As part of the hydrogen hype, natural gas utilities are trying to convince themselves, cities, policymakers, and homeowners that they will simply replace the natural gas with hydrogen, switch out some appliances, and everything will be peachy. Scotland’s SGN is promising to convert as many homes in Fife who opt in to hydrogen.
But there’s a problem. Converting a home to hydrogen would likely cost the homeowner well over $100,000 USD in excess costs over the 15 years of the lifetime of appliances if they were paying for it themselves, and inevitably, they will be.
Hydrogen is much more expensive than natural gas per gigajoule (GJ). Right now, a GJ of natural gas costs about $4 USD delivered to residences where I live. In the USA, the measure that they use is “thousand cubic feet,” and a gigajoule is 947.8171 cubic feet, so it’s roughly comparable in terms of energy. California’s delivered residential gas is apparently quite a bit more expensive than Canada’s, around $14 dollars USD. We’ll average it out at $10 per gigajoule delivered for this purpose.
Hydrogen’s average retail cost for filling up in California is $15.61 USD per kilogram, not GJ. Paul “#hopium” Martin has coined a phrase, the First Sin of Thermodynamics, which is: “Though shalt not compare two kinds of energy just because they have the same units,” but when it comes to using two different gases to burn for heat, the same units actually make sense, so we’ll get them into the same units and compare.
That’s for gray hydrogen, by the way, made from natural gas and dumping the 8–10× of CO2 into the atmosphere. Hydrogen doesn’t exist in a free state. It has to be manufactured. If manufactured from natural gas, every ton of hydrogen produced also produces 8–10 tons of CO2. If manufactured from coal, 20–35×. If manufactured from water using renewable electricity, it throws away 50% of the renewable energy to make it and distribute it.
The wholesale cost of gray hydrogen in California is $2 USD per kilogram right now, so it’s getting the hydrogen to the pump, the cost of the pump, and the cost of running the storage and pumps that is making it 8× the cost. Lazards’ LCOE for hydrogen makes it clear that the wholesale cost of “blue” or green hydrogen will be double or triple that of gray hydrogen. Assuming that piping is cheaper for hydrogen in the future, we can expect the retail cost to drop to $10 per kg delivered, even when the wholesale cost of hydrogen doubles due to CCS (failure mode) or green hydrogen electrolysis, factoring all of the variances in, most of which are detailed below.
The energy in a kilogram of hydrogen is about 0.12 GJ, so the cost of a GJ of heat delivered to homes at retail costs will be in the range of $83 USD. That’s about 8 times more expensive for a unit of heat. With a lot of effort, it might only be 6 times more expensive for a unit of heat, but the wholesale price of hydrogen is going up regardless of how we decarbonize it, and everyone in the supply chain will need to make a profit, so I’m comfortable with 8×.
At the average price of $10 per gigajoule of natural gas, heating a home for a year would cost about $880. Heating with hydrogen instead would cost just over $7,400 per year, about $6,500 more. That’s enough to pay for the heat pump in the first year, and get air conditioning from the heat pump too, and pay for all the electricity costs for heating and cooling.
Then there are utilities’ urban gas distribution networks. Hydrogen is much smaller and slipperier than natural gas. Natural gas distribution networks leak all the time. The first major problem is that hydrogen will leak a lot more. Substantial retrofit costs to plug a lot more leaks than they bother to plug today, where venting high global warming potential methane to the atmosphere is considered acceptable losses. Venting 8× more expensive hydrogen to the atmosphere will change the economics of that very rapidly.
The next problem is that the pumps in natural gas systems are hard steel, and hydrogen embrittles hard steel. All the pumps have to be replaced, even if the plastic piping in modern urban utilities’ distribution systems might be fit for purpose. Capital costs will come from rate payers, possibly as a special levy for a decade or two. That will probably be over and above the 8× costs.
