Millions of homes could be hydrogen-powered by 2030 – will it drive up energy bills?

Some three million UK households will be using low-carbon hydrogen to power their homes as of 2030, according to a new Government report.

Whilst this will likely push up energy bills for many households, the UK’s new Hydrogen Strategy proposals claim the change will boost the economy by creating a new industry with up to 100,000 jobs. 

Kwasi Kwarteng, the secretary of state for business, energy and industrial strategy, said it would lead to 9,000 jobs by 2030 – by which time the sector’s economy would be worth £4billion.

He added that this would rise to 100,000 jobs and £13billion in economic benefits by 2050.

Some three million homes will be using low-carbon hydrogen to power their homes as of 2030. This image shows the UK’s first hydrogen-powered home in Gateshead

To launch the project, two show homes powered solely by hydrogen have been built in Gateshead, which were unveiled last month. 

For the first time, the homes will enable the public to see how hydrogen power works, and test out a range of hydrogen-fed appliances including boilers, hobs, cookers, fires and a barbecue. 

But what does it all mean for consumers? What are the real benefits of hydrogen –  and how likely is it that households will find themselves abandoning natural gas?

This is Money, with the help of energy experts, answers the most common questions about how the new hydrogen movement could affect you.

How will hydrogen be used? 

Hydrogen can be used like gas in household boilers, and it is hoped it can replace it for many homes in the future, with trials already under way in UK homes. 

The advantage of hydrogen is that there are no carbon emissions, making it a clean source of energy. 

Using it also means energy firms don’t have to depend on expensive imported gas, which has shot up in price recently. 

But to produce hydrogen in a green manner relies on offshore wind farms – and the Climate Change Committee has said the UK would need to increase its current capacity by 30 times to produce enough to replace all existing natural gas boilers.

As such, ‘green’ hydrogen is a limited and valuable energy resource, used primarily for those applications which cannot easily be electrified – such as energy-intensive industrial processes or heavy transport.

This has led to a debate over how much of a role it could play in heating our homes. 

The Energy Saving Trust says hydrogen is likely to be a relatively minor contributor, for example – but other experts believe its widespread use will be necessary to become more environmentally friendly. 

What are ‘blue’ and ‘green’ hydrogen?

Hydrogen can be created in several ways. If produced from natural gas, it contains no carbon in itself, but carbon is given off in the production process.

This carbon must be captured and stored indefinitely, with the end product known as ‘blue’ hydrogen. This can then be used as a low-carbon – but not zero-carbon – gas.

Producing enough blue hydrogen to help decarbonise the UK’s heating system will only be possible with significant scaling up of carbon storage infrastructure.

Producing enough blue hydrogen to help de-carbonise the UK's heating system will only be possible with significant scaling up of carbon storage infrastructure, experts say

Producing enough blue hydrogen to help de-carbonise the UK’s heating system will only be possible with significant scaling up of carbon storage infrastructure, experts say

However, there is at least one report that claims the method of production for blue hydrogen makes it no cleaner than natural gas to produce and use. 

It is also possible to produce ‘green’ hydrogen through a process called electrolysis, where renewable electricity is used to extract hydrogen from water, with oxygen as the only by-product.

At present, this process is two to three times more expensive than that of blue hydrogen, according to Pimlico Plumbers – although costs will come down as the amount of renewable electricity generation increases. 

 We need to rely on green hydrogen rather than blue to reach net zero greenhouse gas emissions as fast as possible

 Barnaby Wharton, RenewableUK

Barnaby Wharton, RenewableUK’s director of future electricity systems, said: ‘Green hydrogen is a clean fuel for sectors which have proved difficult to de-carbonise so far, like shipping and heat for heavy industry.

‘We have the potential to generate massive quantities of green hydrogen cheaply using electricity produced by our onshore and offshore wind farms.

‘Blue hydrogen is produced using fossil fuels with carbon capture and storage, so it’s less clean. 

‘Ultimately we need to rely on green hydrogen rather than blue to reach net zero greenhouse gas emissions as fast as possible’.  

Gas boiler, hydrogen boiler or heat pump?

The difference between the various types of boilers is the type of fuel used to create the energy.

They all still depend on the use of fossil fuels to a greater or lesser degree – except possibly the greenest possible version of green hydrogen.   

Traditional gas boilers use gas to heat up water and then pump it around the home through a central heating system.  

