network and cash cards across the UK
• Roll out of a gas network and central heating in the UK
• The development of wind turbines in Denmark and then the UK
• Moving from late-stage adoption of steel technology in South Korea to being the world leading exporter; and
• The slower than expected development of commercial-scale CCUS to date across the world.

The report also sets out which low carbon technologies are likely to have wider productivty and growth benefits in other industries for the UK. These include carbon capture use and storage (CCUS); heating ventilation and air conditioning (HVAC); wind energy; biofuels and batteries. These areas should be prioritised by the government’s innovation strategy going forwards.

Six key actions for government policy to accelerate low carbon innovation in the UK:

• Increase ambition in demonstrating complex and high capital cost technologies and systems.
• Create new markets to catalyse early deployment and move towards widespread commercialisation.
• Use concurrent innovations such as digital technologies to improve system efficiency and make new products more accessible and attractive to customers.
• Use existing or new organisations (cross-industry associations or public-private collaborations) to accelerate innovation in critical areas and coordinate early stage deployment.
• Harness trusted voices to build consumer acceptance through information sharing and rapid responses to concerns.
• Align innovation policy in such a way that it strengthens the UK’s industrial advantages and increases knowledge spillovers between businesses and sectors.

Implementing these lessons will require a further increase in government support for innovation – through both research development and demonstration and through deployment policies to create new markets.

Fossil fuels and materials on Earth are a finite resource and the disposal of waste into the air on land and into water has an impact on our environment on a global level. Using Switzerland as an example the energy demand and the technical challenges and the economic feasibility of a transition to an energy economy based entirely on renewable energy were analyzed. Three approaches for the complete substitution of fossil fuels with renewable energy from photovoltaics called energy systems (ES) were considered i.e. a purely electric system with battery storage (ELC) hydrogen (HYS) and synthetic hydrocarbons (HCR). ELC is the most energy efficient solution; however it requires seasonal electricity storage to meet year-round energy needs. Meeting this need through batteries has a significant capital cost and is not feasible at current rates of battery production and expanding pumped hydropower to the extent necessary will have a big impact on the environment. The HYS allows underground hydrogen storage to balance seasonal demand but requires building of a hydrogen infrastructure and applications working with hydrogen. Finally the HCR requires the largest photovoltaic (PV) field but the infrastructure and the applications already exist. The model for Switzerland can be applied to other countries adapting the solar irradiation the energy demand and the storage options.

In recent years there has been an increased interest in hydrogen energy due to a desire to reduce greenhouse gas emissions by utilizing hydrogen for numerous applications. Some countries (e.g. Japan Iceland and parts of Europe) have made great strides in the advancement of hydrogen generation and utilization. However in the United States there remains significant reservation and public uncertainty on the use and integration of hydrogen into the energy ecosystem. Massachusetts similar to many other states and small countries faces technical infrastructure policy safety and acceptance challenges with regards to hydrogen production and utilization. A hydrogen economy has the potential to provide economic benefits a reduction in greenhouse gas emissions and sector coupling to provide a resilient energy grid. In this paper the issues associated with integrating hydrogen into Massachusetts and other similar states or regions are studied to determine which hydrogen applications have the most potential understand the technical and integration challenges and identify how a hydrogen energy economy may be beneficial. Additionally hydrogen’s safety concerns and possible contribution to greenhouse gas emissions are also reviewed. Ultimately a set of eight recommendations is made to guide the Commonwealth’s consideration of hydrogen as a key component of its policies on carbon emissions and energy.

