Potential for a Hydrogen Village

Tuesday 24th May 2022 Westminster Hall

11:00

[Hannah Bardell (in the Chair)]

I will call Justin Madders to move the motion, and I will then call the Minister to respond. As is the convention for a 30-minute debate in Westminster Hall, there will not be an opportunity for the Member in charge to wind up.

[Justin Madders (Ellesmere Port and Neston) (Lab)]

I beg to move,

That this House has considered the potential for a hydrogen village.

It is a pleasure to see you in the Chair, Ms Bardell. Many Members in the north-west and north Wales have mentioned the genuine interest in, and support for, the HyNet project. Speaking as the Member for an area where industry consumes about 5% of the whole country’s total energy consumption, I am only too conscious of the need for us to change if we are to meet our climate commitments. Faced with that fact, the companies that are responsible for a lot of those emissions have been working together to address the future and are working on a whole series of projects that will contribute to our reaching net zero while also enhancing the local economy.

We were very pleased to have the HyNet project approved for the first industrial cluster last year. With our unbeatable combination of industry and geology, we believe that we can transition to a hydrogen-based economy with carbon capture more quickly than just about anyone else. Our current infrastructure can be easily converted to operate with hydrogen, and HyNet believes that it can capture up to 800,000 tonnes of CO₂ every year.

It is exciting that my constituents potentially have a big part to play in this endeavour, and it is hoped that the area of Whitby in Ellesmere Port will be confirmed next year as the location for a hydrogen village programme. The natural gas running through local pipes in the area would be changed to hydrogen from 2025, and Whitby has been identified as an ideal place to host the hydrogen village programme, largely due to its closeness to HyNet:

“The Hydrogen Village is a really exciting project where local homes and businesses would be able to reduce their emissions—while continuing to build the North West’s reputation as a leader in the hydrogen economy”.

It also means that we can back UK manufacturing jobs, but as always with these things, the maximum benefit will be found if we can take the maximum number of people with us.

That means not only showing people that it is a good thing for everyone if they are at the spearhead of a new way of heating our homes, and that they can play a big role in meeting our net zero targets. It also means ensuring that people feel that things are being done with their consent and agreement, rather than them being done to them. Of course, a big part of that will be communication, and I know that Cadent has already begun working on ways to advise residents about the project and will be opening a new shop in the town in July, so that residents can find out more.

Obviously, residents will have legitimate questions, and I imagine that they will want to know about the potential costs, their safety and the level of disruption they will face. From the information I have had to date, I think that all those concerns can be dealt with. With the rapidly increasing energy bills that we all face, I would hope that the cost issue will be a positive for my constituents, with at least a guarantee that they will not pay any more for their energy. I hope that there is scope for us to go further than that and be able to offer them a discount. It is early days, but the only inquiries that I have had so far from constituents are about why people have not been included in the trial, which demonstrates the positive spirit of the people of Ellesmere Port, their willingness to embrace the future, and their eagerness to play their part in tackling climate change.

[Jim Shannon (Strangford) (DUP)]

I thank the hon. Gentleman for bringing this issue forward. Does he agree that we have a clear obligation to fully explore the use of hydrogen, which is more beneficial than carbon emissions, and that the proposed trial village in Whitby reflects the needs of an average community? Does he agree that such trials are imperative and essential for the drive for clean energy, and that they should be shared with all regions of the United Kingdom of Great Britain and Northern Ireland, so that we can all learn from them?

[Justin Madders]

I agree with the hon. Gentleman. Indeed, when we get to the carbon capture element of the project, we will be joined together, because the Irish sea will play a major part in the storage of carbon emissions.

Let me return to the trial itself. There will always be some people who, for perfectly legitimate reasons, will not want to get involved, and one can imagine that, for some, the fear of something new will be too much. It is fair to say that no amount of persuasion will encourage them to participate, and it is important that if people cannot be persuaded to take part, they are not forced to do so. The old saying is, “One volunteer is worth 10 pressed men,” and it applies to hydrogen as much as to anything else. I think the number of those who do not want to take part will be small, but if the past couple of years have told us anything, it is that an element of compulsion will not make those with misgivings change their minds; indeed, it often has the opposite effect.

I think take-up will be significant, based on the early response, and if the trial proves a success, there will be a national change because approximately 23 million homes and businesses in the UK rely on natural gas for cooking and heating. To put that in context, that represents a quarter of the UK’s carbon dioxide emissions, so we need to act on the whole of household infrastructure if we are to get to net zero. What better way to do that than an initiative that maximises support for UK jobs and enhances the principle of “make, buy and sell more in the UK”?

