I want to put forward what may seem an utterly ridiculous idea. My scheme is a way of dealing with the need to electrify as much of our energy requirement as possible, while minimising the total cost of the power and providing 100% reliability. I suggest we transport a large fraction of our energy need in the form of hydrogen rather than electricity.

The idea stems from the high price of transporting electricity compared to natural gas. The large UK utilities publish annual statements that summarise their financial accounts. For the largest, Centrica, the cost of transporting electricity to domestic users was about 4.6 pence per kilowatt hour in 2020[1]. By contrast, it was less than 1.2 pence for natural gas, or just over a quarter as much. Typically, the cost of transporting electricity is not much less than the price of buying from the generator.

This sets off the idea: would it better to run our future energy system by converting some electricity to hydrogen and then shipping the hydrogen in today’s gas mains? The hydrogen would arrive at homes, or perhaps at local electricity substations, and then be converted back to electricity in a fuel cell for use in the home.

Conventional route

Electricity generated -> Transmitted -> Arrives at home

Suggested alternative

Electricity generated -> Converted to hydrogen -> Piped as H2 -> Converted back to electricity at the destination.

Is this an insane idea? No, I don’t think so.

Let’s assume that the wholesale price of electricity is 5 pence per kilowatt hour, or £50 per megawatt hour. This is about the typical level of recent years although at the moment – January 2022 – it would be very much higher. Add the price of transport of 4.6 pence, and the cost rises to 9.6 pence per kWh.[2]

For the alternative route, the wholesale price would be the same – 5 pence per kilowatt hour. Assume 80% conversion efficiency at the electrolyser, and that cost rises to 6.25 pence. Then add the cost of hydrogen transport in the gas network, assuming it is the same as shifting natural gas, of 1.2 pence per kilowatt hour, meaning that is delivered to the home or local substation for 7.45 pence. If the fuel cell is 62% efficient, then the total cost to deliver the electricity to the home is 12.0 pence.

At first sight, this is a relatively large difference. The kilowatt hours of ‘electricity’ delivered via the gas network cost 12 pence, compared to 9.6 pence across the conventional electricity grid. But the customer also has the value of the heat provided by the fuel cell. It would probably be rational to use this heat either for hot water or, in a world dominated by heat pumps, to increase the temperature of the water in the central heating circuit. This would approximately equalise the two costs for getting energy to the home. (And if the hydrogen is made by the electricity generator at times when power is cheap, as is very likely, the difference disappears).

If the two routes are similar in effective cost, why might we decide to go for the extra complexity of transporting part (or even all) of our energy needs in the form of hydrogen?

The reason is that a hydrogen distribution route running alongside the electricity network provides many other substantial advantages.

a) Electricity is expensive to store, particularly in large quantities. Although batteries are getting cheaper, they are currently vastly more expensive that storing gas in underground salt caverns, which is the way hydrogen would be kept between seasons

b) A hydrogen network would also provide storage in its pipes. The UK gas system has over 280,000 km of piping at various pressures. So when electricity was in short supply, perhaps because of a lack of wind, the gas in storage and in the network of pipes could be used to make extra electricity. We can also store months worth of hydrogen gas in underground salt caverns

c) Keeping the gas network open - rather than eventually closing it when the UK stops using natural gas, which is the current intention - could remove much of the need to increase the transmission capacity of the electricity network to meet increased power demand. This benefit shouldn’t be underestimated. As the country switches to 100% renewable power and electrifies everything in the home, the electricity infrastructure will need upgrading, at a cost of many billions of pounds. The extra requirements will range from new high voltage transmission lines (‘pylons’) to local reinforcement of distribution links to major upgrades for most of the tens of thousands of small transformers dotted around residential areas. Shifting a large part of energy distribution to hydrogen can potentially save almost all of this cost.

d) Some offshore wind farms will be able to entirely avoid being connected to the electricity network and could make hydrogen instead. This is already being considered for several North Sea developments in non-UK waters. The turbines will be cheaper to construct and transmission costs will be far lower.

