 on the development, scaling and wide deployment of some form of carbon capture and storage (CCS) or carbon and utilisation and storage (CCUS) to avoid releasing CO2 to the atmosphere. A higher carbon price will certainly help in this regard. Both the capture and storage is technologically possible, yet CCS development has been slowed by political and economic barriers and the cancellation of the planned CCS Commercialisation Programme was a significant set-back to the development of CCS in the UK.
A number of other countries have begun production, but this is still embryonic. For example, Japan intends to become a ‘hydrogen society’ with plans for 40,000 hydrogen-powered cars on the road by 2020, growing to 800,000 by 2030. However, underpinning this is an agreement between the Australian Government and Japan’s Kawasaki Heavy Industries, with the partnership intending to turn Australia’s brown coal into hydrogen for use in Japan. During the trial phase, no CCS is planned. Analysis shows that the production carbon intensity using coal is over 400g/kWh which is incompatible with global emissions reduction targets. Clearly any benefits of using hydrogen are negated if production doesn’t include CCS. There is also potential for using the high temperature from nuclear Small Modular Reactors and concentrated solar to produce hydrogen through thermal chemical splitting.
Other sustainable production methods exist, notably electrolysis coupled with renewable energy and a number of schemes have been piloted. For example ITM power in the UK and their partnership with Shell in Germany.
But as Michael Liebreich (founder of Bloomberg New Energy Finance) said, while it is fashionable to posit electrolysis as the perfect way of using up surplus wind and solar power, this is probably wrong. The challenge is whether this can cost effectively scale in order to make a substantial contribution to overall hydrogen production- something that looks doubtful.
Policy Exchange is currently examining if this is possible and how public policy can facilitate its commercialisation with competitive prices, quality, reliability and security of supply.
Putting aside the beneficial role hydrogen can play in facilitating the transition to a low carbon economy, until cost effective, scalable and sustainable production methods reach mass market, the proliferation of a hydrogen economy will remain on the precipice.
A version of this blog was first published by Business Green.