HYD0056

Written evidence supported by Peel L&P Environmental

June 2020

Preface: This response focuses on Peel L&P Environmental hydrogen interests primarily in the NW of England, but with national relevance. Peel supports other submissions to the Environmental Audit Committee from both the Decarbonised Gas Alliance and the NW Hydrogen Alliance.

About Peel L&P Environmental

The Peel Group is a UK infrastructure and property investor with assets owned and under management of over £2.6bn. Our holdings are concentrated in the North West of England, as well as other significant assets throughout the UK. Peel L&P Environmental, part of Peel L&P Group, owns and delivers infrastructure in the energy, waste, mineral and environmental technology sectors.1 Peel is invested in the development of a national hydrogen economy including a plastic to hydrogen solution for the conversion of residual plastic waste to hydrogen suitable for use as a vehicle fuel.2

Executive Summary

  1. Peel welcomes government support to kickstart a UK hydrogen economy, which requires greater investment to deliver urgent, scaled infrastructure for Net Zero GHG emissions reduction by 2050 as required by the Climate Change Act.
  2. To reach a scaled effort of hydrogen production, all forms of hydrogen production must be considered including hydrogen from electrolysis, reformation with CCS and hydrogen from waste plastics.
  3. About 4.9 million tonnes of waste plastic are produced every year in the UK. Plastics which cannot be economically recycled could be transformed into hydrogen with no emissions at the point of use.3
  4. Direct competition between reforming with CCS and distributable hydrogen sources should be avoided.
  5. Peel L&P Environmental plans to create a distributed network of up to 100 waste plastic to hydrogen sites across the UK by 2050, through PowerHouse Energy DMG technology.
  6. We request that current and planned support from Government considers the merits of hydrogen production from residual waste plastics.

Q1. How effective has the Government’s investment in hydrogen projects such as the Low Carbon Hydrogen Supply competition, the UK Hydrogen Mobility Programme and Hy4Heat been in moving the sector towards becoming an integral part of a low-cost, low-carbon economy and boosting the productivity and competitiveness of the UK energy sector?
 

  1. We welcome the initial support in a number of hydrogen related areas, such as Hydrogen Supply, Fuel Switching Fuel Switching and Mobility. However, this remains insufficient to deliver the quantum of investment necessary for construction and operation of low-carbon scaled infrastructure in UK, in which hydrogen can address the Power, Heat, Industry and Transport sectors.
  2. The investment is typically geared towards feasibility studies, Front-End Engineering and Design (FEED) studies and demonstration projects. In order to level up support for low-carbon infrastructure, additional funds are needed to provide significant capital support (£bn’s), as well as continued operational support where needed.
  3. The relatively short (typically 18 months) timescales for low-carbon Government funding programmes do not lend themselves well to the development of hydrogen projects which are large and complex, often defined as Nationally Significant Infrastructure Projects (NSIPs), where planning alone (assuming a Development Consent Order approach is pursued) would take at least 3 years. The funding timetable for delivering operational hydrogen production assets should be extended in line with proposals offered by the five industrial clusters (North West, Teesside, Humberside, Scotland and South Wales).

Q2. What level of output can the sector deliver in the UK, and what Government support would be needed to achieve this? How does the potential for hydrogen differ by end-use?
 

  1. The UK emitted around 450 million tonnes of CO2 in 2017, equating to 40 million tonnes of CO2 from industry and commerce (37%), domestic heat (28%) and transport (35%) sectors in the NW of England.4
  2. In response to this challenge, business leaders in the NW and elsewhere are facilitating the development of a low-carbon industrial clusters by 2030 (and Net Zero clusters by 2040), underpinned by anchor hydrogen (and CCUS) infrastructure projects.
  3. Hydrogen is not a single decarbonised energy solution for any UK or international sector. It is best characterised as a cross-sector (Heat, Power, Transport Industry), cross-vector (Hydrogen, ammonia, methanol etc.) solution that can provide deep decarbonisation benefits and longer-term renewable credentials in a Net Zero business environment.
  4. The Committee on Climate Change last year recommended the UK seeks to ramp up hydrogen production from 27TWh to 370TWh by 2050, underpinned by 180Mt per annum of CO2 sequestered through CCUS.5
  5. Approximately 2.8TWh per annum of hydrogen is produced today in the NW at 4 sites- Inovyn, (Runcorn), CF Fertilisers (Cheshire), Essar (Cheshire) and BOC (St. Helens).6
  6. To reach a scaled effort of hydrogen production, all forms of low carbon hydrogen production must be brought to bear-including hydrogen from electrolysis, reformation with CCS and hydrogen production from residual plastic waste could play its part converting materials that have been discarded by society and are unable to be recycled and creating 99.999% pure hydrogen.
  7. Hydrogen can play a crucial role in the direct replacement of natural gas in virtually all current applications and provide additional benefits in the transport sector such as heavy goods, trains and shipping, where fuel oils dominate today.
  8. The gas network is already setup to deliver the large swings in energy demand from summer to winter. Typical household electricity demands average approximately 10kWh/day with modest increases in winter compared to summer. Average household gas demands are approximately 35kWh/day, however, these range between <10kWh/day in the summer to >80kWh/day in the winter. Hydrogen used as a replacement for natural gas would be equally capable in delivering this energy swing.
  9. Different production technologies will be required to meet the required output depending on end-use. Reforming natural gas with CCS has the potential to deliver the GWh/TWh range required for domestic heat/industrial applications, whereas electrolysis from renewables is unlikely to be capable of this in the medium term, but very capable supplying the transport sector, as is the production of hydrogen from waste plastics.
     

