Heating homes with hydrogen fails on economic and climate merit: report

The use of hydrogen in boilers may just fall short of both the EU's climate targets and unduly hurt consumer's wallets, warns think-tank Agora Energiewende. Image credit: Shutterstock/Borkin Vadim

As homeowners across Europe worry about the fate of their ageing gas boilers, some have pinned their hopes on switching them to hydrogen – but this may not be the way forward, a new study suggests.

The new ’12 Insights on Hydrogen’ report published by German think-tank Agora Energiewende gives a closer look at the “enormous hype” around hydrogen over past two years and tries to determine whether it is here to stay.

“The role of hydrogen for climate neutrality is crucial but secondary to direct electrification,” write the authors, who forecast that hydrogen will account for 16-25% of final energy demand in Europe by 2050.

For homeowners who are reluctant to ditch their gas boilers, the report carries some bad news. “We don’t see a role for Hydrogen in building-level heating through boilers or fuel cells,” says Gniewomir Flis, hydrogen expert at Agora Energiewende and one of the authors of the report.

“Net-zero scenarios see very limited use of hydrogen in buildings,” Flis explained.

Supporters of hydrogen say existing gas networks can carry up to 20% hydrogen without the need for costly revamp. Provided the hydrogen is low-carbon, this would offer immediate greenhouse gas emission reductions, they argue.

Hydrogen blending with gas can be especially cost-effective in European regions with available gas infrastructure networks, which can be easily repurposed to hydrogen in the short-term, said an industry coalition.

This view is also backed by EU climate chief Frans Timmermans. “The more we can have dual use of infrastructure, the better it is – also to make the transition to green hydrogen affordable in the future,” he said in remarks made last year.

Industry coalition calls for hydrogen blending into gas

More than 90 energy companies, equipment manufacturers and gas network operators have called on the European Commission to consider hydrogen blending into natural gas for parts of Europe that cannot yet afford a dedicated hydrogen network.

Opponents however call hydrogen blending with gas “a Trojan Horse that would keep our heating running on fossil gas, while consumers pick up the tab,” said Juliet Philips, UK hydrogen expert at climate think-tank E3G.

For Flis and report co-author Matthias Deutsch, the issue is more related to the economic and financial aspects.

“There is no credible financing strategy for hydrogen use in households,” they remark.

Unlike industrial sectors like steelmaking or chemicals, which have few other options to decarbonise, home heating running on hydrogen would compete with other technologies like heat pumps and district heating networks, which are more mature, the authors point out.

In addition, the greenhouse gas savings are not worth the cost, they argue. Merely blending renewable hydrogen into the gas grid, would “raise the price of delivered gas by around 33% but reduce emissions only by 7%,” the report says.

While most experts expect renewable hydrogen production costs to fall at around €1.5 per kg, the actual costs for households would be much higher than for industry or other large-scale consumers, the authors contend.

For instance, burning hydrogen instead of gas in home heating appliances would require retrofitting gas pipelines and “a tripling of the wholesale gas price” as hydrogen would continue to be more expensive than gas, the report says.

Transmissions, storage and distribution costs would double the price for hydrogen use in households, even in the case cheap renewable hydrogen can be imported from places like Morocco, the authors say.

“You need to get hydrogen to Germany, then you need to get it through the transmission that goes to the distribution network, you need to buffer it for storage,” Flis told EURACTIV.

According to him, all these transportation stages would raise costs. “When you apply the network tariffs across the entire value chain, the cost of your hydrogen doubles even before we consider the margins of different retailers,” Flis explained. 

As a consequence, alternative sources of residential heat become more attractive than hydrogen-based solution, he concludes.

“Heat pumps offer savings of €20,000 to households well into the 2030s compared with hydrogen heating, even in uninsulated dwellings. Adding insulation drives total savings of upwards to €30,000 over their lifetime,” Flis said.

As electrification of energy end-uses continues to increase, demand for gas will inevitably fall, and gas distribution operators “will have to expect to see their business model seriously challenged,” he warned. 

Not all hope is lost for gas network operators though, as the report accounts for one important variable: human stubbornness.

“We should also account for those who might prefer sticking with their boiler instead of carrying out major work, even if it ultimately saves thousands of euros,” note Flis and Deutsch.

According to them, this could be one of the niche opportunities for hydrogen use in heating.

EU rules out banning gas boilers, aims for ‘gradual phase-out’ instead

The European Commission will not propose banning gas-fired home boilers “overnight”, a senior EU official has said, explaining that differences in energy mix between EU member states are just too big to apply a one-size-fits-all solution.

[Edited by Frédéric Simon]



EU funded

This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 893858.

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