Policy & Socio-Economics

Based on technical environmental economic and social facts and recent findings the feasibility of the transition from our current fossil age to the new green age is analyzed in detail at both global and local level. To avert the threats of health problems environmental pollution and climate change to our quality and standard of life a twofold radical paradigm shift is outlined: Green Energy Revolution means the complete change from fossil-based to green primary energy sources such as sun wind water environmental heat and biomass; Green Hydrogen Society means the complete change from fossil-based final energy to green electricity and green hydrogen in all areas of mobility industries households and energy services. Renewable energies offer a green future and are in combination with electrochemical machines such as electrolysers batteries and fuel cells able to achieve higher efficiencies and zero emissions.

This session concerned the political economic and environmental impact on the hydrogen economy due to hydrogen embrittlement.

This article is a transcription of the recorded discussion of ‘Political economic and environmental concerns’ at the Royal Society Scientific Discussion Meeting Challenges of Hydrogen and Metals 16–18 January 2017. The text is approved by the contributors. G.C.G.S. transcribed the session and F.F.D. assisted in the preparation of the manuscript.

Link to document download on Royal Society Website 

THIS ANNUAL SCIENCE Review showcases the high quality of science evidence and analysis that underpins HSE’s risk-based regulatory regime. To be an effective regulator HSE has to balance its approaches to informing directing advising and enforcing through a variety of activities. For this we need capacity to advance knowledge; to develop and use robust evidence and analysis; to challenge thinking; and to review effectiveness.<br/>In simple terms policy provides the route map to tackling issues. HSE is particularly well placed in terms of the three components of effective policy - “politics” “evidence” and “delivery”. Unlike most regulators and arms-length bodies HSE leads on policy development which draws directly on front line delivery expertise and intelligence; and we are also unusual in having our own world class science and insight capabilities.<br/>The challenge is to ensure we bring these components together to best effect to respond to new risk management and regulatory issues with effective innovative and proportionate approaches.<br/>Many of the articles in this Review relate to new and emerging technologies and the changing world of work and it is important to understand the risks these may pose and how they can be effectively controlled or how they themselves can contribute to improved health and safety in the workplace. Good policy development can support approaches to change that are proportionate relevant persuasive and effective. For example work described in these pages is: to help understand changing workplace exposures; to provide robust evidence to those negotiating alternatives to unduly prescriptive standards; to understand how best to influence duty<br/>holder behaviors in the changing world of work; to inform possible legislative changes to allow different modes of safe gas transmission; to change administrative processes for Appointed Doctors; and to support our position as a model modern regulator by further focusing our inspection activity where it matters most.<br/>The vital interface between HSE science and policy understand how best to influence duty holder behaviors in the changing world of work; to inform possible legislative changes to allow different modes of safe gas transmission; to change administrative processes for Appointed Doctors; and to support our position as a model modern regulator by further focusing our inspection activity where it matters most.<br/>We work well together and it is important we maintain this engagement as a conscious collaboration.

The combination of offshore wind and green hydrogen provides major opportunities for job creation economic growth and regional regeneration as well as attracting inward investment alongside delivering the emission reductions needed to achieve climate neutrality. In order to get to Net Zero emissions in 2050 the UK is likely to need a minimum of 75GW of offshore wind (OSW) and modelling of the energy system indicates that hydrogen will play a major role in integrating the high levels of OSW on the electricity grid.<br/><br/>Some of the key findings from report are listed below:<br/><br/>The UK has vast resources of offshore wind with the potential for over 600GW in UK waters and potentially up to 1000GW. This is well above the he figure of 75-100GW likely to be needed for UK electricity generation by 2050.<br/>The universities in the UK provide the underpinning science and engineering for electrolysers fuel cells and hydrogen and are home to world-leading capability in these areas.<br/>In order to achieve cost reduction and growing a significant manufacturing and export industry it will be crucial to develop green hydrogen in the next 5 years<br/>By 2050 green hydrogen can be cheaper than blue hydrogen. With accelerated deployment green hydrogen costs can be competitive with blue hydrogen by the eary 2030s.<br/>The combination of additional OSW deployment and electrolyser manufacture alone could generate over 120000 new jobs. These are are expected to be based mainly in manufacturing OSW-related activity shipping and mobility<br/>By 2050 it is estimated that the cumulative gross value added (GVA) from supply of electrolysers and additional OSW farm could be up to £320bn where the majority will come from exports of electrolysers to overseas markets.<br/>The report also calls for immediate government intervention and a new national strategy to support the creation of supply and demand in the new industry.<br/><br/>This study was jointly supported by the Offshore Wind Industry Council (OWIC) and ORE Catapult.