Q4. What are the different implications of hydrogen produced from fossil fuels versus from renewables in terms of cost, scale, and emissions, and in terms of meeting the UK’s net zero targets? 

  1. Hydrogen generated by methane reforming (‘Blue’ H2) and electrolysis of water (‘Green’ H2) are both proven technologies in operation today. ‘Blue’ Hydrogen from methane is considerably cheaper. However, without carbon capture they may not be considered ‘carbon-neutral’. With carbon capture, hydrogen from methane is likely to be the dominate supply of hydrogen in the medium term, with both sources having their place in the future.
     
  2. The UK has been heavily reliant on the export of plastic waste for recycling in recent years due to limited domestic infrastructure. With the tightening of import standards for UK plastic waste in some countries and the imposition of national bans in others, the number of outlets for recyclers has reduced, increasing the amount of material on the market. 
  3. The UK produces about 4.9 million tonnes of waste plastic every year. Some of this material can be recycled, where the material cannot be recycled it is either landfilled or incinerated; Alternatively this material can be converted into hydrogen with no emissions at the point of use.
  4. Peel L&P Environmental have secured the rights to deploy Powerhouse Energy Plc DMG technology in the UK. This is a modular, scalable and robust commercial platform for the treatment of residual plastic waste and conversion of mixed, unrecyclable plastics into a high purity syngas, which can then be used to produce hydrogen, heat and electricity.

Q5. How feasibly can hydrogen technology be applied in various sectors, from transportation, to energy generation and industrial processes, whilst maintaining the highest safety standards?  
 

  1. Hydrogen is well suited to the hard-to-decarbonise sectors such as industry, heavy transport and domestic heating-accounting for 40% of the UK’s emissions.7 Hydrogen plays a crucial role in applications that involve the direct replacement of natural gas.
  2. A wider uptake of hydrogen in the transport, heating and industrial sectors can only happen with a roll-out of a reliable and competitively priced hydrogen network and infrastructure across the UK. It is unlikely that distributable forms of hydrogen such as from electrolysis and residual waste plastics to hydrogen could directly compete with the cost basis of reforming with CCS in the short to medium term. Maintaining competitive prices for hydrogen must be balanced with retaining the high safety standards already operated.
     

Q8. What is the UK industry doing to scale up green and blue hydrogen production by using its offshore wind capability and developing feasible, cost-effective Carbon Capture and Storage technologies?  
 

  1. Peel L&P Environmental is integrally involved in the development of a low-carbon industrial cluster in the NW of England, underpinned by hydrogen projects.
  2. The imminent Net Zero NW organisation will actively leverage inward investment opportunities to advance renewable and decarbonising projects in the NW, in line with the Industrial Clusters Mission to create a low-carbon industrial cluster by 2030 (and Net Zero by 2040). Peel is championing the formation of this organisation, as well as the underpinning government-funded roadmap project that serves as a blueprint to NW industrial decarbonisation (dubbed Route to Net Zero NW).
  3. Peel is a consortium partner of HyNet - a GW-scale c.£1bn hydrogen and CCUS infrastructure project. HyNet aims to provide 100% hydrogen to industrial gas users, 20% blended hydrogen to domestic gas users, replacement of natural gas burners to hydrogen service, hydrogen storage and the capture and subsequent storage of carbon dioxide in soon to be depleted offshore gas fields in Liverpool Bay. Peel is the only partner exploring the collection of CO2 from multiple emitters at its Protos development in Cheshire, with potential CCU linkage.
  4. The NW Hydrogen Alliance (a Peel company providing pro bono services) is actively pushing the advancement of hydrogen projects in the NW and serves as the focal point for all regional hydrogen activity. The Alliance, funded by 16 companies and bodies, executes a PR & Communications engagement programme to facilitate the adoption and acceptance of a hydrogen economy spanning across government, industry, academia and the public.
  5. Peel L&P Environmental plans to create a distributed network of up to 100 waste plastic to hydrogen sites across the UK by 2050, powered by Powerhouse Energy DMG technology. Hydrogen would be produced at ‘transport-grade’ purity (>99.999%) suitable for Fuel Cell Electric Vehicle (FCEV) applications, as well as for potential uses in industrial, heating and ship bunkering operations.

