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Heat subsidies leave hydrogen and fuel cells out in the cold

The inhabitants of a frequently cold and windy country like the UK need to heat their homes, even in what is loosely termed “summer”. This is achieved mostly by natural gas-fed boilers – but this dependence…

Time to put some heat into the hydrogen industry. Flames on a black background, Olga Nikonova

The inhabitants of a frequently cold and windy country like the UK need to heat their homes, even in what is loosely termed “summer”. This is achieved mostly by natural gas-fed boilers – but this dependence on gas is unsustainable in the long term if the country aims to meet its targets for cutting greenhouse gas emissions by 80% by 2050.

In 2013, the government published a heat strategy and this year it extended the Renewable Heat Incentive from non-domestic buildings to also include homes. This provides a subsidy to people installing low-carbon heating technologies, with the aim of building up new markets and supply chains, pushing down costs and expanding the take-up of low-carbon heating.

But the list of technologies for which a subsidy is currently available – heat pumps, biomass boilers and solar thermal heating – excludes hydrogen and fuel cell technologies, despite studies that show they could contribute to hitting emissions targets in 2050.

Heat pumps are the most controversial inclusion in the list, as currently they generate more emissions gas boilers when the electricity needed to operate them is taken into account. This inconsistency stems from the the fact that the subsidy’s aim is to contribute toward the EU obligation of generating 20% of energy consumption from renewables by 2020, rather than to cut overall greenhouse gas emissions.

The ambient heat used by heat pumps counts towards this EU obligation, while the emissions from the electricity generation are overlooked. This policy will increase UK emissions in the next few years if many people swap their gas boilers for heat pumps.

Enter the fuel cell

Our team of scientists from UCL and Imperial College London published a report that challenges the orthodoxy displayed by these slim selection of technologies, exploring the potential for fuel cells and other hydrogen-powered technologies to contribute to the heating market.

Fuel cells, which generate electricity from chemical reactions, are already in use around the world for heating. Although they have mainly been viewed in Britain as a future power source for vehicles, in fact more commercial fuel cells have been sold for heating than for any other use. Sales of residential fuel cells have been doubling annually in Japan, Korea and in Europe. At the same time fuel cell costs have fallen substantially in recent years, to the extent that they will be sold without subsidised in Japan from 2015.

These fuel cells are powered by natural gas, which is reformed into hydrogen within the fuel cell. If these were used in the UK, the net carbon emissions would be lower than using heat pumps for at least the next ten years. This is because emissions from electricity generation (0.48kg CO2/kWh) are currently much higher than those from natural gas (0.19kg CO2/kWh). This gap will gradually close as more renewables are built and coal power stations are retired.

Further into the future, it might be possible to pipe hydrogen to homes and businesses as a low-carbon alternative to natural gas. Hydrogen could replace natural gas in modern, efficient condensing boilers or power fuel cells. This would avoid some of the disadvantages of alternative technologies such as heat pumps, which have high up-front costs, perform poorly if installed badly, and take up a lot of space in homes and buildings.

Left on the margins

Hydrogen can be produced from numerous fuels, reducing the reliance of the UK on oil and gas from abroad. As they operate apart from the national grid, fuel cells provide decentralised electricity generation, reducing load on the grid and providing power even during blackouts. Fuel cells could also help to avoid costly changes to the electricity networks in the future by generating electricity at peak times, in the event that the use of heat pumps and electric cars becomes more widespread.

Despite the potential benefits, hydrogen and fuel cells have consistently been excluded or marginalised in government technology assessments, which instead focus only on those technologies in the Renewable Heat Incentive, together with combined heat and power systems and district heating. Most UK-focused studies used to support policy papers have also not considered hydrogen and fuel cells.

The fact is that without government support in the early development stages, no low-carbon technology will be successful. Policies to address market failures for low-carbon heat technologies generally don’t include fuel cells and hydrogen – despite the fact that in other countries such as Japan, such support has provided the springboard required for the technology to reach commercial maturity. While the Renewable Heat Incentive does have a procedure for supporting new technologies, there is no prospect of this being used to support either fuel cells or hydrogen in the near future.

There is a big opportunity for Britain to develop a successful hydrogen and fuel cell industry for heating: the UK has a strong scientific and engineering research base, and support at home would enable UK companies to capture a share of fast-growing global supply chains.

The potential of hydrogen and fuel cells – to provide homes and businesses with secure, low-carbon heat and – means that it’s high time they were considered in government roadmaps and policies, on a level playing field with other low-carbon technologies, and brought in from the cold.

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