The largest single benefit would be that the inevitable intermittency of wind and solar can be safely and inexpensively accommodated while guaranteeing electricity supplies. If the wind isn’t blowing strongly, as has been the case for much of this winter so far, households would be drawing on hydrogen for electricity supply. Stored in huge salt caverns near to the points of electricity generation, hydrogen would provide a complementary energy source across the country. This is an absolute requirement for a 100% renewable energy system.

This week’s announcement of nearly 25 GW of new offshore wind in Scottish waters makes the point very effectively. This additional capacity will mean that renewables supply will now exceed electricity demand for many hours each year. Wind and solar already have to be curtailed on some occasions as electricity supply is greater than what is needed. To be useful, this excess power will have to be converted to hydrogen, perhaps for use in three months’ time. It then makes obvious sense to ship this energy still as hydrogen. Small fuel cells are as efficient as large power stations at converting it to electricity.

Others have advocated using gas turbines with CCS to provide the necessary backup for when supplies are short. This is probably costlier and, even with good CCS, would still result in significant emissions from natural gas fugitive methane and lost CO2. And this solution doesn’t help at all with the increasing numbers of hours when electricity supply exceeds demand whereas conversion to hydrogen works both ways.

Household demands for power for heat pumps and electric vehicles will double within a decade or so if decarbonisation proceeds as hoped. Converting the existing natural gas distribution networks to hydrogen in order to make electricity close to the end user is worth detailed investigation as to technical feasibility and commercial viability.

Some quick and tentative answers to some of the obvious questions

Can we easily convert natural gas pipelines to carry hydrogen? Yes, most of the UK’s high pressure network is already fit to carry hydrogen and a large proportion of the local links. Most of the entire UK network of pipes will be fit for hydrogen by 2030. Compressor size may need to be increased but because less energy will need to be transmitted than currently, the pipelines will not be overloaded.

What will the electrolysers cost? The cost of the electrolysers is not included in the rough numbers offered in the article. Electrolyser prices are falling sharply and will continue to do for decades to come. Recent estimates for large scale installations are around €300 per kilowatt by 2025. At this level the cost of electrolysers will not add significantly to the price of hydrogen, as long as the electrolysers are operating a large fraction of the hours in the year.

Why do we need to convert back to electricity at the home or the local substation? Although gas might be useful for home heating, electric heat pumps are significantly more efficient, offering up to 4 times as much heat for each unit of electricity used. Similarly, homeowners will need electric power to charge the growing number of electric vehicles. So although fuel cells are only about 62% efficient, it remains better to convert hydrogen to power than combust the hydrogen for energy.

What will the fuel cells cost? Ballard, one of the world’s leading fuel cell manufacturers, has published estimates of $100 a kilowatt at large production volumes. The average home might typically need a one or two kilowatt system to complement electricity supply. The actual cost of installing the fuel cell, ensuring safety and including electronics that allow the cell to be controlled by the power company in order to respond to local shortages and surpluses, will be much greater than this figure. But this cost needs to be weighed against the many advantages of a having millions of fuel cells acting as a centrally controlled virtual power plant.

Would this proposal also possibly work in other countries? Yes, particularly in place which will need to transport electricity long distances to match supply and demand. Germany is the obvious example. The country is opposed to the construction of the necessary North/South pylon lines. The existing natural gas network could be used to shift energy instead. Political resistance to new high voltage electricity distribution links increases the attractiveness of using below-ground hydrogen pipes instead.

Would the economics be improved if the electricity used to make hydrogen was purchased at lower than average prices? Yes, the idea becomes more feasible the lower the price of electricity assumed for the manufacture of hydrogen. And it is entirely reasonable to suggest that hydrogen will only be made at times when power is cheap, because that is when electricity is abundant.

[1] https://www.centrica.com/media/4745/centrica-2020-ofgem-css.pdf. The ‘transport’ charge includes all fees incurred shipping the power or gas from point of origination to point of use.

[2] In addition, of course, electricity prices include the costs of running the company that retails the electricity and the charges imposed to cover subsidies such as Feed-In Tariffs.