The Royal Society and Royal Academy of Engineering report on green hydrogen

View profile for Michael Liebreich

Speaker, analyst, advisor, investor in the future economy. Host of Cleaning Up, podcast on leadership in an age of climate change. Managing partner, Ecopragma Capital.

The Royal Society and Royal Academy of Engineering have just published a report entitled "Towards a Green Hydrogen Roadmap for the UK. https://lnkd.in/gKCvpKgy Based on an expert workshop in January this year, the report describes the myriad roles green hydrogen could play in the economy, laying out in great detail what needs to happen in the near, medium and long term to summon this miracle into being. Amazingly, it does this without so much as a cursory look at how much it would cost, or looking at alternatives. That's right, there is no data or analysis WHATSOEVER on what green hydrogen costs to produce, transport, store, distribute, use and keep safe, or how much cheaper other solutions would be. I can lay out a wonderful vision for the role of luxury real estate, holidays and fast cars in my life if I don't have to mention their cost. The £ symbol appears just four times in the report, each time associated with funding set aside for subsidies in the UK: £400m in up-front investment support and £2bn in revenue support over 15 years. *So let's see how much hydrogen £2.4 billion of subsidy will actually deliver, and destroy this report with a back-of-envelope calculation.* The inaugural UK hydrogen auction last year revealed that subsidies of £9.49 per kg were required to get green hydrogen projects to happen. This is in line with figures for actual costs in other European countries. (An EU hydrogen auction cleared at a much lower price, but that was on top of other sources of funding, nowhere near enough to cover the full cost penalty of using green hydrogen.) Let's suppose that £9.48 figure can be reduced by a factor of three between now and 2030. That seems ambitious, based on everything I know, but let's go with it. You would still need £3 of subsidy per kg of hydrogen for each green hydrogen project. And since what you are doing is building electrolyser plants, storage, pipelines, etc, you need 15 years of funding committed up-front, because that's the way project finance works. So the current £2.4 billion of subsidies has to cover 15 years of hydrogen production, of which each kg requires £3 in subsidy, which means it gets you 2,400,000,000/15/3/1000 = 53,000 tons of hydrogen per year. Enough to clean up just 8% of the UK's existing grey hydrogen use! So you've spent £2.4 billion - some of which, by the way, you have taken away from Winter Heat Allowances for pensioners at enormous political cost - and you've cleaned up 8% of the UK's existing hydrogen use. YOU HAVEN'T DONE ANY OF THE COOL THINGS IN THE REPORT. How could this happen? Simple. The workshop was a gathering of vested interests in hydrogen. No one representing alternative pathways. No critical figures. A bunch of hydrogen, fuel cell, chemistry and combustion academics. No scrutiny by economists. Doh! * A huge, huge fail by The The Royal Society and Royal Academy of Engineering *

Colin Matthews

Business Development Director, Causeway Energies

5mo

Were there any real engineers present at the workshop? 🤦♂️ and yet there will be a large numbers of media and public who will believe the report based on the organisation that wrote it (and who can blame them if there is no scrutiny of it)…..

Doug Sheridan

Research, Analysis & Opinion | Energy • Economics • Policy

5mo

With respect, while this is an outstanding take down of today's inch-deep arguments for terrible energy policy, it applies to advocacy for virtually every kind of green energy being touted... and implemented... each day. To wit, we see claims around solar, wind, batteries, EVs, etc all the time that once we put a pencil to it they just aren't true. They too deserve to be called out.

Adi Imsirovic

Director, Surrey Clean Energy; Lecturer, Energy Systems, Oxford University; Senior Associate, Centre for Strategic & International Studies (CSIS), Washington.

5mo

Fossil fuel lobby looks more and more like the old tobacco lobby. Never mind the planet, it is all about their selfish interests.

Ben Guest

Managing Director, New Energy & Fund Manager, Gresham House Energy Storage Fund plc at Gresham House plc

5mo

Doesn't low quality work damage the reputation of these institutions?

Johanna Schiele

Building EU-wide auctions and investing in cleantech projects at the EU's Innovation Fund. Areas of expertise: Clean-tech, energy markets, industry decarbonisation, green finance, auction design.

5mo

Dear Michael, just a small FYI: The EU auction is not on top of other "sources of funding", cumulation with other subsidies is explicitly forbidden to improve price discovery. Thanks for the analysis above as always!

Magnus Killingland

Global Segment Lead Hydrogen

5mo

May the cost for climate resilience and adaptation for a whole population be higher? Would love to see your cost estimates.

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