Policy & Socio-Economics

This paper considers potential import routes for low-carbon and renewable hydrogen (H2) to main European markets like Germany. In particular it analyses claims made by Hydrogen Europe and subsequently picked up by the European Commission in its Hydrogen Strategy that there will be 40GW of electrolyser capacity in nearby countries providing hydrogen imports to Europe by 2030.   The analysis shows that by 2030 potential demand for H2 could be high enough to initiate some limited international hydrogen trade most likely between European countries initially rather than from outside Europe. Geographically a northern hydrogen cluster around Netherlands and NW Germany will be more significant for hydrogen demand while southern Europe is more likely to have surplus low cost renewable power generation.  The paper considers potential H2 exporters to Europe including Ukraine and North African countries (in line with the proposal from Hydrogen Europe) as well as Norway and Russia. (The research pre-dates recent political and military tensions between Russia and Ukraine which are likely to influence future development pathways).   The supply cost of hydrogen in 2030 is predicted to be in a reasonably (and perhaps surprisingly) narrow band around €3/kg from various sources and supply chains. The paper concludes that overall while imports of hydrogen to Europe are certainly possible in the longer term there are many challenges to be addressed. This conclusion supports the growing consensus that development of low carbon hydrogen certainly within Europe is likely to start within relatively local hydrogen clusters with some limited bilateral trade.

The research paper can be found on their website

This paper proposes that whilst the exact pathway to decarbonising heat in the UK is not yet clear there are a range of actions that could be taken in the next ten years to shift heat onto the right route to meet our 2050 net zero obligation. We already possess many of the skills and technologies required but there are a number of significant barriers preventing a spontaneous movement towards low carbon heat on the scale required – a starting impulse is needed.<br/><br/>Energy efficiency and low carbon heating have the potential to radically improve the quality of life of not just the poorest in our society but all residents of the United Kingdom. With the right approach the decarbonisation of heat can improve health outcomes for millions create new jobs in manufacturing and construction reduce air pollution in our cities and reduce the burden on our health service. This in addition to leading the world in mitigating the climate emergency.

HSE maintains a national network of doctors appointed doctors and approved medical examiners of divers who are appointed to deliver certain vital functions under our regulatory framework.1 Over the last year or so we have been reaching out to them and offering training and networking opportunities so that we can learn from each other. Their intelligence from real workplaces helps ensure that our medical approach is grounded by what actually happens and this helped us ensure that our health and work strategy took account of their views. I think that it is increasingly important to share our approaches and our  research outcomes on the global stage in an attempt to learn from other researchers around the world. A good example is the work described in this report on the artificial stone issue. I have been lucky enough to work with the Australian research group who identified an epidemic of silicosis from this exposure in their country and helped to facilitate some cross-comparison of materials with our hygienists and measurement scientists. The dialogue continues and I hope that by doing so we can help to prevent such an epidemic from occurring in the UK.<br/>All HSE research findings are published as soon as we are able to do this and this demonstrates both my and Andrew Curran’s commitment to ensure that we publish the evidence we generate to make workplaces healthier for all.

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.

With government legislating for net-zero by 2050 what does this mean for UK energy markets and business models?<br/>Getting to net-zero will require economy-wide changes that extend well beyond the energy system leading to rapid and unprecedented change in all aspects of society.<br/>This report shines a light on the level of disruption that could be required by some sectors to meet net-zero targets. With many businesses making strong commitments to a net-zero carbon future the report highlights the stark future facing specific sectors. Some will need to make fundamental change to their business models and operating practices whilst others could be required to phase out core assets. Government may need to play a role in purposefully disrupting specific sectors to ensure the move away from high carbon business models facilitating the transition a zero-carbon economy. Sector specific impactsThe in-depth analysis presented in ‘Disrupting the UK energy systems: causes impacts and policy implications’ focuses on four key areas of the economy highlighting how they may need to change to remain competitive and meet future carbon targets.<br/>Heat: All approaches for heat decarbonisation are potentially disruptive with policymakers favouring those that are less disruptive to consumers. Since it is unlikely that rapid deployment of low carbon heating will be driven by consumers or the energy industry significant policy and governance interventions will be needed to drive the sustainable heat transformation.<br/>Transport: Following the ‘Road to Zero’ pathway for road transport is unlikely to be disruptive but it is not enough to meet our climate change targets. The stricter targets for phasing out conventional vehicles that will be required will lead to some disruption. Vehicle manufacturers the maintenance and repair sector and the Treasury may all feel the strain.<br/>Electricity: Strategies of the Big 6 energy companies have changed considerably in recent years with varying degrees of disruption to their traditional business model. It remains to be seen whether they will be able to continue to adapt to rapid change – or be overtaken by new entrants.<br/>Construction: To deliver low-carbon building performance will require disruptive changes to the way the construction sector operates. With new-build accounting for less than 1% of the total stock major reductions in energy demand will need to come through retrofit of existing buildings.<br/>The report identifies how policy makers plan for disruptions to existing systems. With the right tools and with a flexible and adaptive approach to policy implementation decision makers can better respond to unexpected consequences and ensure delivery of key policy objectives.

