Energy bills to rise in 2025 to pay for unproven hydrogen gas

Energy bills to rise in 2025 to pay for unproven hydrogen gas

APRIL 14, 2022

tags: hydrogen

By Paul Homewood


h/t Ian Magness


What’s the definition of insanity?

Screenshot 2022-04-14 102535

Household energy bills will rise in three years to fund the development of unproven hydrogen gas which may only be used in a fraction of homes, despite concerns it could worsen fuel poverty.

Hydrogen, which is made from natural gas and used in heavy industry, can be produced from green electricity or from natural gas or have its emissions captured to make it a cleaner fuel.

The Government wants to produce 10Gw of “low carbon” hydrogen by 2030 as part of its strategy to boost energy independence.

Neighbourhood trials of its use to replace natural gas in homes will start from next year, with households that refuse to take part facing having their gas forcibly turned off.

But experts warn that it is unlikely to be a large-scale solution to decarbonising heating because of the high costs of production and its demand for use in heavy industry.

Run into billions

A previous government strategy has suggested that it could be used to heat just 10 per cent of the country’s homes.

But the Government has said it wants to put the costs of developing hydrogen, which could run into billions, on to energy bills from 2025.

The scheme will be modelled on subsidies that were key to boosting the UK’s offshore wind industry over the past decade, which are levied on electricity bills.

This is despite concerns that it could worsen fuel poverty and may never be used widely in home heating.

The Government has said it will make a decision on hydrogen as a replacement for gas in boilers by 2026.

But energy minister Lord Martin Callanan has said that using hydrogen as a green alternative in boilers is “pretty much impossible” and it was more likely to be used by trains, HGVs and industry.

Need to replace meters

Homes using pure hydrogen will need to replace smart meters, hobs and other infrastructure, with an estimated cost of more than £1,000 per household.

It is unclear what the impact of the levy would be on energy bills. An initial £100 million of funding for green hydrogen production capacity in 2023 will come from general taxation, with the levy applied from 2025.

Energy expert Juliet Phillips, from think tank E3G, said funding hydrogen through a levy on energy bills would be a “serious misjudgment”.

“In the middle of a gas crisis which has left millions of families with crippling energy bills, it seems to be totally misreading the mood of the room to consider adding new levies to cover the cost of shiny projects which don’t necessarily represent the most cost-effective way to achieve net zero goals,” she said.

“Hydrogen is expensive to produce and less efficient in most instances than other ways of cutting carbon emissions – for instance through direct electrification, or simple energy saving measures.”

Simon Francis, coordinator of the End Fuel Poverty Coalition, said: “It beggars belief that the Government is trying to cook up new ways to increase energy bills at a time when people are already struggling.

“With even more price rises expected this winter, the Government should be looking at ways of cutting bills, not increasing them.

“And while hydrogen may appear a good idea on paper, we need to be careful. Some hydrogen production uses fossil gas in the process which could only prolong our reliance on volatile gas markets.”

What is interesting here is that all these so-called experts are beginning to wake up to what I and many others have been saying for years – that hydrogen is hugely expensive to produce, will involve spending tens of billions to roll out, and cannot supplant natural gas in bulk.

In particular, the much touted green hydrogen will never be more than a niche operation. Maybe enough to fuel HGVs and industrial needs at best.

If the government really does want to develop hydrogen further, it should have the courage to put the cost onto general taxation, and tell the public which taxes it will raise, or which items of public spending it will cut, in order to fund it.

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