Assessment of Hydrogen Production Costs from Electrolysis: United States and Europe
Hydrogen for heating? Decarbonization options for households in the United Kingdom in 2050
The heating sector makes up 10% of the United Kingdom’s carbon footprint, and residential homes account for a majority of demand. At present, central heating from a natural gas-fired boiler is the most common system in the UK, but low or zero-carbon hydrogen and renewable electricity are the two primary energy replacement options to reduce the carbon footprint. An important consideration is how using either energy source would affect heating costs.
This assessment projects the costs for a typical single-family UK household and climate performance in 2050 using low-GHG or GHG-neutral hydrogen, renewable electricity, or a combination of both. The cost of using boilers or fuel cells in 2050 with two types of hydrogen are assessed: produced via steam-methane reforming (SMR) combined with carbon capture and storage (CCS), and electrolysis using zero-carbon renewable electricity. The costs of heat pumps, the most promising heating technology for the direct use of renewable electricity, are also assessed in two scenarios: a heat pump only and a hybrid heat pump with an auxiliary hydrogen boiler.
At present, fossil energy is used for the SMR + CCS conversion process, which means that producing hydrogen this way provides GHG emission savings of 42%–61% compared with fossil gas. When hydrogen rather than natural gas is used as process fuel, producing hydrogen with SMR + CCS provides GHG savings of 69%–93% compared with fossil gas. Using renewable electricity and electrolysis hydrogen produced from wind and solar has a carbon intensity of zero.
In 2050, both heat pump scenarios would be more cost-effective than the four hydrogen-only technologies. Hydrogen boilers using SMR + CCS are less expensive than those using electrolysis hydrogen from zero-carbon electricity. Fuel cells using either type of hydrogen will be significantly more expensive than the other options.
These findings come with uncertainties. Were renewable electricity prices to be 50% lower, or natural gas prices 50% higher, the cost to use a boiler with electrolysis hydrogen could become cost competitive with a boiler using SMR + CCS hydrogen, and the cost advantage of the heat pump scenarios would increase. Even in the case that both renewable electricity prices were 50% higher and natural gas prices 50% lower, a heat pump would still be the most cost-effective option.