The next problem is that hydrogen is harder on electronics than natural gas, so most of the sensors in the system have to be replaced too, along with technicians’ kit.
The next problem is that hydrogen being much less dense, it takes 3× the energy to push it through pipes as natural gas. That’s in the rough approximation of 8× the cost delivered per GJ, so I’ll just say that utilities will be getting that money from ratepayers if this silliness ensues.
The next problem is that people living with natural gas are already living with a bunch of risks that they think are normal. These includes gas explosions which kill them and their families, gas leaks which simply cause fires which burn their houses down, carbon monoxide poisoning from incomplete combustion of natural gas which can kill them or their families or simply leave them with severe brain damage, and finally nitrous oxides which cause indoor air pollution leading to cardiovascular problems.
Hydrogen only eliminates the carbon monoxide risk. All the other risks persist. A lot of careful engineering and building codes work has been done to make natural gas safe for use in homes and buildings, and has to be redone with inevitable mistakes for hydrogen. Lots of bureaucracy, and an increased incidence of failures over a few years until it gets sorted out. Anyone accepting hydrogen appliances in the first couple of decades is accepting higher total risks, and probably higher insurance costs. Actuaries are going to start with an assumption of higher risk until proven otherwise, so probably higher premiums, but I won’t estimate them.
The next problem is that hydrogen furnaces and stoves don’t exist outside of prototypes. None are manufactured and sold today. None of your current gas appliances will work with hydrogen. Once again, hydrogen is harder on hard steels and electronics, and the burning characteristics are different. Getting a gas stove to work with hydrogen would require replacing almost everything inside the gas stove. Getting a gas furnace to work with hydrogen would require replacing almost everything inside the furnace. And while they are at it, they might have to replace all the natural gas lines inside your home. No one is going to refurbish existing units at great expense. They’ll be replaced with new manufactured units because that’s the only way to get the costs down out of the stratosphere.
But now we’re talking about brand new appliances that don’t exist, aren’t sold by the hundreds of thousands yet, and have no supply chains. Can you imagine how much those suckers are going to cost? My gut tells me that they would be 2× the cost of average current appliances for a decade or two if this silly idea takes hold. Gas furnaces cost an average of $4,500 USD, so call it $9,000 USD for your new hydrogen furnace. Gas stoves cost an average of $1,000, so call it $2,000.
In addition to the $6,500 annual increase in fuel costs, you’ll have a capital cost outlay in the $11,000 range.
Here’s your choice: Pay about $4,000 for a new heat pump including installation. Get rid of your gas furnace and your air conditioner (if you have one). If you have a gas stove, pay another $1,000 for an induction stove top, and another $500 for induction compatible cookware (you probably need new pots and pans anyway). Total capital cost is $5,500, half the cost of hydrogen appliances. But you are getting heating, cooking, and air conditioning for that capital outlay, instead of just heating and cooking.
Your heating bills go up by perhaps $300 per year with the heat pump because, while they are very efficient, natural gas is absurdly cheap because we use the atmosphere as an open sewer for carbon dioxide and nitrous oxides, both of which are greenhouse gases. Your risks from natural gas — explosions, fires, carbon monoxide, nitrous oxide — disappear. Your maintenance costs go down a lot because you have one climate control technology instead of two, and electric appliances are lower maintenance than gas ones.
Or pay $11,000 for new hydrogen appliances, about double the heat pump and induction stove, and $6,500 more in heating costs per year for the rest of those appliances’ life. That’s over $100,000 USD more for your hydrogen over the 15 year lifespan of furnaces and air conditioners than if you just switched to electricity, 11× the total cost of ownership.
There is no future for residential heating with hydrogen, and the economics of it are crystal clear, so you really have to ask yourself who is trying to sell this absurd idea. And why. When gas utilities like Scotland’s SGN says they will convert the small town of Fife to hydrogen furnaces and stoves, they are trying to pretend that the brutal economic reality of the situation doesn’t exist.