Hydrogen Development Update

With a legal practice with a strong focus on energy, transport and real estate, we’re constantly on the lookout for that cross over point where things that have been fringe technology, as a result of political pressure, technological advance, or economies of scale move from the fringe to the mainstream – and we are definitely seeing that move taking place now in relation to hydrogen.

Demonstrator projects using Hydrogen as a fuel source have been around for some time, in the London 2012 Olympics for example, but there has been a rapid acceleration in the hydrogen market over the last 18 months involving:

• renewable energy developers, looking to incorporate hydrogen into their new projects;
• technology providers like the makers of hydrogen electrolysers and fuel cells;
• hydrogen producers at a commercial scale, via existing refinery and chemical production sites, together with shipping and distribution via road tankers and pipelines;
• transport, especially in the HGV, bus and rail sector; and
• academic institutions - given that there is now a lot of money pouring into research.

The excitement generally about Hydrogen is over its use as an energy vector. That is, it can be used to store or convey energy over distance until it gets to the place that it can be used. There are different methods, volumes and applications of creation, storage, transfer and reuse, - the key aspect being that once you have created the hydrogen (it doesn’t occur naturally in a form that can be used), its subsequent reuse releases no carbon dioxide, particulates or (potentially) other greenhouse gasses.

Electrolysis, putting water through an electrolysis unit and powering that unit with electricity, splits the water into hydrogen which can be stored and oxygen which vents to the atmosphere. Take that stored hydrogen and put it back through a similar electrolysis process (this time called a fuel cell) and the hydrogen will combine with oxygen from the atmosphere to produce clean water which is easily used or disposed of but critically releases electricity, in large amounts.

The production of hydrogen through electrolysis is instantaneous and effective over long and short running periods, so adapts ideally to using fluctuating excess energy particularly from, say, renewables. These have long suffered from of energy storage limitations, because say wind turbines rarely operate at exactly the level of energy production required by the grid. Often these can be producing at above the capacity needed and that excess energy is wasted.

The present answer to intermittency is to use batteries, and the market is showing that battery storage can be effective at a range of scales, but cannot expect to meet every energy storage need. Hydrogen brings a different dimension, with every gramme of hydrogen produced able to be stored indefinitely, or transported with exactly the same stored energy potential regardless of how long it is stored.

Hydrogen is a clean transport fuel. Either as a fuel that can be directly burnt to produce energy (and in doing so releasing no CO₂, although direct burn in vehicles would release some NOx) or by use in a fuel cell in a vehicle. Only a fuel cell has the energy potential to drive HGVs or trains. Batteries simply cannot do this with similar loads and ranges. With the advances that have been made in renewable energy production, transport is now the biggest CO₂ producing sector in our society and has long been recognised as hard to decarbonise - hydrogen is very definitely offering opportunities to do so.

And smaller scale commercial fleets of delivery vans and things like ambulances are well suited to Hydrogen because they operate to and from a fixed base, to which Hydrogen can be supplied in bulk, and with ranges already measured in the hundreds of miles, and refuelling as quick as conventional fuel, public authorities running such fleets (that they renew in large batches) there can be some easy wins for authorities that have declared climate emergencies doing something about it.

Shipping and air travel still mark frontiers for the technology. Both of course are very high producers of CO₂ but a successful formula for energy production versus the weight of stored fuel has not yet been cracked for commercial shipping or air travel – although shipping looks more readily able to move from burning heavy fuel oil (including using ammonia as a means of storing hydrogen in bulk) than jets will from burning kerosene (but even now designs are emerging for hydrogen fuelled commercial air travel and synthetic aviation fuel that combines hydrogen and CO₂ recovered from the atmosphere).

Hydrogen is also a clean fuel for industrial process, offering one of the soonest available means of displacing present CO₂ emissions at a large scale. This will most likely involve steam reformation of natural gas (i.e. methane) which is being proposed in a number of cluster projects (presently principally focussed on the North East and North West of England). Carbon sequestration is needed to make this net zero compliant, hence locations where putting large amounts of CO₂ into depleted oil and gas fields is a possibility.

More distantly Hydrogen could be a clean fuel for commercial buildings - by installing hydrogen fuelled combined heat and power plants, of which there are examples, but still at the demonstrator stage and limited by factors like hydrogen delivery by road to city centre locations. More immediately promising is Hydrogen as a clean fuel for domestic heating and cooking – which, together with transport, is a hard to decarbonise.

In the short term research is progressing well into introducing 20% mix of Hydrogen into the existing national gas supply network which looks to be quite feasible. Longer term to move closer to pure hydrogen burning (and zero CO₂ emission) would need a very large infrastructure investment to allow the system to cope with Hydrogen, which burns hotter and has other chemical effects to natural gas/methane.

So what opportunities and issues are we seeing?

A year ago we would have said the following will happen, but now we are well into the phase where the market (including a number of our clients) are :

• buying and selling assets that are part of Hydrogen energy generation or supply both the asset itself and the land on which it stands;
• buying and selling Hydrogen companies;
• raising finance from commercial lenders on hydrogen projects;
• being the focus of inward international investment, because the UK is definitely pioneering a lot of technology here;
• seeking planning permission for new hydrogen plant and pipelines, at varying scales, including at DCO scale;
• procuring plant and the building and commissioning of that plant;
• procuring contracts to supply public services (heavily but not exclusively transport), at City, Regional and National governmental level;
• observing environmental and health and safety legislation in relation to Hydrogen; and
• obtaining access to the electricity supply system and commissioning new grid equipment.

Want to know more?

Please look out for:

• Burges Salmon’s recent research paper on consenting hydrogen projects
• Our forthcoming podcast on water usage in hydrogen production
• Renewable UK’s “Planning for Onshore Green Hydrogen” document, due for public release shortly (for which Burges Salmon is a member of the drafting team of industry experts)

This update was written by Alex Minhinick and Patrick Robinson. Should you have any queries please do not hesitate to contact them.