Monday, July 18, 2016

Could the UK's gas grid be converted to hydrogen?

[NOTE: An earlier version of this piece appeared on 13 July on The Fifth Estate. This version has been updated.]

 A new study claims converting the UK gas grid to carry hydrogen instead of natural gas will help to meet the UK’s carbon reduction targets and is technically feasible without much disruption to consumers. It proposes Leeds as a pilot city, but there are still major problems to be overcome before it can go ahead.

The proposal is called the H21 Leeds City Gate and the report has been produced by the North of England’s gas distributor, Northern Gas Networks, which is clearly worried by what could happen to its assets down the line, as the country reduces its greenhouse gas emissions by 80 per cent of 1990 values by 2050, which is the target.

It commissioned Kiwa Gastec, Amec Foster Wheeler, and Wales & West Utilities to assess the prospects for converting the gas network to take hydrogen instead of natural gas for cooking in heating, beginning in Leeds and eventually covering the entire UK.

The study is backed by no less than four other recent reports, all making the case for using the existing gas grid, which serves almost half the UK population, for either biogas or hydrogen or a combination.
A UK-wide conversion of the grid to hydrogen gas could, it’s claimed by H21, reduce greenhouse gas emissions associated with domestic heating and cooking – currently over 30 per cent of the UK’s total emissions – by a minimum of 73 per cent, as well as supporting decarbonisation of transport and local electricity generation.

The report argues that a hydrogen gas grid could use the existing underground natural gas pipe network, and that household appliances can be converted to run on hydrogen with far less disruption and expense than converting to renewable energy sources.

Dan Sadler, H21 project manager at Northern Gas Networks, said: “Households won’t be required to buy new appliances. The conversion process will be similar to that carried out in the 1960s and ’70s when 40 million appliances across 14 million households were converted from town gas to natural gas. We’d have special teams, working street by street to make the conversion as smooth as possible for customers with minimal impact in the homes and the highways.”

H21 says the project would be funded the same way as happened during that first conversion. This would allow the costs to be paid back over time and, alongside energy efficiency measures, would have a minimal impact on household energy bills.

Household appliances will, however, need to be upgraded or modified.

Pure hydrogen embrittles many pipeline steels causing cracking and many pipes are made of iron, but they are slowly being changed to polypropylene at a cost of around £1 billion (AU$1.75b) a year. This cost is spread across consumer bills.

NGN is proposing that Leeds, the UK’s third largest city, is used as a prototype test bed, and the conversion would take place from 2026-29. If successful, there would be a rollout across the UK, implemented at the pace required.

The government has cautiously welcomed the report as a contribution to the debate on Britain’s energy future.

John Loughhead, the chief scientific adviser at the Department for Energy and Climate Change, said: “Meeting the challenge of the Climate Change Act is a huge technical and business challenge. The H21 Leeds City Gate project has usefully explored one possible contribution to meeting this challenge. DECC, and wider UK government, are looking forward to seeing the full findings of the project in the final report.”

The Leeds proposal has received backing from local authorities and businesses including Leeds City Council, the Leeds City Region LEP and Tees Valley Unlimited LEP.

Councillor Lucinda Yeadon, Leeds City Council’s executive member for environment and sustainability, said: “Transforming Leeds into a hydrogen city would be a bold step. It could play a crucial role in how we heat and power our homes in the future alongside other sustainable energy sources.”

NGN is asking for £70-100 million to take the project to the next stage.

Big hurdles

There are several problems with NGN’s proposal besides replacing the pipes, to do with the energy content of hydrogen, and the process of obtaining it.

NGN is proposing the hydrogen be derived from North Sea natural gas with the carbon dioxide removed and placed securely back under the sea so that it doesn’t contribute to global warming.

But at present there is no proof this can work or will be cost-effective. 

Let’s look at this a little more closely.

Most hydrogen in the lithosphere is bonded to oxygen in water. Over 90 per cent of today’s hydrogen is mainly produced by a process called steam reforming, which uses fossil fuels – natural gas, oil or coal – as a source of the hydrogen. The carbon dioxide is removed and vented to the atmosphere.

Hydrogen produced from gas this way is two to three times the cost of the original fuel.