Study setting out a vision and plan for a multi-modal hydrogen transport hub within the UK. The study considers the:

• size of operational trials
• quantity of green hydrogen required
• research and development facilities which will support a living lab
• green hydrogen infrastructure required including:
• production
• storage
• distribution
• The study uses Tees Valley as an example region although the blueprint may be applied to other areas.

This report was independently produced on behalf of the Department for Transport by Mott Macdonald.

To limit the global temperature change to no more than 2 ◦C by reducing global emissions the European Union (EU) set up a goal of a 20% improvement on energy efficiency a 20% cut of greenhouse gas emissions and a 20% share of energy from renewable sources by 2020 (10% share of renewable energy (RE) specifically in the transport sector). By 2030 the goal is a 27% improvement in energy efficiency a 40% cut of greenhouse gas emissions and a 27% share of RE. However the integration of RE in energy system faces multiple challenges. The geographical distribution of energy supply changes significantly the availability of the primary energy source (wind solar water) and is the determining factor rather than where the consumers are. This leads to an increasing demand to match supply and demand for power. Especially intermittent RE like wind and solar power face the issue of energy production unrelated to demand (issue of excess energy production beyond demand and/or grid capacity) and forecast errors leading to an increasing demand for grid services like balancing power. Megawatt electrolyzer units (beyond 3 MW) can provide a technical solution to convert large amounts of excess electricity into hydrogen for industrial applications substitute for natural gas or the decarbonization of the mobility sector. The demonstration of successful MW electrolyzer operation providing grid services under dynamic conditions as request by the grid can broaden the opportunities of new business models that demonstrate the profitability of an electrolyzer in these market conditions. The aim of this work is the demonstration of a technical solution utilizing Pressurized Alkaline Electrolyzer (PAE) technology for providing grid balancing services and harvesting Renewable Energy Sources (RES) under realistic circumstances. In order to identify any differences between local market and grid requirements the work focused on a demonstration site located in Austria deemed as a viable business case for the operation of a largescale electrolyzer. The site is adapted to specific local conditions commonly found throughout Europe. To achieve this this study uses a market-based solution that aims at providing value-adding services and cash inflows stemming from the grid balancing services it provides. Moreover the work assesses the viability of various business cases by analyzing (qualitatively and quantitatively) additional business models (in terms of business opportunities/energy source potential grid service provision and hydrogen demand) and analyzing the value and size of the markets developing recommendations for relevant stakeholder to decrease market barriers.

Policy led decisions aiming at decarbonizing the economy may well exacerbate existing regional economic imbalances. These effects are seldomly recognised in spatially aggregated top-down and techno-economic decarbonization strategies. Here we present a spatial economic framework that quantifies the gross value added associated with low carbon hydrogen investments while accounting for region-specific factors such as the industrial specialization of regions their relative size and their economic interdependencies. In our case study which uses low carbon hydrogen produced via autothermal reforming combined with carbon capture and storage to decarbonize the energy intensive industries in Europe and in the UK we demonstrate that interregional economic interdependencies drive the overall economic benefits of the decarbonization. Policies intended to concurrently transition to net zero and address existing regional imbalances as in the case of the UK Industrial Decarbonization Challenge should take these local factors into account.

As the world prepares to exit from the COVID-19 crisis the pace of the global power revolution is expected to accelerate. A new publication from the World Energy Council in collaboration with PwC underscores the imperative for electricity grid owners and operators to fundamentally transform themselves to secure a role in a more integrated flexible and smarter electricity system in the energy transition to a low carbon future.

“Performing While Transforming: The Role of Transmission Companies in the Energy Transition” is based on in-depth interviews with CEOs and senior leaders from 37 transmission companies representing 35 countries and over 4 million kilometres – near global coverage - of the transmission network. While their roles will evolve transmission companies will remain at the heart of the electricity grid and need to balance the challenges of keeping the lights on while transforming themselves for the future.

