Europe must not allow the push to tackle energy poverty to be derailed by the mirage of heating homes with hydrogen. Instead, the EU should focus on energy efficiency and financial support for poor households to switch to clean energy, write Jan Rosenow and Louise Sunderland.
Jan Rosenow is European programmes director and Louise Sunderland is a researcher, advisor, and policy analyst at the Regulatory Assistance Project, an NGO focusing on policy to accelerate the transition to a clean, reliable and energy efficient future.
The debate about how to reduce emissions from home heating is hotting up, but it risks being derailed by vocal proponents for the use of hydrogen in place of fossil gas. Affordable home heating with hydrogen is, quite literally, a ‘pipe dream’ [noun: a hope or plan that is impossible to achieve]. The available evidence indicates hydrogen has no significant future in the mix of affordable home-heating choices. And it would also most certainly exacerbate energy poverty.
In its response to the European Green Deal, Eurogas makes the case for “affordable solutions that cater to all, particularly vulnerable consumers,” and identifies gas boilers as a “no-regrets approach to decarbonising heating.” In the UK, representatives of the gas boiler industry have urged the government “to back hydrogen in rush to replace gas boilers.” They have further argued that a “gas boiler ban could plunge millions into fuel poverty.” But the terrible irony is that switching from fossil gas to hydrogen for heating would in fact do just that.
Low-income households must be supported to switch away from fossil gas, but hydrogen is not the dream solution that consumers are being sold.
Hydrogen is expensive
The story we are told is that the cost and upheaval of switching from fossil gas to hydrogen would be minimal – we wouldn’t need to insulate our homes, swap out our radiators or change our behaviours. All homes would need is a new hydrogen boiler. This argument overlooks the significant upgrades to the gas network required to make hydrogen viable, with households footing the bill. It also remains to be seen how much of the pipework inside homes would need to be upgraded. But, most worrying, this narrative conveniently ignores that households using hydrogen would incur much higher running costs.
Recent research by Imperial College London, looking at the costs of hydrogen for heating, estimates that the total cost of heat supply may be three times higher compared to present prices.
Hydrogen is more expensive than clean alternatives
The only zero-emissions type of hydrogen is so-called green hydrogen, which is made using renewable electricity. A lot of it. Hydrogen needs more than two units of electricity to generate one unit of heat.
Luckily, hydrogen is not our only hope for home heating. Alternatives available today can deliver heat at similar or even lower running costs to existing fossil fuel systems, whilst delivering significant carbon savings. A heat pump takes one unit of electricity and makes three units of heat. Therefore, a heat pump uses up to six times less electricity for one unit of heat compared to a hydrogen boiler.
The potential impact on heating costs is huge. Heating with hydrogen will cost the average European family about twice as much as heating with an air source heat pump, according to analysis released in March by the International Council on Clean Transportation (ICCT). Even if natural gas costs were 50% lower or renewable electricity prices were 50% higher in 2050, according to ICCT, heat pumps would still be more cost-effective than hydrogen boilers or fuel cells.
Hydrogen will have a future role to play in power and industrial uses, but this is a limited set of high-cost, high-value uses, not the broad heating role that some are now promoting.
Decarbonised heating can reduce energy poverty
We must not allow our energy poverty alleviation efforts to be derailed by the mirage that is affordable home heating with hydrogen. If Europe wants a just, low-carbon home heating transition, countries should redouble their efforts to deliver solutions that we know work.
First, energy efficiency in buildings is still the best solution to sustainably reduce heating bills – the cheapest energy is the energy we don’t use. But the speed at which we renovate buildings to improve efficiency is far too slow to alleviate energy poverty. Regardless of the decarbonisation pathway, energy efficiency and demand reduction will be essential. Efficiency is not specific to heat pumps, or a ‘nice to have’ as some of the hydrogen proponents would have us believe.
Second, we need much more dedicated financial support for poorer households to switch to clean heating early. There are real risks to low-income households if left behind using increasingly expensive fossil gas. These risks will be exacerbated by new carbon pricing mechanisms for fossil heating fuels that continue to expand across Europe. This means that subsidy programmes encouraging clean heating need to front-load support for low-income customers.
Third, the price of electricity compared to fossil fuels such as gas is still too high in many countries, and the disparity between prices continues to increase. Recent analysis by RAP shows that, in Europe, electricity used by households is on average 3.3 times more expensive than fossil gas. Environmental taxes and levies make a significant contribution to this disparity; they are disproportionately loaded onto electricity bills, giving fossil fuels a big and unintended advantage. Correcting this structural imbalance is important so that households switching to clean technologies such as heat pumps can see their costs go down when compared to fossil gas, not up.
Finally, many low-income, low-energy users already place smaller burdens on the grid than their better-off neighbours by using less energy at peak times. We need to enable low-income households who switch to heat pumps to take advantage of the benefits associated with when they use electricity. Time-varying tariffs can reward this and offer real opportunities for lower bills. But regulators must provide these consumers with protections. Automation and price caps can both help. Experience by one of the authors with time-varying tariffs and heat pumps has shown that running costs can be reduced significantly. But not all energy users are energy experts and all of this needs to be easy, or automated, for customers.
Decarbonising heating is complex. But in the face of complexity, we cannot afford to be distracted by a vision of the future not supported by existing, real-world evidence. Arguments that heating with hydrogen will protect those in energy poverty are nothing but pipe dreams.