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One company’s ambitious plan to cut carbon emissions for an entire nation
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Leeds, UK

If you’re reading this in a city, you’re likely sitting atop long pipelines carrying highly flammable natural gas under tremendous pressure. There are hundreds of things that could go wrong and cause an explosion. Yet that rarely happens.

In most parts of the world, this invisible infrastructure to provide gas for heating and cooking has been built over decades or even centuries by governments or companies. It works now, but not for long. If the world is to reach the goals set under the Paris climate agreement, it has to entirely eliminate emissions from fossil fuels. That means networks delivering natural-gas—which is burned to produce carbon dioxide, the major greenhouse gas responsible for climate change—should be facing a slow but inevitable death.

But Northern Gas Networks (NGN), a company based in the UK, believes it has a way to survive, without contributing to the destruction climate change is likely to cause. NGN wants to shift its customers from natural gas to hydrogen, which burns to produce water but no carbon dioxide. The problem is that NGN will need to rejigger its whole supply chain before it can provide clean hydrogen.

The bottleneck

Five companies run eight gas networks across eight regions the UK. They are all regulated local monopolies, which means they operate at the whim of government policy. As part of the 2008 Climate Change Act, the country’s government committed to the ambitious goal of reducing its carbon emissions by 80% compared to a 1990 baseline. Its target date is 2050. That’s why, even though natural gas is a cheaper and more convenient option for now—regulations would likely require that the gas network be turned off.

 As part of the UK’s 2008 Climate Change Act, the government committed to the ambitious goal of reducing its carbon emissions by 80%. 

“At conferences, people speak about an all-electric future,” says Dan Sadler, NGN’s head of energy futures, where all gas stoves and gas-fired water boilers were replaced with electric ones. But that’d be very expensive for the public or the government, whoever has to pay for it. Electrical appliances are pricier than those using gas, and even if those appliances become cheaper, electricity costs more per unit of energy than burning natural gas. That’s unlikely to change given huge untapped gas reserves available in the world.

More importantly, an all-electric future requires the UK to produce enough electricity to replace the energy natural gas provides.

Natural gas currently supplies more than 30% of all energy used in the UK. But to truly understand the country’s dependence on natural gas consider the fact that, on a cold winter’s day, when Brits have turned up their natural-gas boilers to heat their homes, about 90% of all energy consumed—electricity, heat, and transport—comes from natural gas.

The changeover

NGN thinks it has an alternative approach that would require much smaller, more manageable upgrades: change the fuel used in the gas network to hydrogen.

The first step is getting access to enough hydrogen. The most widely used method to produce hydrogen is steam-methane reforming, which involves reacting methane (CH4) with high-temperature steam (H2O), which creates carbon dioxide (CO2) and hydrogen (H2). But hydrogen isn’t a clean fuel if that carbon dioxide is put into the atmosphere. So the reactor which produces hydrogen will have to be paired with carbon capture and storage, a process where carbon dioxide is captured before it enters the air, and then pumped underground for safe, permanent storage.

Second, current gas networks were not made to transport hydrogen. The good news for the UK is the country is currently upgrading its network from aging iron and steel pipes to polyethylene ones. Though the upgrades aren’t being done specifically in order to accommodate hydrogen, the new pipes should be able to handle the gas without problems, says Sadler.

Third, end-users of energy will need appliances that can burn hydrogen. Some prototypes are already available, and manufacturers are ready to make them at commercial scale as soon as the fuel switching is in process. There’s also cost saving. These hydrogen appliances would be essentially the old appliance with its burner changed, so that it can burn hydrogen instead of natural gas. That’s much cheaper than replacing the whole appliance to use electricity instead.

 Ten years later, the whole country was using natural gas, supplied through the same pipes but was consumed in new burners. 

There is a blueprint for how to make this kind of fuel switch. Until the 1960s, the UK’s gas network provided “town gas,” a 50-50 mixture of carbon monoxide and hydrogen that was produced by burning coal in individual towns. Then the country found huge reserves of natural gas in the North Sea; 10 years later, the whole country was using this new fuel source, supplied through the same pipes but was consumed in new burners.

Better still, there is already an established route of raising money and slowly paying for such a change. The replacement of town-gas burners to natural-gas burners was funded by consumers and paid for through a small levy on their gas bills. Currently, the pipe upgrades underway are also being paid for by consumers via a similar levy. The hydrogen changeover would be slated to start right after the pipe upgrades, and would entail a similarly marginal raise in consumer energy bills, says Sadler.

The economic turnaround

In July 2016, after two years as the head of energy futures, Sadler presented his plan—the H21 Leeds City Gate project—to the government in a 350-page report (pdf) and a slick 17-minute video. He hoped to convince the government that it would be possible to hit climate goals without having to throw away the hundreds of billions of pounds that taxpayers had spent to build the gas network.

 NGN believes it’s possible to hit climate goals without throwing away the hundreds of billions of pounds spent building the gas network. 

To prove the fuel switch could work for the entire country, Sadler knew he had to first demonstrate it at the city scale. He decided Leeds—which happens to be the city that hosts the NGN headquarters—would be the perfect test case. Leeds is the third-largest city in the UK, with nearly 800,000 residents, big enough to make for a valid proof-of-concept.

The total cost of the H21 project is estimated to be £2 billion ($2.8 billion), which will come from the government upfront but will be paid for eventually through a levy in consumer bills. About half the amount will go toward building a hydrogen production, storage, and transport facility, and the other half to upgrade domestic appliances to burn hydrogen.