Britain stands on the cusp of a world-leading hydrogen revolution and one which we are almost uniquely positioned to take advantage of. With an extensive world-leading gas grid huge amounts of offshore wind resource and liquid energy markets there are few other places as well positioned as the UK to lead the international race to build a hydrogen economy. Published as part of Energy Networks Association’s Gas Goes Green programme Britain’s Hydrogen Network Plan will play a vital role in delivering the UK’s ambitions for hydrogen as set out in the Prime Minister’s Ten Point Plan For A Green Industrial Revolution.<br/>This Plan sets out how Britain’s gas network companies will enable 100% hydrogen to be transported for use in different sectors of the UK economy. It also identifies the wider actions needed to provide hydrogen production and storage showing how transitioning the gas networks to hydrogen will allow hydrogen to play a full role in achieving net zero in the hard to decarbonise sectors such as industry heavy transport and domestic heating saving an estimated 40 million tonnes of CO2 emissions every year. All five of Britain’s gas network companies responsible for owning and operating £24bn of critical national energy infrastructure are committing through this Plan to delivering this work. It forms a key part of their ambition to building the world’s first zero carbon gas grid here in the UK.<br/>Britain’s Hydrogen Network Plan is founded on four tenets that will underpin the role of Britain’s gas network infrastructure in a hydrogen economy. These tenets reflect the breadth and scale of the impact that the transformation of our gas networks will have. They will guide how gas network companies ensure people’s safety in a fast moving and changing energy system. They reflect how the companies will maintain security of supply to our homes and businesses as we move away from the natural gas that has been the bedrock of our energy system for half a century. They will support the public’s ability to choose the right technology so households and businesses can choose the low carbon technologies that are best suited to their needs. And they will deliver jobs and investment so the transition of our gas networks has a lasting and enduring economic impact in communities across the country.<br/>As we look to the future the exciting role that hydrogen has to play in delivering a net zero economy is becoming increasingly clear. We look forward to working closely with the customers we serve the Government and the wider energy industry to turn that ambition into reality.

The appetite for a ‘hydrogen market’ has been growing in the past year or two and is often called a ‘market’ by governments regulators and other energy industry players. The question is what ‘hydrogen market’ are they referring to as there is currently no such market established? In this podcast David Ledesma talks to Patrick Heather Senior Research Fellow at the OIES and discusses how a future traded hydrogen market might develop what the prerequisites would be for the development of a wholesale market and whether there are lessons to be learned from the development of the European natural gas market. The podcast ends up by asking the fundamental question – If the European gas market took 25-30 years to liberalise and develop a liquid traded pricing hub where are we headed with hydrogen? Will we ever see a traded market in hydrogen and what must happen to get there? Patrick is cautiously optimistic in his response!

The podcast can be found on their website

An energy system centred on renewable energy can help resolve many of Africa’s social economic health and environmental challenges. A profound energy transition is not only feasible it is essential for a climate-safe future in which sustainable development prerogatives are met. Renewables are key to overcoming energy poverty providing needed energy services without damaging human health or ecosystems and enabling a transformation of economies in support of development and industrialisation.

Africa is extraordinarily diverse and no single approach will advance its energy future. But efforts must be made to build modern resilient and sustainable energy systems across the continent to avoid trapping economies and societies in increasingly obsolete energy systems that burden them with stranded assets and limited economic prospects.

This report from the International Renewable Energy Agency (IRENA) sets out the opportunities at hand while also acknowledging the challenges Africa faces. It lays out a pathway to a renewables-based energy system and shows that the transition promises substantial gains in GDP employment and human welfare in each region of the continent.

Among the findings:

A large part of Africa has so far been left out of the energy transition:

• Only 2% of global investments in renewable energy in the last two decades were made in Africa with significant regional disparities
• Less than 3% of global renewables jobs are in Africa
• In Sub-Saharan Africa electrification rate was static at 46% in 2019 with 906 million people still lacking access to clean cooking fuels and technologies

But the continent has enormous potential:

• Africa has vast resource potential in wind solar hydro and geothermal energy and falling costs are increasingly bringing renewables within reach
• Central and Southern Africa have abundant mineral resources essential to the production of electric batteries wind turbines and other low-carbon technologies

The last decade has seen progress:

• Renewable energy deployment has grown in the last decade with more than 26 GW of renewables-based generation capacity added. The largest additions were in solar energy
• Average annual investments in renewable energy grew ten-fold from less than USD 0.5 billion in the 2000-2009 period to USD 5 billion in 2010-2020
• Distributed renewable energy solutions including stand-alone systems and mini-grids are playing a steadily growing role in expanding electricity access in off-grid areas and strengthening supply in already connected areas

Despite the difficult shift away from carbon-intensive energy sources the energy transition – when accompanied by an appropriate policy basket – holds huge promise for Africa:

• The energy transition under IRENA’s 1.5°C Scenario pathway predicts 6.4% higher GDP 3.5% higher economy-wide jobs and a 25.4% higher welfare index than that realised under current plans on average up to 2050
• Jobs created in the renewable energy transition will outweigh those lost by moving away from traditional energy. Every million U.S. dollars invested in renewables between 2020 – 2050 would create at least 26 job-years; for every million invested in energy efficiency at least 22 job-years would be created annually; for energy flexibility the figure is 18

For these benefits to materialise the following will be required:

• A comprehensive policy package that combines the pursuit of climate and environmental goals; economic development and jobs creation; and social equity and welfare for society as a whole
• Strong institutions international co-operation (including South- South co-operation) and considerable co-ordination at the regional level

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.

In a report co-authored by Columbia University’s Centre on Global Energy Policy (CGEP) and the Global CCS Institute titled ‘Net Zero and Geospheric Return: Actions today for 2030’ findings reveal that climate finance policies and the development of carbon dioxide removal technologies need to grow rapidly within the next 10 years in order to curb climate change and hit net-zero targets.

The report unveils key climate actions required to avoid climate catastrophe:

With 2020 set to close the hottest decade on record CO2 emissions need to drop by 50% to achieve net-zero climate goals by 2030 The rapid deployment of climate mitigating infrastructure needs to occur including the expansion of CO2 pipelines from the current 8000 km to 43000 km by 2030 Clear climate polices which reduce the financial and regulatory risk of CO2 capture and storage and increase CO2 storage options need to be quickly developed and implemented.

Link to document on Global CCS Institute Website