UK markets closed
  • FTSE 100

    -4.43 (-0.06%)
  • FTSE 250

    -80.35 (-0.41%)
  • AIM

    -0.18 (-0.02%)

    +0.0006 (+0.05%)

    -0.0021 (-0.17%)
  • Bitcoin GBP

    -1,488.27 (-2.78%)
  • CMC Crypto 200

    -25.58 (-1.80%)
  • S&P 500

    -19.03 (-0.38%)
  • DOW

    -149.53 (-0.39%)

    -0.40 (-0.48%)

    -5.40 (-0.23%)
  • NIKKEI 225

    +907.92 (+2.42%)

    +372.34 (+2.21%)
  • DAX

    -48.95 (-0.27%)
  • CAC 40

    -13.92 (-0.17%)

Hydrogen fuel could double your energy bills - and isn’t as green as you think, research warns

Hydrogen fuel could double your energy bills - and isn’t as green as you think, research warns

Heating Europe with hydrogen gas could double energy bills, a new study has warned.

Hydrogen - which can be produced by superheating water - is often touted as a green alternative to fossil fuels.

But switching European customers to the gas would cost €240 billion, investigative NGO Global Witness has warned - a bill that gas companies plan to pass on to consumers.

Renewable energy is a far cheaper and more environmentally-friendly option, Global Witness say.

“Europe does need to stop using gas, but there is a better alternative to hydrogen: energy savings and home heating sources such as heat pumps and district heating using renewable electricity,” the NGO said.


What is hydrogen fuel?

When natural gas is burnt as a fuel, it produces heat energy - and climate-wrecking carbon dioxide.

‘Burning’ hydrogen doesn’t release this greenhouse gas, making it a potential green energy fuel.

But it’s not so simple. Hydrogen can be produced in a number of ways, like by splitting water into oxygen and hydrogen atoms. But this production needs energy - and 96 per cent of hydrogen fuel is currently produced by burning fossil fuels.

This is why you might have heard of ‘green,’ ‘blue’, and ‘grey’ hydrogen fuel. Green hydrogen is produced using renewable energy. Blue hydrogen is produced by fossil fuels, but the CO2 is captured and stored. Grey hydrogen is produced by fossil fuels and the CO2 is released into the air.

Is hydrogen gas expensive?

As countries slowly commit to phasing out oil and natural gas, fossil fuel giants are starting to pivot to hydrogen gas.

They favour the technology because of its similarities to natural gas; it is also burned to produce energy and is transported by pipe.

But the switch won’t come cheap.

At the end of 2021 - the last period for which data is available - Europeans spent an average of €67cents per kilowatt hour of energy.

Russia’s war in Ukraine has since pushed up gas prices - but hydrogen doubles the cost of this pre-war bill.

Global Witness estimates that households will spend an estimated average of €12.5cents per kilowatt hour of hydrogen energy by 2050.

For a medium-sized house, this would represent an annual household hydrogen bill of €1,580 (inflation discounted).

The organisation bases this estimate on the cost of building and operating hydrogen infrastructure - costs that would tally a €240 billion bill over 40 years.

This mammoth charge would cover the new gas pipelines required to transport the fuel. If costs like storage and electrolysers - the technology that creates hydrogen gas from water - are accounted for, the costs mount further.

Other studies have supported this conclusion. According to a study released this month, green hydrogen will be between two and three times more expensive than electrification for heating homes.

So who’s going to foot the bill?

Do gas companies want customers to pay for the hydrogen transition?

Gas companies have lobbied the European Commission to make current gas consumers - even those who don’t plan to switch to hydrogen - cough up for the switch.

In 2021, the EC requested consultation on its ‘gas package.’The German Gas and Water Association (DVGW) - which counts nearly 1,900 utilities as members - argued that ‘all current gas-end users’ should have to pay for the new infrastructure.

This position has been echoed by Southern Germany’s Erdgas Schwaben DSO, and Italian lobby group ANIGAS. It is also supported by many transmission system operators - the companies who run the gas pipelines.

The draft gas package proposal - released in December 2021 - states EU countries may allow companies supplying hydrogen to share infrastructure costs between their hydrogen and gas consumers. Such costs cannot, however, be shared forever, and could only be charged for “one third of the depreciation period of the infrastructure concerned.”

Some hydrogen fuel is produced by renewable energy - but most is still produced by burning fossil fuels. - canva

What energy source is better than hydrogen?

To meet its climate goals, Europe needs to turn off the fossil fuel tap.

For heavy industries and large transportation sectors - shipping, long-haul air transport - hydrogen fuel might be the best alternative.

But households should rely on renewables instead, Global Witness advise.

“It is clear that for households, switching to hydrogen would make Europeans already facing energy poverty even poorer,” the report urges.