- Building Energy Management
- Home Energy Management
Hydrogen's Potential in Building Heating Is Limited
Hydrogen has been gaining attention as a clean-burning fuel of the future for heavy transport. However, as hydrogen production begins to scale, new pilot studies demonstrate another use case for hydrogen as a heating source in buildings. This presents a new, low carbon product for gas companies to sell using existing distribution infrastructure. However, the carbon reduction potential of this use case is limited. Hydrogen may eventually become cost-competitive with electrified space and water heating, but it will likely struggle to integrate ancillary benefits such as building digitization and grid-tied load management.
New Hydrogen Pilots in Buildings
Two recent pilots are demonstrating two approaches to building heating. The first relies on injecting hydrogen into existing gas networks at Keele University in Staffordshire, UK, producing a 20% hydrogen and natural gas blend which is heating 100 homes and 30 faculty buildings. The second is a centralized project called H2-Fifty, a collaboration between Nouryon, BP, and the Port of Rotterdam Authority on a 250 MW hydrogen facility. It has additional partners proposing 300 MW of additional capacity. This would distribute the residual heat to about 500,000 households by 2030, with 1 million possible by 2050.
Limited Potential in Building Heating
Hydrogen’s competitiveness in buildings depends on the level of analysis. At the distribution level, hydrogen-gas blends can lower decarbonization costs because they don’t require changing pipe networks or household heating systems. The polyethylene pipe upgrades many gas companies make are non-reactive with hydrogen. At the site level, however, hydrogen has to be weighed against the cost of other retrofits in buildings. Building envelope improvements save kilowatts generated, making them a better investment with more impact in almost any instance.
Electrified appliances may not be better. According to Power Magazine and the Hydrogen Council, the costs of hydrogen production and boilers are falling, with the latter projected to fall between $900 and $1,600 per household per year by 2030, on par with natural gas boilers. When considered with the significant panel upgrade costs these incur, especially in older buildings, hydrogen can look better in many circumstances. This changes when considering that electrified end uses are the easiest to connect with low cost renewables, digitize, and manage within grid-scale demand response and load shifting programs. Like natural gas, hydrogen would be siloed from renewables such as onsite solar and storage, restricting the value chain and efficiency resource at utility scale. Piped hydrogen would also have the same system resilience vulnerabilities as the natural gas infrastructure it relies upon, whereas distributed energy resources can provide off-grid capability.
The district heating approach does have a combined value chain, with residual heat transferred to buildings, not hydrogen itself. However, this approach relies on proximity to large centers of industrial hydrogen production, a major obstacle to scaling across the building stock. For these reasons, hydrogen’s effectiveness as a heat source for buildings seems limited in comparison with electrified alternatives. For more information on hydrogen’s other applications in generation, transportation and other sectors, see Guidehouse Insights’ Hydrogen Innovations service.