I wrote Hydrogen Boom more than three and a half years ago. I was mainly looking at the wisdom, safety and practicability (or otherwise) of using hydrogen to replace natural gas in residential and commercial buildings. It seems that (despite wasting a lot of money on the project) those in power have given up on that idea, and are concentrating on trying to force us to take up heat pumps instead. However, they haven’t given up on hydrogen as part of their net zero drive.

David Turver has just published an article with the heading “Green Hydrogen to Increase Gas Bills” and sub-heading “Green hydrogen is expensive and the Government is planning to increase your gas bill to pay for it”. I urge you to read the article for yourself, but in essence, it draws attention to the Hydrogen Allocation Rounds (HARs) that are similar to the Allocation Rounds (ARs) under the Contracts for Difference (CfD) scheme, but at much higher prices. HAR1 in December 2023 saw:

a strike price of £175/MWh (in 2012 prices) or about £244/MWh in 2024 money. By way of comparison, today’s elevated gas price is ~99p/therm or £34/MWh. Green hydrogen will cost about seven times the current UK gas price or ~23 times US gas prices. The Government gleefully announced that these projects would receive over £2bn of revenue support from the Hydrogen Production Business Model (HPBM). The 125MW of contracts awarded in HAR1 is only the tip of the iceberg though because HAR2 is aiming to support seven times that with 875MW of capacity under consideration.

This has to be paid for somehow, and the Government is now considering a Gas Shipper Obligation to fund over £2bn of revenue support from the HPBM. Read the article and weep.

However, I want to add another wrinkle to all this nonsense. Another question relates to the utility, if any, of all this in reducing a tiny fraction of the UK’s territorial greenhouse gas emissions, which are in total only 0.7% of global emissions according to the European Union’s Emissions Database for Global Atmospheric Research (EDGAR). The problem is that we can’t simply harness hydrogen without more ado. The government’s plans involve its manufacture, preferably in the form of what they like to call “green” hydrogen. Such processes themselves involve the creation of greenhouse gas emissions. How are they to be measured, in order to ensure that the use of hydrogen as part of the net zero plan makes “sense”? Why, with the thumb on the scale, of course. We have seen how the Levelised Cost of Electricity purports to show that electricity generated by renewables is cheap, by the simple expedient of ignoring many of the costs associated with its production. It seems (given how keen renewables enthusiasts are to cite the Levelised Cost of Electricity in support of their claims) that this tactic has been effective. And so it is also being rolled out when it comes to measuring the greenhouse gas emissions associated with hydrogen manufacture.

There is a UK Low Carbon Hydrogen Standard for hydrogen producers to use for greenhouse gas emissions reporting, including a calculator tool, all pursuant to The Hydrogen Production Revenue Support (Directions, Eligibility and Counterparty) Regulations 2023 (yes, really). Version 3 of the UK Low Carbon Hydrogen Standard Greenhouse Gas Emissions Methodology and Conditions of Standard Compliance was produced in December 2023, and it can be found here, if you’re interested. I warn you, though – it runs to 169 pages. That triggers another thought – it’s really quite terrifying to contemplate the cost of the time of civil servants and sundry “experts” producing stuff such as this, then monitoring it, all to produce some arcane figures relating to one small aspect of the UK’s GHG emissions. However, I digress. Finally, I arrive at the point I wanted to make, which is that when it comes to calculating the emissions associated with hydrogen production, there is once more a very heavy thumb on the scale:

5.2. The GHG emissions from the construction, manufacturing, and decommissioning of capital goods (such as production equipment, any upstream pre-processing equipment, vehicles, storage assets), business travel, employee commuting, and upstream leased assets are not within scope of the Standard.

5.3. GHG emissions associated with hydrogen processes after the Hydrogen Production Facility gate (for example, off-site Hydrogen Storage, off-site liquefaction, off-site hydrogenation into a hydrogen carrier) are not within scope of the Standard.

5.12. The total emissions allocated to Outputs of any Step in a Pathway shall be split only between the Products and Co-Products of that Step. By contrast, Waste or Residue Outputs from any Step in a Pathway shall have no emissions allocated to them.

5.13. The classification of an Output material can, therefore, have a significant impact on the Hydrogen Product GHG Emission Intensity, as Co-Product materials shall be allocated some of the emissions from the Step and previous Steps, reducing the emissions burden on the final Hydrogen Product.

Make of it all what you will. I am increasingly left thinking we are ruled by lunatics.