The effort to meet the ambitious targets of the Paris agreement is challenging many governments. The US and UK governments might have different approaches to achieving the targets but both will rely heavily on renewable energy sources such as wind and solar to power their economies. However these sources of power are unpredictable and ways will have to be developed to store renewable energy for hours days weeks seasons and maybe even years before it is used. As the disruptive and increasingly deadly impacts of climate change are being felt across the world the need to move to more sustainable sources of energy and to identify viable ways to store that energy has never been more important.<br/>This was the subject of the US–UK Science Forum on electrical storage in support of the grid which was held online from 17 – 18 March 2021. Co-organised by the Royal Society and the National Academy of Sciences it brought together a diverse group of 60 scientists policy makers industry leaders regulators and other key stakeholders for a wide-ranging discussion on all aspects of energy storage from the latest research in the field to the current status of deployment. It also considered the current national and international economic and policy contexts in which these developments are taking place. A number of key points emerged from the discussion. First it is clear that renewable energy will play an increasingly important role in the US and UK energy systems of the future and energy storage at a multi-terawatt hour scale has a vital role to play. Of course this will evolve differently to some extent in both countries and elsewhere according to the various geographical technological economic political social and regulatory environments. Second international collaboration is critical – no single nation will solve this problem alone. As two of the world’s leading scientific nations largest economies and per capita CO2 emitters with a long track record of collaboration the US and UK are well placed to play a vital role in addressing this critical challenge. As the discussion highlighted a wide range of energy storage technologies are now emerging and becoming increasingly available many of which have the potential to be critical components of a future net-zero energy system. A crucial next phase is in ensuring that these are technically developed as well as economically and political viable. This will require the support of a wide range of these potential solutions to ensure that their benefits remain widely available and to avoid costly ‘lock-in’. Scientists and science academies have a critical role to play in analysing technology options their combinations and their potential roles in future sustainable energy systems and in working with policymakers to incentivise investment and deployment.

In recent decades governments and society have been making increasing efforts to address and mitigate climate change by reducing emissions and decarbonising energy generation. Ireland has invested greatly in renewable electricity installing 4 GW of wind capacity since 2002 and has set assertive energy targets such as the aim to reduce overall emissions by 51% by 2030. Nonetheless considerable acceleration is needed in the decarbonisation of the country’s energy sector. This paper investigates the potential role hydrogen can play in Ireland’s energy transition proposing hydrogen as an energy vector and storage medium that may help the country achieve its targets and reduce greenhouse gas emissions. Through literature review research and from industry insights the current state of the Irish energy sector is analysed and recommendations are made as to how where and when hydrogen can be integrated into the decarbonisation of Ireland’s electricity heating and transport. It is concluded that; with significant effort from the government policymakers industry and organisations; the effective deployment of hydrogen technologies in Ireland could avoid up to 6.1 MtCO2eq of emissions annually reflecting a trend observed in many other developed countries in which hydrogen plays an important part in the path to a low-carbon future. Prospective roles for hydrogen in Ireland include renewable energy storage and grid balancing through the deployment of Power-to-Gas systems a replacement for fossil natural gas in the gas grid for backup electricity production as well as industry and heating requirements and the use of hydrogen as a fuel for heavy transport.

This paper presents an eco-technoeconomic analysis (eTEA) of hydrogen production via solid oxide electrolysis cells (SOECs) aimed at identifying the economically optimal size and operating trajectories for these cells. Notably degradation effects were accounted by employing a data-driven degradationbased model previously developed by our group for the analysis of SOECs. This model enabled the identification of the optimal trajectories under which SOECs can be economically operated over extended periods of time with reduced degradation rate. The findings indicated that the levelized cost of hydrogen (LCOH) produced by SOECs (ranging from 2.78 to 11.67 $/kg H2) is higher compared to gray hydrogen generated via steam methane reforming (SMR) (varying from 1.03 to 2.16 $ per kg H2) which is currently the dominant commercial process for large-scale hydrogen production. Additionally SOECs generally had lower life cycle CO2 emissions per kilogram of produced hydrogen (from 1.62 to 3.6 kg CO2 per kg H2) compared to SMR (10.72–15.86 kg CO2 per kg H2). However SOEC life cycle CO2 emissions are highly dependent on the CO2 emissions produced by its power source as SOECs powered by high-CO2-emission sources can produce as much as 32.22 kg CO2 per kg H2. Finally the findings of a sensitivity analysis indicated that the price of electricity has a greater influence on the LCOH than the capital cost.

The UK Hydrogen Champion engaged with stakeholders across the hydrogen value chain between July and December 2022.<br/>This report summarises their findings and makes recommendations for government and industry to accelerate the growth of the hydrogen sector.