Of course, the energy content of hydrogen is less than that of the original fuel. The claimed energy efficiency for natural gas reforming is 75 per cent. Furthermore, by weight, a unit of hydrogen contains around three times more energy than natural gas or petrol:

  • Hydrogen: 33.33 kWh/kg
  • Natural gas: (82-93 per cent methane): 10.6-13.1 kWh/kg
  • Petrol: 12.0 kWh/kg
  • Methane: 13.9 kWh/kg
But natural gas is 7.857 times more dense than hydrogen, and we buy it by volume. Since natural gas carries 41.7 per cent less energy per unit of weight, you’d need to pipe to people’s homes just over three times as much volume of uncompressed hydrogen for them to get the same amount of energy, so the pipes will be under greater pressure to compensate.

Then there’s the climate change problem. The global warming potential of producing hydrogen using the steam reforming process is 13.7kg CO2-e per kg of hydrogen produced. Coal gasification, another major production method, delivers even worse emission levels.

A typical steam methane reforming hydrogen plant with a production rate of one million cubic metres of hydrogen a day produces 0.3-0.4 million standard cubic meters of CO2 a day, which is normally vented into the atmosphere.

To fully attain the benefits of using hydrogen, we must therefore either produce it from renewable energy – or capture and store somewhere the carbon dioxide removed during steam reforming – a process called carbon capture and storage. H21 is proposing the latter.

The renewables option

There are at least eight sustainable ways of producing hydrogen. Electrolysis of water is the cheapest but currently is much more expensive, around US$1500/kWh.

A comparison of photoelectrochemical (PEC) and photovoltaic-electrolytic (PV-E) ways of producing hydrogen with low CO2 and CO2-neutral energy sources indicated that base-case PEC hydrogen is not currently cost-competitive with electrolysis using electricity supplied by nuclear power or from fossil-fuels in conjunction with carbon capture and storage.

They are currently an order of magnitude greater in cost than electricity prices with no clear economic advantage to hydrogen storage as of yet.

A number of possibly cheaper technical breakthroughs are in the wings but we don’t yet know if and when they will be commercially viable.

Analysts at the US National Renewable Energy Laboratory who have looked into the feasibility of hydrogen, assume that 53kWh are required for an electrolyser to produce a kilogram of hydrogen (remember that’s 33kWh when converted), so we’d need a lot of renewable energy to create all the hydrogen to feed the grid.

It might just be more effective to send the electricity straight there and use it directly for heating and cooking.

The CCS option

The H21 proposal has been welcomed by Scottish Carbon Capture & Storage, a research partnership that includes the British Geological Survey, whose director, Stuart Haszeldine, called steam reforming with carbon capture and storage “the least cost method of generating the large amounts of hydrogen required”.

So he is right. Except that no one knows how much it will cost.

The H21 report points towards the very few existing CCS projects in the US and elsewhere – but these operate under very different conditions.

Ever since CCS was first proposed over 15 years ago, I have been sceptical that it could work. It has always been seen as a get-out-of-jail card to permit business as usual in terms of fossil fuels and energy use while seeming to tackle climate change.

Every single deadline and target to get economically viable demonstration and proof-of-concept projects off the ground has been missed in Europe.

This crucial hurdle needs to be overcome – perhaps by backing a completely different and sustainable route to making the hydrogen, or by using the carbon dioxide removed as a feedstock for fuels, chemistry and polymers.

This is called Carbon Storage and Utilisation (CCU).

CCU for the production of fuels, chemicals and materials has emerged as a possible complementary alternative to CO2 storage, but the report does not mention it. Nor do the two other reports on adapting the gas network produced last week.

"CCS is basically a non-profit technology, where every step is costly. CCU however has the potential to produce value-added products that have a market and can generate a profit." says Dr Lothar Mennicken, German Federal Ministry of Education and Research.

The report CCU in the Green Economy from The Centre for Low Carbon Futures shows CCU can be profitable with short payback times on investment.

It says: "Although only a partial solution to the CO2 problem, under some conditions using CO2 for CCU rather than storing it underground can add value as well as offsetting some of the CCS costs."

But what are the life-cycle carbon emissions of hydrogen production using SMR plus CCS/CCU?


The latest UK government estimated LCA CO2 emission figures for NG combustion are 184.45 g/kWh plus 24.83 g/kWh emitted by the supply system, totalling 209.28 g/kWh.

But this depends on the gas source: e.g., liquefying natural gas in Qatar, transporting it in refrigerated ships, transporting it in special depots, reclassifying and compressing it into the transmission system can add around another 20 g/kWh, totalling 230 g/kWh.

The carbon footprint of SMR+CCS has been evaluated as 269 g/kWh using the lowest 184.45g/kWh figure above and assuming an efficiency for the process of 68.4%. But applying this to the more accurate lifecycle figure for NG of 230 g/kWh obtains 336.26 g/kWh.

