Decarbonising Hydrogen in a Net Zero Economy

The majority of studies on the future of the hydrogen sector in GB focus electrolytic H2 from RES and fossil based H2 with CCS. The potential for nuclear to
participate in the H
2 economy is often not considered due to high costs of recent assets and lack of clear policy direction leading to planned projects being put on hold. This study investigated how policy support for new nuclear technologies and business models to provide low carbon electrolytic H2 could reduce nuclear and system costs whilst reducing reliance on fossil fuels when deployed alongside RES on the path to netzero.

Key insights include:  1) Deploying renewables and nuclear for power and hydrogen is required to ensure rapid decarbonisation and reduced reliance on fossil fuels. Cumulative emissions from 20212050 can be reduced by 80 MtCO2e and gas usage in power and H2 by 8k TWh (thermal).  2) Achieving H2 volumes required for netzero without fossil fuels will be challenging without support for electrolytic H2 from RES and nuclear. The high share of virtually baseload H2 demand from transport and industry results in a high dependence on fossil-based blue H2, comprising over 35% of demand in 2050 in all scenarios that exclude a “Gigafactory” for nuclear derived H2. Clear support for electrolytic H2 is required to reduce costs relative to fossil-based blue H2.  And 3) Including nuclear with colocated electrolysers alongside high RES is economically efficient, reducing total system spending by 69% (NPV from 2021 2050). Colocating electrolysers with nuclear enables nuclear plants to provide additional flexibility to the power grid to match fluctuations in RES supply by diverting electricity output to or away from electrolysers for H2 production.

See the full report context presentation, “Decarbonising Hydrogen in a Net Zero Economy,” by Aurora Energy Research, with input provided by LucidCatalyst, the International Atomic Energy Agency (IAEA), and EDF. Report prepared byAnna MacDonald and Felix Chow-Kambitsch, September 27, 2021.