Scottish Government Hydrogen Policy Statement

Chapter 6. Hydrogen for Heat in Buildings

Policy Priorities: Hydrogen for Heat in Buildings

We will ensure options for deploying hydrogen for heat are kept open, fully explored, evidenced and developed.

We will explore the potential that hydrogen may offer in helping to contribute to our ambitious heat decarbonisation targets and will investigate the system benefits of using hydrogen as part of our zero-carbon heating solutions.

We recognise the potential for hydrogen to replace direct use of natural gas for domestic and commercial space and water heating in Scotland. We will accelerate our efforts to understand more about the costs of hydrogen systems in comparison to other options and how hydrogen systems would be safely constructed, integrated and operated.

We will define, investigate and review potential barriers to the deployment of hydrogen for heat in Scotland.

We will support targeted research programmes and the demonstration of hydrogen for heat solutions, including continuing the hydrogen demonstration funding programme.

Using Hydrogen for the supply of decarbonised heat

Currently, natural gas via the mains gas network is used to supply in the region of four-fifths of the heat in Scotland's homes and businesses. Alongside energy efficiency improvements and the electrification of our future heat supply we are exploring the possibility of replacing the natural gas in our gas grid with hydrogen gas as a potentially significant part of our decarbonisation pathway in some areas.

There is the potential for hydrogen in our gas networks to begin decarbonising heat from the early 2020s. Initially this could take the form of blending small, but increasing quantities of hydrogen in with the natural gas delivered through the networks. Trials being carried out on the Keele University gas network are aiming to demonstrate that blending at up to 20% by volume in the gas distribution network can be accommodated within the network and used by existing gas boilers and other appliances. And one option for the Acorn Hydrogen project at the St Fergus gas terminal, near Peterhead in Aberdeenshire, is to blend hydrogen at 1 – 2 % by volume with the natural gas injected into the national transmission network from St. Fergus.

A more substantial intervention could see 100% hydrogen delivered through new and existing gas networks in future. This would mean replacing existing appliances with ones designed for hydrogen. To understand the potential for 100% hydrogen networks we need further demonstration in the next few years to fully understand the various roles that hydrogen can perform in heating our buildings.

Alongside other research support, we have already provided £6.9 million funding towards the delivery of H100 project in Fife: a first-of-a-kind hydrogen heating network proposed by SGN which we believe will be a project of international significance. (See below for more detail on the H100 Fife Project).

Heat in Buildings Strategy

Decarbonising Scotland's heat supply, whilst maintaining affordability for customers, is a critical part of delivering a successful energy transition and a fundamental step towards achieving our net zero ambitions.

We have committed to £1.6 billion investment in heat and energy efficiency in our homes and buildings over the coming parliament (2021-26). Further actions are set out in the Climate Change Plan update and forthcoming Heat in Buildings Strategy.

To meet our 2030 emissions target, we will need to see mass switching to zero emissions heat in the next ten years. For homes, the transition will include by 2030 significantly increasing the amount of green gases (biomethane and hydrogen) blended into the gas network and switching around 1 million homes currently using mains gas to zero carbon heating systems by 2030.

Hydrogen for Heat

It is important to ensure the option of deploying hydrogen for heat is kept open, fully explored, evidenced and developed.

Our hydrogen policy positions will complement and support our wider Heat in Buildings Strategy to work with UK Government on product standards to require all new gas boilers to be hydrogen-ready and on their Hydrogen Energy and Utility Skills programme. This programme will develop a common competency framework for the training, accreditation, and registration of gas engineers working with hydrogen to ensure they are equipped to install hydrogen equipment into homes safely and efficiently.

As well as bringing forward and supporting demonstrator projects, we are working to better understand other heating options costs, performance and practicalities. We will identify areas of high potential for hydrogen and also which buildings would be most suitable for hydrogen as well as target areas of no- and low- regret during the 2020s until there is greater clarity over the future role of hydrogen as a replacement for natural gas.

UK Government Action Required

To drive further decarbonisation, including support for hydrogen, the UK Government must expand the scope of the Green Gas Levy, or a parallel scheme, and amend gas regulations to allow for greater blending of hydrogen. This is necessary to allow for the progressive reduction in emissions associated with the combustion of natural gas, and to enable the demonstration of 100% hydrogen. Early clarity is needed, by 2025 at the latest, about the future of the gas network in order to deliver hydrogen at scale by the late 2020s.

We also call on the UK Government to continue the programmed support for the demonstration of hydrogen for heat and to step up support for stimulating further renewable electricity generation to meet the future demand from electrification of heat (and transport) and the production of green hydrogen from renewable electricity.

Research programmes

Further research will be required to investigate the energy system benefits of using hydrogen as part of our zero-carbon heating solutions and support the demonstration of hydrogen for heat solutions, including continuing the hydrogen demonstration funding programme.

We will support research programmes to undertake analysis, working with industry stakeholders and local authorities, of the particular areas in Scotland and the parts of our current heat system where hydrogen potential is greatest and also which buildings would be most suitable for hydrogen as part of our decarbonisation pathway. In addition we will identify no- and low-regret actions for hydrogen alternatives and target support for the demonstration of Hybrid Hydrogen/Electric heating systems.

Research will also be required to accelerate our understanding of the costs of hydrogen systems in comparison to other heat decarbonisation options, both at a systems level and for end consumers. We will define, investigate and review potential barriers to the deployment of hydrogen for heat in Scotland and engage the public in order to raise awareness and understanding of hydrogen.

Case Study - H100 Fife 100% Hydrogen Project

SGN (formerly Scotia Gas Networks) are partnering with other UK gas operators in this project to ensure the delivery of a world-first demonstration of an end to end 100% hydrogen energy system, to evidence the role that hydrogen can play in decarbonising heat, using the gas network. The project will construct and operate a hydrogen heat network system in Fife able to service around 300 houses and will be of UK-wide significance offering an important validation of the evidence base carried out by the UK Government in their Hy4Heat Programme.

The project will connect with the existing ORE Catapult 7MW offshore wind turbine situated off the coast of Leven in Fife to directly supply power to the electrolyser for hydrogen production evaluating the opportunity for grid integration systems between renewables and hydrogen production, and demonstrating the business case opportunities that offshore wind can offer for production of hydrogen at scale.

We have provided £6.9 million in funding support towards the cost of this ground breaking £27.7 million project. Other funders partnering in this project include Ofgem (Office of Gas and Electricity Markets), SGN themselves, Cadent, Northern Gas Networks Wales and West Utilities. The H100 Fife Project is recognised as a key building block in the strategic 'Gas Quality Decarbonisation Pathway' set out by UK gas distribution network operators and adopted by the Energy Networks Association (ENA).

The H100 Fife project is part of a larger phased programme proposed by SGN.

Phase 1 - H100 Fife (the project described above) will enable the decarbonisation of 300 homes saving 662 tonnes of CO2/annum – only phase 1 is funded at present.

Phase 2 will offer opportunities to expand H100 Fife to 1000 properties providing annual emissions savings totalling 2,208 tonnes of CO2/annum.

Phases 3, 4 and 5 progressively grow the hydrogen production capability to convert wider domestic, industrial and commercial gas demand of up to 5GWh in the region to eventually reduce emissions by 860,000 tonnes of CO2/annum.