If 90% of the carbon dioxide emitted by combustion is captured by CCS or CCU this still leaves [184.45/0.687] x 0.1 + 20 + 24.83 g/kWh = 71.68g/kWh emissions of carbon dioxide equivalent gases – a not insignificant amount.

H21Leeds puts the figure higher, at 85.83g/kWh. Hardly zero carbon – so H2 generation by renewable energy + electrolysis might be a necessary option in the future.

So, for the time being H21 is an interesting dream – but we must wait to see if it can become a reality.

David Thorpe is the author of:

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Monday, July 11, 2016

UK energy and environment sectors face post-Brexit uncertainty

[note: Originally published in The Fifth Estate, on 28.6.16.]

 The UK energy market and the prospects for environmental safeguards face an uncertain future following the country’s referendum vote to leave the European Union.

One-fifth of British business leaders said they were considering moving operations abroad after the vote, according to a survey by the Institute of Directors. One in four also planned to freeze recruitment and over a third said it would cause them to cut investment.

Immediately following the announcement of the result, Greenpeace UK executive director John Sauven commented: “Many of the laws that make our drinking and bathing water safe, our air cleaner, our fishing industry more sustainable and our climate safer now hang by a thread… The climate change-denying wing of the Conservative Party will be strengthened by this vote.”

Jacob Hayler, the executive director of the Environmental Services Association, which represents the UK’s resource and waste management industry, also voiced the opinion that the result would “extend and intensify the uncertainty around both our industry and the UK more generally”.

“The danger now is that the waste and recycling sector is placed at the bottom of the government’s in-tray.”

He promised to “make the case for the circular economy within the UK”.

The effects on investment prospects are likely to be negative for these sectors. Last year the National Grid commissioned research from Vivid Economics on the impact of Brexit on the British energy sector, which concluded that investment costs would increase due to the “uncertainty arising from Brexit negotiations” at a time when the country is “undertaking a historic level of investment in energy infrastructure”.

This view was echoed following the announcement by Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management, who said that energy companies could be most exposed to the effects of a Brexit. Plans for capital intensive projects such as offshore wind and new nuclear power stations are particularly vulnerable.

Although EDF chief executive Jean-Bernard Lévy said the UK’s decision would have no impact on EDF Energy’s strategy to build Hinkley Point C – the first new nuclear power station built in the UK in almost 20 years – this was contradicted by Fiona Reilly, PwC’s global head of nuclear capital projects and infrastructure. She said the decision to leave the EU “could have a significant impact on our nuclear program”, citing “access to capital and investor confidence”, but also the need to “renegotiate our involvement in the Euratom Treaty and our 123 Agreement with the US”.

Jonathan Grant, director of PwC sustainability and climate change, called the result “a major setback for the type of collaboration needed to tackle global environmental issues like climate change”, and said “there is a risk that it could kick EU ratification of the Paris Agreement into the long grass”.

Professor Steve Cowley, chief executive of the UK Atomic Energy Authority, the country’s nuclear research agency, told the BBC that over 1000 clean energy exploration jobs may be lost. Scientific research benefits greatly from EU partnerships and funding. Researchers are afraid, he said, that £55 million (AU$99m) in annual European Commission funding would be withdrawn.

While the decision to leave will not affect the UK’s climate change goals, as they are enshrined in law at a national level under the Climate Change Act 1998, there will still be implications. The UK’s own emissions will have to be deducted from the EU’s, which count together under the United Nations Framework Convention on Climate Change (UNFCCC) and the Paris Agreement.

The deduction could impair the EU’s perceived performance since, as the UK is a relatively high performer, it helps to counteract the lesser performance of other member states. The UK will also have to submit its own Nationally Determined Contribution to the UNFCCC process, since at present all member states are covered by a single document.

Christiana Figueres, before the vote, had already said that a pro-Brexit result would mean the Paris Agreement “would require recalibration”. Following the vote, Ian Duncan, the only Conservative MEP for Scotland and the British lead MEP on the bill to revise the Emissions Trading System, resigned. In his letter he said: “It is with quite some regret that I take this step. I believe passionately in the need to address climate change.”

Whether the UK will continue to participate in the EU Emissions Trading Scheme is uncertain. European carbon prices fell over 15 per cent following the Brexit vote. If negotiations result in Britain adopting the EEA + EFTA model, then, like Norway, Lichtenstein and Iceland, it will do so. Otherwise, arrangements will have to be made to compensate those companies which hold a surplus of emission allowances under the cap and trade scheme.