Only a small proportion of the jobs created by H21 will go to NGN, which will largely reuse the region’s existing gas network. NGN’s partners in the supply chain—such as those building hydrogen-related infrastructure, and supplying and maintaining hydrogen appliances—have the most to gain. Leeds is close to Teesside, a large industrial area in northeast England that already makes hydrogen for industrial use and has some storage capacity.

H21 will involve the construction of new steam-methane reforming reactors in Teesside and high-pressure pipelines from Teesside to Leeds, and will spur new industries to make hydrogen appliances that would be needed in each home. These should bring new jobs and fresh investment into the region.

Sadler is confident that, once the use of hydrogen as a fuel takes off, it can start to decarbonize other sectors. For instance, although carmakers have been touting hydrogen cars for more than two decades, they haven’t gained a significant market share, largely due to a lack of fueling stations. Once hydrogen is available in the gas network, that wouldn’t be a problem.

“When you compare energy bills, the most expensive part is not the gas or electricity bill, it’s what I pay for in petrol and diesel,” says Sadler. “Even if the heating bill doubles when you switch to hydrogen, which it likely won’t, you would end up with net savings if [using cheaper hydrogen] also offsets my transport cost.”

Dan Sadler of Northern Gas Networks outside The Queens hotel in Leeds.
Dan Sadler, the head of energy futures at Northern Gas Networks. (Akshat Rathi/Quartz)

If the changeover is successful in Leeds, Sadler’s team has a plan for how city after city in the UK can convert to hydrogen. All major British cities could be using hydrogen by 2052—just in time to hit climate goals—at a cost of £50 billion.

 If Sadler’s math is right, the H21 project will provide far greater value in terms of job creation and emissions reduction.  

“That’s the price of two Hinkley Points,” says Sadler, referring to the controversial nuclear-power plant that last year got the go-ahead to be built in Somerset, England. At a cost of £25 billion—a sum that many energy experts have said is too much for a power plant—Hinkley Point will provide only about 7% of UK’s current electricity demand.

For context, about 20% of all UK emissions come from its power stations. So Hinkley Point will help displace about 2% of the total emissions. If Sadler’s math is right, the H21 project and it’s UK-wide implementation will provide far greater value in terms of job creation and emissions reduction. That’s because about 20% all UK emissions come from people burning natural gas in homes, and under the extended version almost all natural gas is replaced with carbon-free hydrogen.

If the H21 project were to take off, it could rejuvenate an area of the UK that has seen much slower economic growth than the rest of the country.

“Teesside has everything you need to support a hydrogen economy,” says Mark Lewis, a consultant for Tees Valley Combined Authority, a consortium of local governments formed to look after the development of the region. Teesside has suffered job losses as the UK’s manufacturing industry has shrunk. The most recent shock came in 2015, when the local steel works, once the region’s biggest employer, shut down.

Industries in the UK typically depend on fossil fuels for energy. So it’s no surprise that Teesside, a heavily industrialized area, also has one of the country’s highest per capita regional emissions. That could change with the growth of renewable energy and options such as hydrogen produced from natural gas fitted with carbon capture. “We see the opportunity to cut emissions as a way to rejuvenate industrial growth,” Lewis said on a tour of the industrial town when I visited in August.

Teesside SABIC cracker factory
An existing chemical plant in Teesside that produces hydrogen as a by-product. (Akshat Rathi/Quartz)

The hiccup

Sadler makes a case so compelling that it’s hard to see why the UK hasn’t begun switching to hydrogen already. That is, until he brings up the one caveat: “We’re pretty sure hydrogen will be as safe if not safer than natural gas, but we need to prove it,” says Sadler.

 It will be up to the UK government to pass laws requiring gas networks to start switching to hydrogen. 

In December 2017, NGN received a £10 million grant from Ofgem (paywall), a UK government regulator, to perform the necessary safety studies. These will include testing whether hydrogen—a much smaller molecule than methane—can be sent through the same pipes without leaking out, and what can be done if a hydrogen leak were to occur. NGN has funded the creation of a lab at Newcastle University to help research solutions that could make the fuel switch cheaper than what the plan estimates using current technology. The studies should be complete by 2020, and then it will be up to the government to enact the laws requiring gas networks, which are regulated monopolies, to start switching to hydrogen.

Other gas networks are watching NGN’s play closely. Cadent, a gas network operator in the area covering the cities of Liverpool and Manchester, is starting small with its own hydrogen project. Instead of completely replacing natural gas in the domestic supply, Cadent is proposing the use of hydrogen mixed with natural gas for 15 of the region’s largest industrial consumers. The proposal is yet win approval of the UK government to start.

The UK has a mixed record when it comes to answering its 21st-century energy needs. It is currently the world leader in deploying the latest technologies in wind energy; for example, the world’s first floating wind turbines were built in Scotland. But neither this nor any other renewable energy technology was actually developed in the UK. Similarly, the country has a formidable set of academics working on carbon capture and storage, but though the government’s own studies show that the technology is needed, it has flip-flopped on commitments to provide the financial support necessary to make carbon capture economically viable in the country. The result is that the UK government has spent £168 million on carbon capture without a large demonstration project to show for it. In both these cases, the UK had a chance to become a global leader in an energy technology, but was hamstrung by bungled political decisions.

The H21 project is a chance for the country to redeem itself. NGN is already fielding queries from other governments and gas networks in other countries looking at similar fuel switching—and the project hasn’t even launched, let alone proven viable. Australia, for example, is now considering its own H21-style project in Perth and Adelaide. If the UK pulls it off, the country wouldn’t just succeed at making a big dent in its emissions but could also become the leader of a new hydrogen economy, reshaping the energy supply chain for the 21st century.

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