As much as that principle applies to anything, it applies to the 1.6 million boilers made in the UK each year, supporting jobs in places such as the north-west and the west midlands. Furthermore, a huge supply chain serves those manufacturers, and I am sure that building on that talent base is central to any levelling-up strategy the Government want to introduce. We also have tens of thousands of skilled gas engineers, which is why I welcome the support expressed by trade unions such as Unite and GMB whose members work in the sector and which support the move to hydrogen. I declare for the record my membership of both those trade unions.

UK boiler manufacturers truly are world leaders in the research and development of hydrogen-ready boilers. Critically, all have committed to sell hydrogen-ready boilers at the equivalent cost of a current gas-burning boiler. That commitment is key for households that are understandably concerned about the cost of converting to low carbon. We know, for example, that electric vehicles are substantially more expensive than traditional combustion-engine vehicles. That is one of the major barriers to consumer-led change, but we will not have to contend with it in this field.

I am aware that boiler manufacturers have written to the Prime Minister to confirm their commitment on that cost issue. Will the Minister say what consideration has been given to that commitment from boiler manufacturers to make in the UK and sell at the same cost as current natural gas boilers, which I hope he welcomes? What consideration has been given to comments by the trade unions on their view that it is not possible to achieve the large-scale workforce shift from boilers to heat pumps? Where is the hydrogen-ready boiler consultation? There was a commitment made to publish it last year.

Some people out there will say that we should not be doing this at all because it involves the wrong type of hydrogen, but the project has the potential to cut CO₂ emissions by at least 80%, which is a pretty good start. It will not deliver us to the promised land of net zero, but it is an important—I would say probably inevitable—stepping-stone for getting us there.

The Climate Change Committee, which is the Government’s independent adviser on climate change, has recommended that significant volumes of blue hydrogen be produced by 2030 to help the UK to meet its climate targets, help industry to cut emissions quickly and ensure that there is a market for green hydrogen once it becomes cost competitive. The committee’s analysis found that blue hydrogen could save up to 85% of emissions compared with unabated use of fossil gas.

The committee has also concluded that blue hydrogen is the right first step to take because the technology available now will help emissions-intensive businesses that cannot electrify their processes to get on the road to reducing their emissions this decade. Critically, that will help to preserve jobs in the UK’s industrial heartlands and in my constituency as we target net zero further down the road. We want to get our industry powered and our homes heated by green hydrogen, but if we take a hard-line approach and insist on going for the zenith of green hydrogen immediately—all or nothing—I fear that it will probably not happen at all, which means we will have missed the opportunity to reduce our emissions now.

In some industries, those technologies are just not ready to go at a competitive price, and if we do not take those first steps now, over the medium term we will see those industries and jobs move abroad, and they might continue to emit the same levels of CO₂ that they emit now. We would end up in a lose-lose situation. We would lose our chance to reduce emissions and lose the chance to preserve and increase the number of highly skilled, well-paid jobs that go with those industries. We know that there are voices out there that are only too ready to claim that protecting the environment costs jobs. We cannot give those voices any opportunity to gain strength. Our focus must be on delivering a just transition. Along with the need to bring people with us on the village itself, there is a wider need to bring the country with us and win the argument that, if we get the balance right, it will be a win-win rather than lose-lose situation.

Before I finish, I have a few further questions for the Minister about hydrogen more generally. Are the Government still on track to make a decision on heat by 2026? What will that decision look like? Will it unlock a hydrogen for heat industry in the UK, and unlock genuine choice for UK households in how they heat their homes in future? Can the Government match the ambition that has been expressed here about moving towards a hydrogen-based economy? Germany is investing 10 times the amount we are in the quest to deliver the same amount of hydrogen by 2030. I pose the question: is more support needed?

There could be more ambition in the number of hydrogen villages the Government can support. I do not see any benefit in the Government limiting the ambition to one hydrogen village trial. We will no doubt shortly hear about another one. Why not advance two schemes and double the learning? That would be in two different parts of the country, with two separate pieces of infrastructure. It seems the obvious way to go. The endless bidding wars and competitions that the Government specialise in do not always mean that the best projects succeed. They also mean that a lot of effort is expended on presentation, when we should all focus on delivery.

