Written evidence submitted by the Royal Society of Edinburgh (HCC0044)

Scottish Affairs Committee inquiry into hydrogen and carbon capture: a response by the Royal Society of Edinburgh

Introduction

1. The RSE is pleased to engage with the Scottish Affairs Committee’s inquiry into hydrogen and carbon capture in Scotland. Hydrogen is rapidly emerging as a key area of interest for the RSE, as reflected by its Scotland-Germany Hydrogen Research Scheme[1] (funded by Scottish Government), which aims to fund hydrogen research to inform relevant government policy objectives, and its recent public engagement event Hydrogen, the new green fuel – all your questions answered, hosted as part of its RSE Investigates series.[2] The RSE also recently submitted a response to Scottish Government’s consultation on its Draft Hydrogen Action Plan.[3]
2. If harnessed to its full potential, hydrogen will help Scotland to meet its decarbonisation targets and create high-value jobs in support of a just transition. In order for this to happen, the UK and Scottish Governments must identify which applications to prioritise in order to scale up the underlying technologies and develop the market. The below recommendations focus on the actions the UK Government could take in the short-term to pump-prime Scotland’s hydrogen sector.
3. The RSE would be pleased to meet with the Scottish Affairs Committee to discuss its response in more detail or to provide additional evidence if this would be helpful. Recognising that energy policy involves an interplay between reserved and devolved powers, all recommendations are to be understood in the context of the policy and economic levers that would be most appropriate for the UK Government to implement.

Green hydrogen

4. We would like to state from the outset our view that the UK should focus on green hydrogen production. Blue hydrogen production that relies on natural gas, with the accompanying global pressures on its cost and availability, is not a realistic option.  Its production further relies upon carbon capture and storage (CCS) technology, which remains expensive and inefficient in most cases. However, a focus on green hydrogen production should not impede existing or future CCS research which we recognise could hold potential for other applications.
5. Scotland has a strong heritage of renewable energy generation, particularly in the form of wind energy. With the implementation of the latest round of ScotWind projects consolidating Scotland’s energy ambitions, Scotland’s ability to produce low-cost green hydrogen surpasses that of most other nations, including those whose capital investments in the hydrogen sector are an order of magnitude greater. Scotland should not ignore these inherent advantages and look to play to its strengths as it couples leadership in offshore wind generation with green hydrogen production.
6. Green hydrogen is also a promising solution to the perennial issue of surplus energy storage and this has been brought into even sharper focus due to the recent war in Ukraine. When combined with long-duration storage in the form of pumped hydro, Scotland has the potential to become a storage powerhouse, which could bring considerable benefit to Scotland’s economy. 

Recommendation: The UK Government should prioritise green hydrogen and exploit the natural synergies that exist between extensive offshore wind resources and large-scale hydrogen production. This includes an emphasis on hydrogen’s role in energy storage.

Transport

6. Transport remains Scotland’s single largest and most enduring source of greenhouse gas emissions, having only decreased by 0.9% between 1990 and 2018. Although electrification forms part of the solution, the higher costs and practical challenges of electrifying more remote segments of the national rail system will be particularly difficult to surmount. In these instances, deploying trains which run on hydrogen fuel cells could be a more viable option. Scaling up hydrogen technologies is dependent on the development of a corresponding market to receive them and so facilitating a sectoral shift to hydrogen will be an important step in terms of building demand. More generally, a move to hydrogen will have a positive ripple effect across the UK if similarly remote areas are able to learn from Scotland’s example.
7. Green ammonia could serve as another important alternative fuel, particularly for the long-haul shipping sector.

Recommendation: The UK Government should invest in hydrogen-fuelled transport (particularly the train system) as a pathway towards fully decarbonising the sector.

Green ammonia

8. Given that renewable energy is plentiful in Scotland, it is well-placed to exploit the numerous advantages of green ammonia production. Green ammonia is made by combining green hydrogen (i.e. derived from electrolysis powered by renewable energy) with nitrogen extracted from the air. It can be applied to a range of uses; importantly, it is emerging as a versatile energy vector, a green fuel for long-haul shipping and represents a carbon-neutral alternative to traditional fertilisers. The latter is particularly timely as the present war in Ukraine has negatively impacted wholesale fertiliser costs and supply chains. Capturing a dominant share of the green ammonia market would differentiate Scotland from other countries looking to establish themselves as hydrogen frontrunners, ensuring Scotland stays competitive and unique in what it can offer to global markets. Green ammonia would also help to address the challenges of storing surplus renewable energy, which would contribute to alleviating fuel poverty and energy insecurity in island and remote communities (see section on ‘Island and rural economies and fuel security’).