Q9. Given hydrogen’s potential cross-sector application, how co-ordinated is the Government’s approach to policy and regulatory development of hydrogen? 
 

  1. Across government, BEIS, research councils and Innovate UK are planning to invest around £710m for the funding of hydrogen projects.8-11 This will help enable the R&D and early-stage deployment of anchor infrastructure projects.
  2. However, current and planned support available from government should consider the additional societal merits of hydrogen production from residual waste plastics.
  3. Investment support should be harmonised across BEIS, DfT and DEFRA.
  4. The following recommendations are aligned with views expressed by both the Decarbonised Gas Alliance and the NW Hydrogen Alliance, we believe they are of particular relevance in support of residual waste plastics to hydrogen:
    1. The Renewable Transport Fuel Obligation (RTFO) should be extended to include all forms of hydrogen production-including hydrogen from residual waste plastics.
    2. Government should consider infrastructure funding available for hydrogen use in public service vehicles, buses, trucks and port bunkering facilities for hydrogen and consider the ammonia fuelling opportunity in ships.
    3. We believe that 100 hydrogen refuelling stations should be established by 2025 as expressed by the Hydrogen Task Force.12
    4. The selected business model for hydrogen production should be comparable to other distributed forms of production such as small to medium-scale electrolysis.

June 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

1 Peel L&P Environmental, Retrieved June 2020,Company Website, https://www.peelenvironmental.co.uk/

2Powerhouse Energy Plc, Retrieved June 2020, Company Website, https://www.powerhouseenergy.net/

3House of Commons Library, March 2020, Plastic Waste-Briefing Paper, http://researchbriefings.files.parliament.uk/documents/CBP-8515/CBP-8515.pdf

4 BEIS, June 2019, UK local authority and regional carbon dioxide emissions national statistics: 2005 to 2017, Full Dataset https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/812142/2005-17_UK_local_and_regional_CO2_emissions_tables.xlsx

5Committee on Climate Change, May 2019, Net Zero- The UK’s contribution to stopping global warming, https://www.theccc.org.uk/wp-content/uploads/2019/05/Net-Zero-The-UKs-contribution-to-stopping-global-warming.pdf

6Commissioned by Peel Environmental, September 2017, Liverpool-Manchester Hydrogen Hub-Energy to Fuel the Northern Powerhouse, https://static1.squarespace.com/static/594ce2fab11be14d41a2c960/t/5a856bec24a69403d72f319b/1518693365264/Study+for+the+proposed+NW+Hydrogen+Hub.pdf

7Decarbonised Gas Alliance, May 2020, Getting Net Zero Done-The crucial role of decarbonised gas and how to support it, https://www.dgalliance.org/wp-content/uploads/2020/05/DGA-Getting-Net-Zero-Done-final-May-2020.pdf

8UK Research and Innovation, https://www.ukri.org/innovation/industrial-strategy-challenge-fund/industrialdecarbonisation/

9BEIS, 2019, The Industrial Energy Transformation Fund, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/838309/ietffinalising-design-consultation.pdf

10Clean Steel Fund and Low Carbon Hydrogen Production Fund: Written Statement to Parliament https://www.parliament.uk/business/publications/written-questions-answers-statements/writtenstatement/Commons/2019-09-03/HCWS1807/

11BEIS, 2018, The Industrial Fuel Switching Competition, https://www.gov.uk/government/publications/industrial-fuel-switching-to-low-carbon-alternatives

12Hydrogen Task Force, March 2020, The Role of Hydrogen in Delivering Net Zero, https://www.hydrogentaskforce.co.uk/wp-content/uploads/2020/04/FINAL_Hydrogen-Taskforce-Report-Feb2020_Lores.pdf

 

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