Operators of gas distribution grids need to prepare for a “disruptive end to their business model” with net-zero scenarios seeing very limited use of hydrogen in heating buildings, according to a new study from German think-tank Agora Energiewende. The report points to an emerging consensus concluding “that the role of hydrogen for climate neutrality is crucial but secondary to direct electrification”, with green hydrogen to be used to decarbonise industry, shipping, aviation, “and firming a renewable-based power system.” But it says green hydrogen will see very little use in heating for buildings, leading to “a disruptive end” to the business model of gas distribution grids.
And despite lobbying efforts by gas distribution companies aimed at ensuring their longevity by promising a transition from gas to hydrogen, the report concludes that “there is no credible financing strategy” for hydrogen use by households. “Blending is insufficient to meet EU climate targets and carbon prices high enough to deliver hydrogen heating would be unacceptable for customers,” the report says. According to the report, even a 20% renewable hydrogen blend by volume into the gas grid would raise the price of wholesale […]