The potential of hydrogen is big enough to fit in two projects. If we do have a competitive process, I would be delighted if the Minister agreed to visit Whitby, possibly in July, to open the new customer centre, meet with Cadent and hear more about the hydrogen village project, as well as the many other innovative projects the company is delivering, not just to progress hydrogen for heat but in the wider hydrogen ecosystem.

I will conclude by saying why all this matters. I am sure we all want our planet to have a future, and I genuinely believe that we have the talent and innovation as a species to stop climate change overwhelming us. I am not so sure that we have the political will. It is through projects such as this that we will address that head-on and meet the challenge.

I want my constituency, because of where it is and because of its geology, history and industry, to be at the heart of this revolution, so that the people of Ellesmere Port can in future enjoy secure, well-paid jobs, on which they can raise a family, in a manufacturing industry that has enjoyed a renaissance, thanks to the advances we hope to make in carbon capture and hydrogen. I hope we end up living in a town where emissions have gone down but wealth has gone up, and that Ellesmere Port becomes a byword for innovation.

11:13

[Jacob Young (Redcar) (Con)]

It is a pleasure to serve under your chairmanship, Ms Bardell, and I thank the hon. Member for Ellesmere Port and Neston (Justin Madders). This will be a brief contribution, because I agree with everything he has just said. I do not know whether that will be politically unpopular for him. He is completely right that the HyNet project, led by Cadent, is helping to lead the world in the hydrogen revolution, just like the H21 project in Teesside and Yorkshire, led by Northern Gas Networks, and the H100 project in Fife in northern Scotland, led by SGN.

We must consider why hydrogen works as an alternative to other ways of decarbonising our homes. The hon. Member said that 85% of homes are connected to the gas network. We need to think of a way to decarbonise that. Let us be under no illusion that both ways end with significant costs, whether we go down the route of heat pumps in every home or hydrogen boilers, or a different one. Every way comes with a significant cost.

I should say that I am chair of the all-party parliamentary group on hydrogen, so I have a vested interest in this field. The reason I am so passionate about the hydrogen village project is that hydrogen represents an opportunity to take the consumer and the taxpayer along with us on the journey towards decarbonisation. With heat pumps, we will have to say to the owners of a terraced house in Middlesbrough, who are on a low income, that they will lose a large portion of their garden because they have to put a borehole in it for a heat pump; they will have to refit all their radiators; they will have to insulate the insides of their home differently; they will have to buy new furniture, because none of their furniture will fit anymore; and, on top of all that, we will charge them £5,000 for the pleasure, even with the Government grant. They will then have to change the way they heat their home altogether, because using a heat pump is more like using an Aga than a boiler. That is why I see hydrogen as representing an opportunity to decarbonise home heating, while taking the consumer along with us.

The hon. Member for Ellesmere Port and Neston mentioned the significant benefits of a hydrogen village project in Ellesmere Port. There are also significant benefits in doing it in Redcar, which is fast becoming the centre of excellence for green technology, whether it be carbon capture and storage, wind power, solar energy, hydrogen production or nuclear power—Hartlepool’s nuclear power plant is on the north side of the river. A hydrogen village project in Redcar will allow someone to wake up in a hydrogen-heated home, go to a hydrogen-heated college, then perhaps go for a swim in a hydrogen-heated pool at the local leisure centre, get a hydrogen-powered ice cream, and even visit the hydrogen-powered office of the MP, because my office in Redcar is included in the proposed trial area.

This represents an opportunity for us to demonstrate decarbonisation, while taking people along with us in the long run. The hon. Member for Ellesmere Port and Neston is right that next year we have an opportunity to decide between Redcar and Ellesmere Port, or we have the opportunity to choose both. That is my argument—it should not be an either/or. Ultimately, we do not want a hydrogen village in the UK; we want a hydrogen UK. To get to that stage, we need as much evidence as possible. To get that evidence, we need both Redcar and Ellesmere Port. We need the Government to focus on how we can take that forward for the whole of the UK. I commend the hon. Member for what he has said today, and I leave the Minister with that thought.

11:17

[The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (George Freeman)]

It is a pleasure to serve under your chairmanship, Ms Bardell. I thank the hon. Member for Ellesmere Port and Neston (Justin Madders) and congratulate him on securing this debate. I thank my hon. Friend the Member for Redcar (Jacob Young) for making some powerful points. We are on the cusp of an exciting opportunity for the hydrogen economy, and the pilot is about making sure that we get the infrastructure right to roll it out across the country.