Also, the country will be free of the targets set by the EU Renewable Energy Directive and the restrictions under EU state aid, which could free the government to curtail renewable energy support regimes, as long as it still kept within the Climate Change Act’s restrictions. Many right-wing politicians would like to see this Act withdrawn, however.

But any subsidies must still comply with the World Trade Organisation’s subsidy regime – which arises from the same principles as EU State aid rules.

It’s unlikely that Brexit will reprieve the death sentence hanging over the UK coal-fired power stations and many older gas plants. The law stipulating that their greenhouse gas emissions are too high to permit them to continue was the EU Industrial Emissions Directive 2010, which passed into national law. The UK Government is anyway proposing (subject to consultation) to close all unabated coal-fired power stations by 2025.

A particular area of concern is the future of Europe’s ambitious plan to liberalise and harmonise its energy market and grids, known as Energy Union. The UK Government has always pushed the European market to be more liberal. Regardless of Brexit, cooperation with the EU internal energy market will still be necessary because of the electricity interconnectors and gas flows between the British Isles and the continent.

So whatever rules the EU opts for in the Energy Union market will have to be complied with by the UK without it having been able to participate in their formulation – unless the UK succeeds in negotiating to remain a member of the bodies that write the rules, such as ACER, ENTSO-E and ENTSO-G.

Karel Beckman, editor-in-chief of Energy Post, commented that policymakers in Brussels should reconsider the Energy Union and opt “for more realistic forms of market integration”.

Energy and the environment hardly figured in the public debates during the referendum campaign. But the vote’s legacy could have a much greater impact on both.

David Thorpe is the author of:
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Politicians strive to reassure infrastructure investors following Brexit vote

[note: Originally published on The Fifth Estate, on 5.7.16.]

 The outlook for investment in housing, infrastructure and green energy projects in the UK remains uncertain following the referendum decision to leave the European Union, but politicians are now seeking to reassure industry and investors.

Over double the number of industry professionals (60 per cent vs 28 per cent) believe that Brexit will have a negative rather than positive long-term effect on the UK construction industry, with 12 per cent unsure, in an ongoing online poll among those in the UK building industry.

But looking closer, the picture becomes different for different sub-sectors and projects, with infrastructure projects, housing projects and green energy projects each facing differing challenges following the vote.

Infrastructure

The UK has plans for several big infrastructure projects, not least HS2 – a new high-speed rail link from London to the north – and Hinkley C nuclear power station, plus a number of offshore wind farms, Crossrail 2, numerous housing projects and the so-called “northern powerhouse” – a plan to rebalance the economy of Britain by investing in the North of England.

If any projects are to fall by the wayside they are likely to be HS2 and the expansion of Heathrow airport, both of which require substantial amounts of public money. Hinkley is also in serious doubt, but for quite a few additional reasons, not least the precarious nature of energy company EDF’s status and uncertainty about the technology chosen for the reactor.

Also at risk are smaller regeneration infrastructure projects (often road improvements) in England worth in total about £5.3 billion (AU$9.3b), according to the Local Government Association.

In Wales, which, unlike Scotland, London, Northern Ireland and Gibraltar, did vote Leave, the future of the £500 million (AU$882m) annual grant Wales receives from the EU is in doubt.

Welsh government’s first minister Carwyn Jones, calling Leave campaigners “clueless”, says major projects are “in difficulty” because of the Brexit vote, and there are “hundreds of vital EU-funded projects right across Wales whose future is now in the balance”. Funding had been allocated to improve main roads and build the South Wales Metro rail link, a project with a £2 billion (AU$3.5b) price tag that would have received £150 million (AU$265m) from the EU.

House building

Housebuilders suffered a big drop in share prices – an average of 18 per cent – following the referendum result, but there has been some recovery since then. Tony Williams, an analyst at Building Value, says he still expects a slowdown in building, but the underlying momentum will still be strong because of the chronic under-supply of homes in the UK. The devaluation of the pound could actually attract foreign buyers to buy bargain property, particularly in London.

As to how sustainable these homes of the future will be, UK Green Building Council policy adviser Richard Twinn pointed to the fact there is nothing in UK legislation saying it has to meet a sustainability target, except for a requirement in the Housing and Planning Act for the secretary of state to “undertake a review” of energy efficiency measures, with no actual action required by UK law.

The UK’s chief energy efficiency policy is derived from the EU’s Energy Performance of Buildings Directive, which requires all new buildings to be nearly zero-energy buildings from 2021, and may now be scrapped.