A fully hydrogen boiler would perform similarly to existing gas boilers that most homes already have installed.

The 100 per cent hydrogen-ready boilers are not yet commercially available, with industry leaders currently working on prototypes.

However, combination gas and hydrogen boilers may be available sooner.  

Meanwhile, heat pumps use electricity to draw heat from a source outside of homes – often air, ground or even water – and transfer this to water. This is then used to provide heating for a property, either through radiators or underfloor heating.

It does take a little longer to warm a home than a gas central heating system, but can cut energy bills significantly as the electricity used to power the pump is cheaper gas. 

Whilst heat pumps do not burn fossil fuels or their derivatives, they do use electricity which is often produced by burning fossil fuels. 

However, they are an effective and proven low-carbon heating system, and are highly efficient compared to other heating technologies. They should also become even lower-carbon over time, as the UK reduces the carbon emissions in its electricity supply. 

A hydrogen boiler will perform similarly to the gas boilers that most homes already have

A hydrogen boiler will perform similarly to the gas boilers that most homes already have 

When will we see hydrogen boilers in normal homes? 

Experts believe it will be some time before the majority of consumers can benefit from a hydrogen boiler. 

Mark Bennet, energy expert from Energy Helpline, said: ‘Hydrogen boilers aren’t currently available for purchase to the general public. 

‘There are a few trials running around the UK, and we may start to see some new homes built with combination hydrogen and gas boilers – although it is likely to be a few years before they are more widely available.’

A spokesperson for the Energy Saving Trust said: ‘We expect fully hydrogen boilers to be readily available within the next 10 years – what is less clear is where and when hydrogen will become available as a fuel.

‘The Government’s ambitious trajectory of projects suggests that by 2030 they would like to have created the first ‘hydrogen town’.’

It added that, with small-scale pilot schemes in development, the UK could see small areas moving over to 100 per cent hydrogen within the decade –  or larger areas continuing to use natural gas but with a percentage of hydrogen mixed in.

‘While this would reduce emissions a little in the short to medium term, it does not offer a full de-carbonisation strategy for our homes.’

Currently, the UK Government has a target of installing 600,000 heat pumps a year by 2028. The Climate Change Committee predicts that this technology will heat the majority of UK homes by 2050.

However, for the UK to reach its net zero targets, experts warn the UK needs real pace and scale in rolling out hydrogen boilers and heat pumps. 

A spokesperson for Pimlico Plumbers said: ‘A recent report suggested that in the north of England 3.7million homes and 40,000 businesses could be converted from natural gas to hydrogen by 2034. 

‘This theoretical rate of roll-out depends on many things, and is certainly not guaranteed – particularly when, taking the targets for the whole of the country into account, current projections are considered by some experts to be inaccurate.’

The speed of the roll-out will require hydrogen supplies to be readily available to domestic homes, and enough skilled labour to be available to build hydrogen gas mains and install new boilers into homes. 

It could be many years before the average household will be able to have a hydrogen boiler

It could be many years before the average household will be able to have a hydrogen boiler

What are the challenges when switching to a hydrogen powered home?

The main challenges will be availability and cost. Green hydrogen, while cleaner, is currently far more expensive to produce that blue hydrogen. 

A spokesperson for Pimlico Plumbers said: ‘We still do not know what kind of grants or help will be available to people to make the conversion. 

‘We do not know if the infrastructure will be efficient, reliable and completed in time to meet Government targets.

But once that infrastructure is in place, customers should be able to use their hydrogen boilers in much the same way as their current gas ones. 

Bennet added: ‘The theory is that for consumers, once the gas boiler has been replaced with a hydrogen boiler, there should be little to no effect on how you warm your home, except it is done in a more environmentally friendly manner.’

What are the benefits for homeowners?  

Low carbon hydrogen may play a role in the de-carbonisation of heat in the UK, especially in specific locations and under specific circumstances, such as smaller communities adjacent to hydrogen production facilities.

It will also be essential in the de-carbonisation of industrial processes and heavy transport and this hydrogen should ideally be produced using renewable power and electrolysis.

The benefits of hydrogen include the fact it can be piped directly to each home, much like gas is today.

A hydrogen boiler could replace the gas boiler, and deliver heat without any additional changes to radiators, controls or pipework inside the home. 

However, fully hydrogen boilers are not available at this time, which means whilst it could be beneficial, there may be some wait before the UK can make the most of them.