A lot of hot air?

Part 1 of the economic case into Hydrogen

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This piece follows on from Winter is coming. We know what’s coming with it, which aimed to solve the issue of high energy prices in the winter. I teased the use of Gas or Hydrogen storage, as a way of alleviating the issue of spiking energy prices in the winter months. I’ve deliberately made them interchangeable. The industry itself is doing so.

Take Centrica who own ROUGH, the largest UK gas storage facility. They are pitching for £2bn of investment to:

“repurpose the Rough field into the world’s biggest methane and hydrogen storage facility, bolstering the UK’s energy security, delivering a net zero electricity system by 2035”1

The problem is, unless you can understand the detail of hydrogen energy generation, it’s hard to evaluate properly which solution is best. I’m therefore taking a step back and going bottom up on hydrogen.

The elephant in the room

Let’s tackle a key point of contention here. Clearly as we move towards net zero, the gas networks are going to try and push hydrogen. It gives a purpose to all the existing gas infrastructure. If we go fully electric (heat pumps et al), clearly all that infrastructure would become redundant, at the loss of jobs and earnings to those invested in it. That means their incentives are skewed, but frankly having rational self-interested parties is not the end of the world, as long as we can make an informed decision ourselves.

The key is having the ability to scrutinise all solutions effectively. Price to the consumer should be the primary constraint (assuming safety concerns are met). Think of it like a VHS vs Betamax issue (apologies if you are under 30, think of Blu ray vs HD DVD or Netflix vs Disney+). There are obviously vested interests both sides, but if consumers can see the facts, they can make a rational decision. With VHS, lower cost and longer record times meant it was the optimal solution, even if the picture quality of Betamax was slightly better. Economics won out.

For fear of being a broken record, this is the whole point of doing these pieces. By shining a light on the economics, people can make an informed decision. Most of the time though, this critical point is missed, and the debate gets bogged down in rhetoric and who can lobby the noisiest.

Last week’s debate in Westminster was a case in point of this. Labour politicians shouting about low CFD strikes for renewables (which as we know is a falsehood given no one activates the contract until CPI moves the strike high enough). Conservatives shouting about higher energy prices as renewables usage goes up. Neither side though was giving a full picture, leaving Joe public to decide which side to take from incomplete information and then turn that vitriol on each other. That does not lend itself to making the right decision.

So, let’s do a proper deep dive into hydrogen, then we can bring it back to the question of how to solve the issue of high energy prices in the winter.

Key Differences between Natural Gas and Methane

1. Hydrogen combustion doesn’t create C02. It is a clean alternative in that regard.

2. Hydrogen burns hotter-called adiabatic flame temperature it is 2204 degrees Celsius for Hydrogen and 1962 for methane.

3. Flame Speed-Hydrogen burns 10x quicker than methane.

4. Hydrogen is a lot less dense- delving into our science books, Methane (CH4) vs Hydrogen (H2) means hydrogen is a lot less dense as the chemical structure is simpler and lighter.

5. Hydrogen has a wider flammability range, meaning it combusts at a wider mix of air vs methane (4-75% vs methane at 7-20%)

Things that make you go boooom

There are some key issues to unpack. 2), 3) and 5) mean it is harder to control so you need to offset the safety concerns from using hydrogen. Although it’s slightly alarmist to use as the example, people know of the Hindenburg disaster. This is the extra risk you need to account for when using hydrogen. I take as read that safety issues can be addressed, but there are lots of voices that contest this. For a start you can’t make hydrogen smell like you can with natural gas. Hydrogen leaks are a massive safety concern that haven’t been truly solved yet.

A good set of pipes

The 4^th point means some overhaul of the existing gas network. Michael and Philip Sargent wrote this piece, which I’ve summarised:

“Existing steel pipes designed to transport natural gas at high pressures cannot be used to transport hydrogen because the high-strength steel is susceptible to embrittlement. It would be necessary to construct a new hydrogen transmission network using a softer steel to transport hydrogen around the country.2”

You have to replace the steel pipes to avoid Hydrogen accelerated fatigue cracking (HAFC). Next:

“Low pressure Polyethylene (Plastic) pipes are more porous to hydrogen than natural gas so the quantity of gas escaping through the pipeline walls would be higher following conversion… Calculations have suggested volumetric hydrogen leakage of less than 0.001% of the total annual transported volume, although this figure would have to be assessed for the UK gas network. Such small leakage rates would have negligible economic consequences… Polyethylene pipes are suitable for transporting hydrogen at low pressures”

Some good news there then. They go on to estimate the cost of retrofitting as follows:

“Currently around 22.6 million households use gas in the UK. The total cost of conversion would be £5bn for the first scenario and £11bn for the second scenario if all households were converted.”

