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?
We are closely examining all these matters. The noble Lord makes a good point and these matters will be addressed in the hydrogen strategy, when it is published in due course.
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.