Energy and Utilities

The Energy Transition | Government announces accreditation scheme for low-carbon hydrogen

Published on 20th Feb 2023

Welcome to our top picks of the latest energy regulatory and market developments in the UK's transition to net zero.

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This week we look at the government's plan to introduce a scheme to certify low carbon hydrogen production and generation, the award of funds for emission reduction projects in energy-intensive industries, the world-first absorption of reactive power from the transmission network by a battery, and the low cost of Octopus Energy's heat pumps.

Government consults on scheme for low-carbon hydrogen

The government announced plans to develop a globally recognised certification scheme for low-carbon hydrogen production and generation on 9 February 2023. The scheme will verify the sustainability of hydrogen and aims to incentivise its production, investment and use across the country.

The plans are set out in an industry consultation and the intention is that the scheme will be in place by 2025. The government intends to use the Low Carbon Hydrogen Standard (LCHS) as a basis for the new scheme, allowing producers of LCHS compliant hydrogen and the end consumers of that hydrogen to certify under the scheme. The consultation also reiterates the government's ambition to grow the production of low carbon hydrogen in the UK to 2GW in construction or operation by 2025, and up to 10GW by 2030. Department of Energy and Security and Net Zero Minister Graham Stuart said that, "Thanks to this new scheme, investors and producers will be able to confidently identify and invest in trusted, high-quality British sources of low carbon hydrogen, both home and abroad."

The government has extended the appointment of the UK's first Hydrogen Champion, Jane Toogood, by a further six months. Toogood stated that her priority is to facilitate government and industry collaboration to encourage investment in the hydrogen economy and to kickstart its production. She also commented that the low-carbon certification scheme is considered key to growing a low carbon hydrogen economy in the UK.

The announcement coincides with news of numerous innovations in the UK hydrogen sector. The government plans to invest £113m in Vertical Aerospace's development of hydrogen and all-electric planes. the Department of Transport awarded funding to AceOn's £4.6m project to develop green hydrogen technology to power marine vessels used in servicing offshore wind farms. This will include the use of the trial of onboard and offboard hydrogen systems as methods of propulsion. On 9 February the government also approved the world's first excavator powered by a hydrogen combustion engine for use on UK roads.

Government awards £12m to cut emissions from energy-intensive industry

On 13 February 2023 the government revealed the 22 projects which will receive the latest round of grants from the Industrial Energy Transformation Fund (IETF). Each project will receive a share of £12.4m for the purpose of reducing carbon emissions in some of the country's most polluting industries.

One recipient of the funding is Autotech Engineering's SERPENT project which captures and reuses energy lost during the manufacturing process of metals used in vehicles. This technology has already delivered a 10% reduction in the peak power usage of a manufacturing plant. Other successful projects include: a new thermal storage system which reduces the carbon emissions involved in cheese production by 34%; an air-source hear pump system to be used in food harvesting by one of the biggest food companies in Europe based in Carmathenshire, Wales; and a waste-capture system for roadmaking in South Yorkshire.

The government estimates that industry contributes 16% of the UK's carbon emissions and that these need to be reduced by two-thirds for the country to achieve its 2035 net zero target. The government has now awarded over £34m through the IETF since launching the scheme in June 2020.

Department of Energy and Security and Net Zero Minister Graham Stuart said: "Boosting the energy efficiency of industrial processes is a critical step not only in our transition to a lower-carbon economy, but also by helping businesses to cut their energy costs and protect valuable British jobs."

New battery absorbs reactive power directly from UK transmission network

Zenobē has announced that its newly built 100MW Capenhurst battery has absorbed reactive power directly from the transmission network in the UK, making it the first battery to do so in the world. It is also the largest grid-connected battery in Europe.

In May 2020, Zenobē won a nine year contract to deliver 40MVar of reactive power services. Reactive power services are the process by which the National Grid ESO (NGESO) manages the voltage level on the transmission system. NGESO is required to ensure the voltage remains within statutory limits. In order to do this, it can direct generators or other asset owners to either absorb or generate reactive power.

Zenobē’s battery is the first to be directly connected to the transmission network in the UK. It will help stabilise the system, provide security of supply to the Mersey region whist also enabling the further adoption of renewable power sources. The site is also forecast to remove just over one million tonnes of CO2 over 15 years compared to other traditional sources of power. 

Octopus Energy installs heat pumps at a similar cost to gas boilers

Octopus Energy has confirmed that it has installed heat pumps for as little as £2,300. This is similar to the cost of installing a gas boiler.

The cost stated includes a deduction from the Boiler Upgrade Scheme. This is a grant given by the government to cover part of the cost of replacing fossil fuel heating systems. The Boiler Upgrade Scheme will provide £5,000 towards an air source heat pump with a maximum capacity of less than 45kWth.

Octopus expects that within the next 10-15 years most households will have a heat pump. With increased demand and continually developing technology, it anticipates that costs will continue to decrease, and therefore the price consumers will pay to have them installed will also decrease. 
Heat pumps capture heat from outside and move this inside a person's home. Electricity is used to do this and as electricity generation becomes increasingly green, heat pumps are considered a potentially very low carbon source of energy.

This article was written with the assistance of Hannah Wooderson and Luke Webb, Trainee Solicitors.

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* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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