‘Hydrogen for heating is not financially feasible — gas distributors need to realise their business model is dead’

Heating buildings using hydrogen is not financially feasible and gas distributors “need to prepare for a disruptive end of their business model”, according to analysis by German think-tank Agora Energiewende.

Gas distribution companies may be lobbying hard to convince governments to allow them to switch their networks to 100% clean hydrogen, with H2 boilers in homes and buildings, but there is “no credible financing strategy” to make this happen, according to Agora’s new report, 12 Insights on Hydrogen.

Even their bid to blend up to 20% clean hydrogen into the gas grid (the feasible limit without massive infrastructure changes) would increase heating costs for consumers by 33% in 2030, while only reducing emissions by 7% (due to hydrogen’s lower energy content compared to fossil gas).

And switching to 100% hydrogen in 2030 — which is only a theoretical possibility due to a lack of available H2 — would increase consumer heating costs sixfold.

The EU wants to reduce greenhouse gas emissions from the residential sector by 42% by 2030 (compared to 2015 levels), but doing so through hydrogen would be prohibitively expensive — trebling heating costs. No government would accept this massive increase in bills, nor would be willing to pay huge amounts to subsidise these high costs, Agora says.

By contrast, electric heat pumps would “offer a much better deal”, the report explains, adding: “In terms of the most efficient use of renewable energy [for heating] from a system perspective, hydrogen boilers are the worst option.”

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The study explains that for every 100kWh of renewable energy, only 61kWh of heat would be produced by a green hydrogen boiler. By contrast, 100kWh of power will produce an average of 270kWh of heat from a heat pump, or 135kWh of heat when temperatures outside are sub-zero.

It would even be a better option to use hydrogen to produce electricity to power a heat pump, with every 100kWh of power producing an average of 125kWh of heat, or 63kWh of heat in freezing conditions — a situation that could be required in wintry “dark doldrums” periods when winds and sunshine are low.

“Even unrenovated households switching to heat pumps during the 2030s would be approximately €20,000 better off than those on hydrogen boilers after 20 years, with the difference rising to €30,000 for households that combine heat pumps with deep [insulation] renovation,” the study says.

It adds: “By 2050, all the gas flowing through distribution networks needs to be either clean hydrogen, synthetic methane produced from decarbonised hydrogen, or biomethane. But it’s already clear now that in the future there will be far less gas than today, and distribution grids will have a hard time attracting new investment, particularly over the next two decades, when heat pumps will offer a much better deal.

“Some [district] heat networks with high temperatures may have residual heat loads requiring hydrogen back-up. 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. Niche opportunities for hydrogen heating like these may arise, but most distribution networks must prepare for a phase-out of their low-pressure gas assets.”

Ultimately, “gas distribution grids need to prepare for a disruptive end of their business model”.

The Agora study also pointed out that shipping green hydrogen to the EU will be too expensive, although importing green ammonia would be cheaper than producing it locally, as Recharge reports here.

For the full Agora report, click here.

This post appeared first on Recharge News.

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