My Lords, the Hydrogen Advisory Council was established in July to formalise Government/industry engagement. The council and its working groups will inform the development of a UK hydrogen strategy, which will be published before COP 26 early next year. Similarly, those involved in the council and the working groups will of course play a role in its implementation. The strategy will include discussion around the costs associated with the expansion of the UK hydrogen economy and how these might be met.
I thank the Minister for his reply. Will he join me in celebrating Britain’s leading role in hydrogen technology? We are making world-first hydrogen buses in Ballymena, Falkirk and Yorkshire, and world-first hydrogen boilers in Worcester and Preston, and building the world’s first green hydrogen gigafactory in Sheffield. Does he agree that, if we are to maintain our competitive edge, our hydrogen strategy must do three things: grow supply and demand in parallel, establish regional hydrogen hubs, and start with technologies that are available now and easy to scale up, such as hydrogen buses and trains?
The noble Lord is entirely correct. He makes a very good point that this is an important new developing technology that we will want to support as much as we can. The UK is well placed to play a leading role in all the areas that he mentions, and when the hydrogen strategy is published it will take account of all those factors.
I understand that most of the hydrogen that is consumed in the UK is generated by the steam reformation of methane, whereby one molecule of methane and one of water produce three molecules of hydrogen and one of carbon monoxide, which rapidly becomes carbon dioxide. The process is therefore by no means carbon neutral. Moreover, it requires a substantial input of energy, which at present is liable to come from fossil fuels. Are the Government prepared to insist that in future the supply of hydrogen will be produced by electrolysis? Will they also take steps to ensure that there will be a regular supply of carbon-neutral electricity sufficient for the purpose? Can we be assured that the hydrogen strategy has a purpose beyond that of supplementing our dwindling supplies of natural gas?
The noble Viscount is of course referring to the different kinds of hydrogen, referred to as green and blue hydrogen. We take the view that both will be needed to meet the UK’s potential hydrogen demand by 2050. Blue hydrogen has a role to play in producing cost-effective low-carbon hydrogen at scale, but of course we will need to use carbon-capture technology along with it.
My Lords, as taxpayers we spend a lot of money paying renewable energy sources—solar, and particularly wind—not to produce when we do not need that energy. That is something we renewable energy advocates all feel slightly embarrassed about. Is this not a way to ensure that this never happens in future and that the surplus electricity generated at those peak times is used for the electrolysis method? That would ensure we were a hydrogen economy. Also, when are we going to get the energy White Paper?
My Lords, I declare my energy interests as in the register. Does my noble friend agree that hydrogen as an energy vector is an old story with an entirely new life nowadays? Has he noticed that Japan has declared its aim to be the world’s first hydrogen-based economy, safely using both green hydrogen from surplus renewable electricity, of which there is plenty, and blue hydrogen or hythane, already referred to, when mixed with natural gas? Could the very welcome new Hydrogen Advisory Council be encouraged to follow Japan closely or even rival that ambition?
The noble Lord is entirely correct that a number of other countries are developing hydrogen strategies. However, the Government believe that the UK is currently well placed and in the leading pack internationally. We are keeping pace with international developments and leading in a number of international fora on this subject.
My Lords, when around 80% of UK households have gas heating systems and these systems account for about 30% of the UK’s CO2 emissions, will the Government’s hydrogen strategy include a commitment to introduce hydrogen-ready boilers for 2025? This would not only support our net-zero targets but sustain and create thousands of jobs, since we are of course home to companies such as Worcester Bosch and Baxi, which are making world-first hydrogen boilers.
The noble Baroness is entirely correct. We are planning to publish a heat and buildings strategy in due course, setting out the immediate actions we will take. We are already working with Baxi and Worcester Bosch, the companies she mentioned, on hydrogen-ready boilers. These have been developed under a £25 million pot of funding, which BEIS provided.
Hydrogen in transport is key to unlocking its wider use across the economy; there are some relatively quick and easy wins. The renewable transport fuel obligation already exists. Have the Government progressed plans to extend the RTFO guidance to include both green and blue hydrogen as vehicle fuels, with legislative changes to encourage the supply chain necessary to deploy hydrogen bus and train fleets?
I believe that industry is very anxiously awaiting the hydrogen strategy to which the Minister refers. As other noble Lords have said, green hydrogen, which does not produce CO2, is relatively easy to make using the surplus energy we have, most of it from wind. The strategy must make great efforts in that direction.
Green hydrogen is relatively easy to make from electrolysis but it uses large amounts of electricity, so we need to work on improving the technology. However, these are all factors that we are already working on with industry in the Hydrogen Advisory Council, which will advise us on the next steps forward with the hydrogen strategy.
My Lords, I declare my interests as a former UK Energy Minister and as listed in the register. The need for a hydrogen strategy is now well overdue, as we have heard. Where is the promised £100 million low-carbon hydrogen production fund? Given that most of the new nuclear schemes have collapsed, how are the Government now going to achieve their low-carbon targets?
The noble Lord mentioned the £100 million of investment through the low-carbon hydrogen production fund. We are proceeding with that while also investing up to £121 million between 2015 and 2021 in hydrogen innovation. Yes, we are waiting for the strategy but also getting on with some of the key building blocks in advance of it.
My Lords, will the Minister give an indication of when the specific terms of reference of the Hydrogen Advisory Council will be published? Will he confirm the welcome news that low-carbon hydrogen use at scale is a central plank of our hosting of COP 26 in Glasgow next year?
My Lords, I declare my interests as in the register. Currently the major basis for hydrogen production, as other noble Lords have said, is steam methane reforming, of which CO2 is a by-product. It requires the successful deployment of CCS, which is a high risk from an engineering and commercial perspective. Does the Minister agree that a drive in research and development towards non-methane reforming sources of production needs to be a major priority?
I agree that we need to look at all available technologies for the production of hydrogen, whether blue or green, including electrolysis and other methods. It will be a key fuel for our decarbonisation efforts and we need to consider all available technologies.
My Lords, I too refer to my interests in the register. I congratulate my noble friend on the fund for innovation but can he also tell me what work is being done with the construction industry for future builds, to try to ensure that the innovation we are investing in is deployed into the new build?
We will shortly set out a heat and buildings strategy, which will take account of these factors. As I mentioned earlier, we are already working with the boiler manufacturers through a £25 million fund to see how much hydrogen we can currently inject into the system. Experiments are taking place in various parts of the country to see how we can deploy hydrogen into the domestic gas networks. Obviously, we need to work with the boiler manufacturers to ensure that that works.