Recommendation: The UK Government should invest in the development of the green ammonia sector, recognising its multiple benefits of providing energy storage; promoting energy security; decarbonising shipping and other industries; addressing fuel poverty; and contributing to food security.

Island and remote economies and fuel security

9. The energy market is experiencing profound instability, leading to surging prices for consumers and forcing many households into fuel poverty. Remote and island communities are at an acute risk of fuel poverty due to their distance from the gas grid. According to Energy Action Scotland, 57% of Hebridean and 47% of Highland homes will be categorised as experiencing fuel poverty following the lifting of Ofgem’s energy price cap on 1 April 2022, meaning they will be spending more than 10% of their household income on energy after housing costs. Given their isolation, localised energy solutions will become imperative to moderating prices, ensuring security of supply, decarbonising energy generation and bringing needed economic opportunity and diversification to Scotland’s islands and remote regions.
10. Scotland’s Hydrogen Action Plan recognises the regional benefits to be derived from hydrogen production and provides for Regional Hydrogen Energy Hubs that situate the entire hydrogen value chain within a particular location and combine it with multiple end users to build resilience and create new opportunities for the local community. We would endorse this decentralised approach to hydrogen production that affords remote and island communities the autonomy to meet their own unique energy and economic needs.

Recommendation: The UK Government should consider how remote and island communities can be supported to grow localised hydrogen economies to promote energy independence and economic prosperity.

Blending

11. Hydrogen is safe to inject into the natural gas grid at proportions of up to 20% and is compatible with existing cookers, boilers and heating systems. At present, the UK does not blend hydrogen with natural gas. The UK’s Hydrogen Strategy states it will reach a final decision on blending in 2023 following ‘testing of the safety, technical and economic case.’ In the interim, all five of Britain’s gas grid companies have announced their commitment to preparing for a 20% injection volume in anticipation of a positive outcome.
12. Diversifying our energy mix is becoming an increasingly urgent issue as the war in Ukraine is emphasising the risks of foreign fuel dependency. Increasing green hydrogen production will make Scotland and the UK more energy self-sufficient and protect against the impacts of a volatile global energy market.
13. Although we agree there must be a sound scientific and economic basis for blending, there is already a considerable amount of data from other countries and pilots such as HyDeploy which suggests that blending is feasible in principle.

Recommendation: We support the need for research to determine the optimal level of hydrogen blending for the UK context in order to achieve carbon benefits without leading to undue costs for consumers and industry. However, we would encourage the UK Government to accept blending in principle.

Industry relationship

14. Sector coupling refers to the idea of establishing direct linkages between energy producers and consumers, helping to maximise efficiencies and enhance system responsiveness. While such partnerships are more common in Scandinavian countries, a successful Scottish example is Edinburgh Airport’s recent partnership with Ørsted, who are directly supplying the airport with sustainable technologies - including hydrogen fuels - to meet its 2040 net-zero vision. The government-academia-industry interface (also known as the ‘triple helix’ innovation model) is also a critical step to achieving economic and technological transformation at pace and scale.
15. The growth of the offshore wind sector can be largely attributed to the Scottish and UK governments creating a welcoming climate for investors and demonstrating their long-term commitment to the sector through ambitious but supportive policies. The UK’s hydrogen policy framework must continue to be similarly bold to attract and retain private investment.

Recommendation: The UK Government should accelerate the growth of the hydrogen business model by actively encouraging cross-sectoral partnerships and engendering investor confidence through supportive policies.

Research priorities

16. Social scientists will be critical to achieving public acceptance of hydrogen. Although hydrogen is a proven technology, the public’s awareness of its applications and benefits is variable. Social scientists can identify the barriers that undermine widespread behavioural change and work with individuals and communities to co-design interventions suited to the local context. This is particularly important from a just transition perspective as decarbonisation is already having an impact on skills needs and workers must be empowered to retrain and adapt to these changing expectations. We are pleased by the UK Hydrogen Strategy’s mention of public and consumer awareness as a key factor underlying hydrogen policy development, though the Strategy does not provide details on how this awareness will be achieved.

Recommendation: The UK Government should provide dedicated funding to cross-disciplinary research collaboratives which include strong elements of social science research.

April 2022