The publication explores the various challenges affecting how transmission companies prepare and re-think their operations and business models and leverages the insights from interviewees to highlight four recommendations for transmission companies to consider in their journey:

• Focus on the future through enhanced forecasting and scenario planning  
• Shape the ecosystem by collaborating with new actors and enhancing interconnectivity
• Embrace automation and technology to optimise processes and ensure digital delivery
• Transform organisation to attract new talent and maintain social licence with consumers

Arup have conducted interviews with targeted industry and government stakeholders to gather data and perspectives to support the development of this study. Arup have also utilised private and publicly available data sources building on recent work undertaken by Geoscience Australia and Deloitte and the comprehensive stakeholder engagement process to inform our research. This study considers the supply chain and infrastructure requirements to support the development of export and domestic hubs. The study aims to provide a succinct “Hydrogen Hubs” report for presentation to the hydrogen working group.



The hydrogen supply chain infrastructure required to produce hydrogen for export and domestic hubs was identified along with feedback from the stakeholder engagement process. These infrastructure requirements can be used to determine the factors for assessing export and domestic hub opportunities. Hydrogen production pathways transportation mechanisms and uses were also further evaluated to identify how hubs can be used to balance supply and demand of hydrogen.



A preliminary list of current or anticipated locations has been developed through desktop research Arup project knowledge and the stakeholder consultation process. Over 30 potential hydrogen export locations have been identified in Australia through desktop research and the stakeholder survey and consultation process. In addition to establishing export hubs the creation of domestic demand hubs will be essential to the development of an Australian hydrogen economy. It is for this reason that a list of criteria has been developed for stakeholders to consider in the siting and design of hydrogen hubs. The key considerations explored are based on demand supply chain infrastructure and investment and policy areas.



Based on these considerations a list of criteria were developed to assess the viability of export and domestic hydrogen hubs. Criteria relevant to assessing the suitability of export and domestic hubs include:

• Health and safety provisions;
• Environmental considerations;
• Economic and social considerations;
• Land availability with appropriate zoning and buffer distances & ownership (new terminals storage solar PV industries etc.);•
• Availability of gas pipeline infrastructure;
• Availability of electricity grid connectivity backup energy supply or co-location of renewables;
• Road & rail infrastructure (site access);
• Community and environmental concerns and weather. Social licence consideration;
• Berths (berthing depth ship storage loading facilities existing LNG and/or petroleum infrastructure etc.);
• Port potential (current capacity & occupancy expandability & scalability);
• Availability of or potential for skilled workers (construction & operation);
• Availability of or potential for water (recycled & desalinated);
• Opportunity for co-location with industrial ammonia production and future industrial opportunities;
• Interest (projects priority ports state development areas politics etc.);
• Shipping distance to target market (Japan & South Korea);
• Availability of demand-based infrastructure (i.e. refuelling stations).

A framework that includes the assessment criteria has been developed to aid decision making rather than recommending specific locations that would be most appropriate for a hub. This is because there are so many dynamic factors that go into selecting a location of a hydrogen hub that it is not appropriate to be overly prescriptive or prevent stakeholders from selecting the best location themselves or from the market making decisions based on its own research and knowledge. The developed framework rather provides information and support to enable these decision-making processes.

Proposed sustainable transition pathways for moving away from natural gas in domestic heating focus on two main energy vectors: electricity and hydrogen. Electrification would be implemented by using vapourcompression heat pumps which are currently experiencing market growth in many countries. On the other hand hydrogen could substitute natural gas in boilers or be used in thermally–driven absorption heat pumps. In this paper a consistent thermodynamic and economic methodology is developed to assess the competitiveness of these options. The three technologies along with the option of district heating are for the first time compared for different weather/ambient conditions and fuel-price scenarios first from a homeowner’s and then from a wholeenergy system perspective. For the former two-dimensional decision maps are generated to identify the most cost-effective technologies for different combinations of fuel prices. It is shown that in the UK hydrogen technologies are economically favourable if hydrogen is supplied to domestic end-users at a price below half of the electricity price. Otherwise electrification and the use of conventional electric heat pumps will be preferred. From a whole-energy system perspective the total system cost per household (which accounts for upstream generation and storage as well as technology investment installation and maintenance) associated with electric heat pumps varies between 790 and 880 £/year for different scenarios making it the least-cost decarbonisation pathway. If hydrogen is produced by electrolysis the total system cost associated with hydrogen technologies is notably higher varying between 1410 and 1880 £/year. However this total system cost drops to 1150 £/year with hydrogen produced cost-effectively by methane reforming and carbon capture and storage thus reducing the gap between electricity- and hydrogen-driven technologies.