Other environmental protections at risk that derive from important European Directives protect birds and natural habitats. Developers have often found these a hindrance, but any attempt to roll back such protection will prompt vociferous opposition from environmentalists.

Green energy

The UK green energy sector last year had a market value of £16b (AU$28b) and employed around 117,000 people, according to the Renewable Energy Association. So far, no projects have been cancelled, and the sector is cautiously optimistic.

Marianne Wiinholt, chief financial officer for Denmark’s Dong Energy, which is building some of the UK’s largest offshore wind farms, says the UK’s energy policy is based on the need to replace old coal-fired power stations. She says any subsidies the UK government disburses to assist the construction of offshore wind farms are enshrined in private contracts “and will thus not be affected by the outcome of the EU vote”.

Many turbine blades for North Sea wind farms are made in Hull, on the north-east coast of England. These factories are not currently under threat, at least in the short term, says factory owner Siemens. Most of these big companies have hedging plans in place to cosset them from currency fluctuations.

Terri Wills, chief executive of the World Green Building Council, says that because the economic and environmental case for tackling climate change has in many ways already been won amongst policymakers, Brexit will make little difference.

“There is a sense that the green agenda is good for business, good for retaining amazing staff, good for us being strong corporate citizens looking to the long term and good for making sure corporations are resilient. So there is a business case for this. I think the market just wants to see that the government recognises that.”

The government has gone some way towards providing this recognition by last week adopting the 2050 emissions reduction target recommended by the Committee on Climate Change and agreeing with its damning report on its own progress, showing that it continues to be committed to the UK’s Climate Change Act and remain a leader on climate action.

Confidence building

Politicians have, in the last few days, been taking other steps to rebuild confidence in British investment plans.

Government infrastructure commissioner Sadie Morgan attempted to calm fears by saying she has “every confidence” projects will go ahead – because infrastructure spending is critical to lifting the country out of the Brexit crisis.

“As far as the [National Infrastructure Commission] is concerned, it’s business as usual,” she told a House of Commons reception for the construction industry.

“If anything is going to get us out of this hole it’s infrastructure.”

MP Conor McGinn, chair of the All Party Parliamentary Group on Construction and Urban Development, told those at the gathering that the country was entering “really challenging and unprecedented times” so it was crucial for the government to “work in partnership” with construction firms to overcome the challenges.

Chancellor George Osborne on Monday set out a five-point plan that includes a proposal to set the level of corporation tax at under 15 per cent – the lowest of any major economy – to stimulate investment including in the north of England. The decision to leave the EU potentially threatens the UK’s relationship with China, which Osborne had been at pains to build in order to attract inward investment. Osborne has said he will reassure China and other countries that Britain is still open for business.

He will be encouraged by a bounce back in the value of the top British shares index on Monday, led by mining stocks, and with the blue-chip FTSE 100 index at its highest level since August 2015, following a slump after the referendum result. The Sterling’s weakness since then has, reports investing.com, provided a cushion to the FTSE 100, “since many of the index’s international companies can benefit from a weaker pound which would help exports”.

Finally, one of the contenders for the leader of the Conservative Party, Stephen Crabb, has proposed a £100bn “Growing Britain Fund”. This would use government borrowing to fund infrastructure investment and invest in projects such as flood defences, a national fibre-optic broadband network, Crossrail 2, social housing, school buildings and new prisons.

European reaction

Further afield, the inward looking referendum result has jolted confidence around the world in the values formerly associated with not only Britain but the whole of the EU: pluralism, non-discrimination, tolerance, justice, solidarity, equality and a commitment to sustainable development and poverty eradication globally.

EU leaders who gathered in Brussels for a crisis summit last week were almost unanimous in their opinions about how the EU needs to change as a result. There can no longer be ‘business as usual”, they said. “Europe needs change.”

“Nothing would be worse than the status quo.”

But there has been no sign yet of these feelings being translated into action. The first post-Brexit vote decision made in Brussels was to bow to corporate lobbying and extend the licence of the controversial toxic herbicide glyphosate for another 18 months. This “shows the executive is failing to learn the clear lesson that the EU needs to finally start listening to its citizens again,” said Bart Staes, a Belgian Green MEP.

This was a view even felt by the Commission itself, and is a result of the complex, often remote and unaccountable way in which decisions can be made at the European level.

Until this changes, the public in many other member countries will continue to demand their own referendum, like Britain’s, putting the European project, which has brought peace, stability and prosperity to the continent for the last 50 years, under threat.

All in all, it seems that investors are going to have to live with uncertainty for some time to come.

David Thorpe is the author of:
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