I will start by framing our hydrogen commitments within the broader context of clean energy, and then deal with the specific points that have been made. I am responding today on behalf of the Minister for Energy, but also as the Minister for science, research and innovation. We see the hydrogen revolution in the heating of homes and the powering of vehicles—in particular heavy goods vehicles, trains and planes—as a fundamental part of our clean energy revolution. That is why, as Minister in charge of our science, research and innovation budget, I am strongly supporting the net zero transition and innovation. I say that as a former Minister of State in the Department for Transport, where, in addition to the electric vehicle revolution, we have now stepped up fast to support hydrogen roll-out in the transport sector.

That is all part of our green industrial revolution plan—the 10-point plan set out by the Prime Minster. The key commitment is to double our ambition of low-carbon hydrogen production to 10 GW by 2030. Further work is required to understand the feasibility, costs and convenience of transporting 100% hydrogen in the gas grid and using hydrogen for heating and cooking. That is what this trial is about. We want to establish the costs, logistics and practical issues as quickly as possible, so that we can then deal with them in a wider roll-out. We are working closely with industry, regulators and other stakeholders to deliver a range of research, development and testing projects for hydrogen heating.

Last year, I was pleased to see that HyNet North West, in north-west England and north Wales, which I know the hon. Member for Ellesmere Port and Neston has long championed, was selected to progress within track 1 of the industrial decarbonisation cluster sequencing process. That puts the region at the forefront of the industrial “SuperPlaces” we are supporting in this revolution. In the Government’s 10-point plan for a green industrial revolution, we set out the goal of supporting industry to deliver a neighbourhood trial by 2023, a village-scale trial by 2025 and a potential hydrogen-heated town before the end of the decade. Fundamental to our approach is the development of hydrogen hubs: centres of expertise that drive forward and accelerate the adoption of hydrogen as an energy source. The plans for a hydrogen neighbourhood trial are already under way, as colleagues know. That trial in Fife will supply hydrogen to around 300 homes, with hydrogen distributed through pipes laid parallel to the existing gas network. The trial of hydrogen for heat on a large village scale will be the first of its kind globally. It is a groundbreaking project.

It is an exciting time for the hydrogen village trial. Ofgem recently published its decision to take forward two proposals to the next stage of development. As my colleagues will know, Whitby in the Ellesmere Port area was one of the potential locations, alongside Redcar. The village trial will be led by the gas distribution network and will convert 1,000 to 2,000 properties to hydrogen instead of natural gas. Unlike the neighbourhood trial, it will involve the complete conversion of existing gas network infrastructure in the local area, repurposing it 100% for hydrogen.

We believe the hydrogen heating trials will encourage local employment opportunities and investment, along with the culture change that is required, as was mentioned by both the hon. Member for Ellesmere Port and Neston and my hon. Friend the Member for Redcar. The trials represent another opportunity for us to build back better with investment in green jobs and new technologies, while reducing the cost of energy for consumers. I understand that the hon. Member for Ellesmere Port and Neston is closely engaged with the proposal in his constituency, which is all to the good and hugely welcome. It is important that we support the proposals at this stage, because they have the potential to both generate the diverse, quality evidence that we need and drive that culture change.

Ofgem and the Department for Business, Energy and Industrial Strategy will assess final proposals for the networks in spring 2023 and make a decision on where the trial will be located. Without prejudice to my ministerial colleagues’ decisions next year, the points the hon. Member for Ellesmere Port and Neston and my hon. Friend the Member for Redcar have both made today about scale are well made and on the record, and I will pass them on.

We are working closely with Cadent and Northern Gas Networks, the gas distribution network operators responsible for the short-listed projects, to develop their detailed plans for the trial. Strong community engagement is key and I hugely welcome the comments of the hon. Member for Ellesmere Port and Neston in that regard. The gas distribution network operators are working with local consumers to encourage as many people as possible to participate in the trial. It is important for me to say that nobody would be forced to use hydrogen and nobody would be required to pay extra. I think those two messages will help drive public adoption.

I want to touch on consumer protection, because it is key. Our first duty must be to the safety of consumers, so before any community trial can go ahead, the Health and Safety Executive will need to be satisfied that it is safe. As with natural gas, measures will be needed to ensure that hydrogen is stored, distributed and used safely. As part of our world-leading research into the subject, we have gathered evidence on the safety of using hydrogen in homes. The BEIS-funded Hy4Heat programme has shown that the use of 100% hydrogen can be made as safe as natural gas when used for heating and cooking in the types of houses that were studied. However, research is one thing; practical roll-out in the real world is the key. That is why the pilot is so important.