That’s a cost of between £167 and £368 per household. Assuming that’s a one off, this doesn’t look like such a bad solution vs a potential £12k hit every 20y by owning a heat pump.

What’s the catch?

Global Warming

There’s the awkward fact of Hydrogen burning potentially making Global warming worse. This piece in Energy Science and Engineering highlights the issue, which I’ve summarised:

“For CH₄, the main sink of emissions is atmospheric oxidation…that on average takes about a decade, leading to the formation of the GHGs tropospheric ozone, stratospheric water vapor, and carbon dioxide. For H₂, ~70% is taken up by microbial communities in the soil and the remaining ~30% take about 2 years to be oxidized by the hydroxyl radical … An additional warming effect from H₂ emitted…is that less hydroxyl is available to react with CH₄, thereby increasing its residence time in the atmosphere. Consequently, current assessments of hydrogen's global warming potential suggest that H₂ can cause around ~12 times more warming than carbon dioxide (CO₂) over a 100-year period following emissions of equal mass, and ~37 times more warming over a 20-year period.”3

This could be a classic case of solving for one thing but then not including the unintended consequences. If the government mandates C02 as the benchmark then hydrogen makes sense as an option, but surely someone should be checking urgently if the results of this paper are true or not, otherwise we could be accelerating our demise rather than alleviating it.

Chemistry bites back

The tricky issue of hydrogen’s density. Now to be clear, the second piece quoted above mandates reducing load to stop leakage (contrasting with the first piece). However, ignoring that momentarily they go on to make this fundamental point:

“Switching the gas system to pure H₂, with an energy density per unit volume roughly one-third that of a typical pipeline gas; therefore, would result in a reduction in “line pack” storage to one-third of the present value if storage pressure and volume are kept constant.”4

You need approximately 3 times the volume of hydrogen as compared to natural gas to get the same amount of energy. So, to get the same “bang for your buck” out of hydrogen, you either need to increase the pressure or increase the volumetric flow of hydrogen.

Think of it like your candle only burning a third as bright unless we upgrade our current gas infrastructure. Clearly you can’t increase the pressure, that would increase the leakage. If you upgrade the volumetric flow, that £167-£368 per household goes out the window as that’s a much bigger upgrade of the pipes than envisaged as you must upgrade EVERY HOUSEHOLD’S PIPES.

The punchline

If you switch to hydrogen, given the issues with leakage, you would have to run the gas network with at best the same pressure, ergo you would have to run your boiler for 3 times as long to generate the same amount of heat energy. A quick heat boost in winter goes out the window, you’d likely have to keep you central heating permanently to keep your home at the right temperature.

Hang on! The whole point of this was to look at storage options

This is the awkward truth. Unless you pressurise it, you will only be able to store and burn a third as much hydrogen as you would methane. If we just replaced methane with hydrogen, our winter issues would become worse not better. So clearly you would need to massively boost the hydrogen storage capability for this to work. This is not costless, and indeed any solution incorporating hydrogen would have to bake in the cost of tripling the storage relative to any natural gas solution.¹

The marginal cost of everything

A lot of the above is qualitative and behavioural and a bit different to the usual analysis I do. I thought it was necessary however, rather than doing a data dump without explanation. So let’s bring things back to the primary focus.

The argument against heat pumps is not that you must run it for longer, it’s more that it costs you a lot of money.

We haven’t even considered the running costs yet. This is the most crucial point and is explored in Part 2.

www.marginalcostofeverything.co.uk is now live and is the main portal for MCOE Consultancy services. If you or your firm are looking for advice on how to optimise your energy mix, ensure energy security for your firm, or looking for policy advice at a higher level that is devoid of the absolutism of rhetoric and rooted in pragmatism. Please reach out.

1. I’m avoiding doing this analysis for the simple reason that there are bigger fish to fry in Part 2 that make this analysis redundant.