I reassure hon. Friends and Members here, as well as those listening, that we are 100% committed to safety and that we want to make sure that protecting the rights and interests of consumers is at the heart of the trial. It is the first of its kind in the UK. We are therefore committed to a framework of additional consumer protections, which we set out in our consultation last year, including transparency of information, fair treatment and quality of service. We hope that they will enhance the existing protections in energy and consumer legislation, which already apply to consumers and will apply for the trial. We are clear that nobody taking part in the trial will be required to pay any extra.

With regard to multiple hydrogen trials, colleagues can see the logic of our next step, which is the village and neighbourhood trials. That combination, alongside the wider programme of research and testing that we are running, is designed to provide the Government with the necessary evidence to take big strategic decisions on heating within a matter of two or three years. I know the ambition that colleagues have shared today to go further and faster is shared by the Secretary of State, the Minister for Energy, Clean Growth and Climate Change, and the Prime Minister. It is not lack of political will that is holding us back; we simply need to make sure that we have the practical realities of roll-out and conversion of the gas network clear.

Colleagues have raised the issue of blue versus green hydrogen. I want to make it clear that our hydrogen strategy sets out the Government’s twin-track approach to supporting both electrolytic green and carbon capture-enabled blue hydrogen production. We see blue and green hydrogen as complementary and not as an either/or choice. Our new UK standard for low-carbon hydrogen production will ensure that the technologies we support—green, blue and other potential production routes—make a real contribution to our decarbonisation goals.

We are on track to make a decision on blending in 2023. We are exploring whether to enable the blending of up to 20% of hydrogen by volume into GB gas networks, and we are on track to make the policy decision next year, subject to the outcomes of the ongoing economic and safety assessments, and wider strategic considerations about the energy market. If the decision to proceed with blending is positive, we will look to start the legislative and regulatory process to enable blending, as well as the process to make any physical changes that are required to gas networks. Given the timelines on that work, officials do not anticipate blending on a commercial scale to commence before 2025.

We are looking to publish the hydrogen-ready boiler consultation as soon as possible—“in due course” is the official phrase. I cannot speak for my ministerial colleague, but I know that is very high in his in-tray. The consultation will consider the case for requiring newly installed domestic-scale gas boilers to be hydrogen ready, which would be a step change. The consultation will also include proposals to improve in-home boiler performance, building on the existing boiler efficiency standards of boiler-plus in England.

On manufacturers’ commitments to make hydrogen-ready boilers in the UK and sell them at the same cost, we absolutely welcome the commitment to maintain gas boiler prices at current levels in the case of a widespread roll-out of hydrogen-ready boilers. We look forward to working with manufacturers to ensure that that is possible at scale, because it is fundamental to adoption.

On the trade union debate about whether it is possible to achieve a large-scale workforce shift from boilers to heat pumps, we absolutely think it is possible. I was grateful to hear the hon. Member for Ellesmere Port and Neston, with his strong union background, make it clear that his unions are supportive of that. It is important that we send a signal that this is not a massive challenge, but a part of the upskilling of our broader workforce and economy. Existing heating engineers can train reasonably simply to install heat pumps in one week or less, and thousands of new heating engineers have already seized the opportunity to learn those skills.

I reiterate my thanks to the hon. Member for Ellesmere Port and Neston and my hon. Friend the Member for Redcar for raising the issues today. I hope they can see how committed the Government are to making sure we protect consumers and get the practical logistics right. They would be the first on their feet if we rushed into something that had not been properly thought through. We want to make sure that the trials lay the foundation for a wider nationwide roll-out. The aim is not to have one or two world-class trials; the aim is to prove what we need to do to roll out hydrogen at an industrial scale across the country as part of our net zero targets.

As was outlined in our consultation last year, we are including legislative measures to facilitate the trials in the landmark energy security Bill. I very much look forward to working with colleagues here. More importantly, the Energy Minister looks forward to working with colleagues across the House as the Bill goes through Parliament. This is an exciting time not just for the UK hydrogen economy, but for the communities that are in the vanguard, and we are keen to make sure that that public support continues to grow.

Question put and agreed to.

11:28

Sitting suspended.