Learnings

Outcomes

General conclusions

•         The transport sector is currently reliant on oil-derived fuels; however, alternative technologies are generally more expensive than traditional fuels so far

•         Final energy demand for UK transport will significantly fall, despite an increase in travel, due to improvements in energy efficiency linked to the electrification of road vehicles

•         Hydrogen demand in transport is forecast to reach ~79 TWh in 2050, but electricity will hold the main share of sustainable options

•         Investment in infrastructure is critical as an enabler, such as hydrogen refueling stations, pipelines and storage facilities

Transport modes

•         Road: Will be dominated by electricity (BEV), with a not negligible share of hydrogen expected for HGV and buses. Biofuel will have a transitory and limited role while e-fuel won’t be used 

•         Rail: Will be mainly electrified, with small penetration of hydrogen where electrification will not be economically or technically possible

•         Aviation: Sustainable aviation fuel will be key to decarbonising aviation. First, biofuel will be used due to lower costs, but long-term sourcing limits will favour synfuel demand. Hydrogen will play a role in the long term

•         Shipping: future is uncertain, with LNG having a transitory role. Methanol and ammonia will compete if economies of scale are achieved. Pure hydrogen will not be technically feasible

Recommendations for National Gas

•         Explore opportunities for use of H2 and its derivatives in the transport industry in the regions with the highest future potential for H2 demand: Scotland, North West, East of England, London and South East 

•         Engage with stakeholders in the key transport projects and clusters, where H2 demand is most likely to be adopted soon because of existing initiatives

•         Invest in infrastructure development in areas of high potential but where grid is far from key offtakes: Felixstowe, Channel tunnel, Glasgow, and Liverpool cluster 

•        Include other key transport stakeholders as opportunities for engagement, namely OEM and transport players, to enable the creation of projects/trials around identified opportunities

Value tracking                                  Data Point                                        Data Point Definition 

Maturity                                            TRL2-3 

Opportunity                                     100% or multiple asset classes        Should transport sector opportunities be realised, then this 

would potentially impact all NTS assets and potential incur new build to link up transport clusters.  

Deployment costs                            >£0                                                   Not known and will depend on the opportunity.

Innovation cost                                £260,760                                           The project costed £260,760 to run, follow on projects are being 

explored.

Financial Saving                                -                                                        Not known

Safety                                               -                                                        Not a focus of this project.

Environment                                     -                                                        Not a focus of this project, however, the progression of Project 

UNION requirements and how the NTS can support the decarbonisation of transport will have inherent CO2 benefits.  

Compliance                                       Support compliance                         There is limited regulatory impact at this stage

Skills & Competencies                     No change                                        - 

Future proof                                     Supports business strategy              This project is a starting point to progress further understand of 

future business and decarbonisation opportunities within the transport sector.  Further projects will spring from this work and will support NGTs business development strategy as well and inform Project UNION in identifying potential new transport clusters and customers. 

Lessons Learnt

There was feedback and learning created as part of the project “Identification of NTS opportunities in the transport sector. We have summarized a few of the key learning points below: 

WP1: The Transport sector is the largest energy consumer in the UK, consuming over 40million tonnes oil equivalent in 2021 (source: Department for Business, Energy and Industrial Strategy “Energy Consumption in the UK (ECUK) 1970-2021") and since 2010 the growth of transport energy demand has been stable, but consumption was significantly affected by Covid-19. The H2 ecosystem is developing, with more than eighty projects targeting the transport segment. Many projects are in Scotland, due to the favourable renewable energy conditions for wind offshore and onshore. Typically, the most relevant projects for transport are part of clusters with industrial and residential offtakers and aim to produce both green and blue hydrogen. 

WP2: Final energy demand in the UK will significantly fall over the upcoming decades, despite an increase in travel, due to an acceleration of energy efficiencies linked to the electrification of road transport. According to BIP’s BASE penetration scenario, hydrogen demand could reach up to 79 TWh in 2050, with high penetration in aviation and shipping through H2 derivatives and in long haul road transport use cases such as heavy goods vehicles and buses. The tipping points at which hydrogen becomes competitive from a TCO perspective with respect to the status quo (jet fuel, gasoline/diesel, and heavy fuel oil) are varied across sectors and between the different use cases analysed. Hydrogen applications in the road and rail sectors will be the first to reach cost parity, but faster competitiveness of electric alternatives will limit their penetration in these transport sectors. If we look at the percentage penetration in 2050 of each fuel in each transport segment, we note that aviation and shipping will heavily rely on fossil fuels, rail will be highly electrified, road sector is more inclined towards electrification, although buses and HGVs have good potential for hydrogen (especially in long-haul use cases). If we split the demand for hydrogen across the UK regions, we see that Scotland, East of England, London, Southeast, and Northwest are likely to be the regions with the highest demand for hydrogen and hydrogen derived fuels. However, whilst the UK might become a net exporter of hydrogen, amongst the regions the different supply/demand balances imply the need to move hydrogen from some regions to others: Scotland, Yorkshire & Humber, and East of England could be key exporter regions. 

WP3: Several transport stakeholders, especially transport operators and infrastructure players, are already involved in hydrogen initiatives and might be interesting as future collaborations for National Gas Transmission. 

WP4: More than fifteen opportunities spread across the four regions have been identified. Clusters are grouped around ports, airports, while rail has been addressed as a single opportunity for hydrogen development according to the Network Rail Traction Decarbonization Strategy. The opportunities to be prioritised by National Gas Transmission are those that have both a high pace of adoption of hydrogen technologies and that also have a high potential demand outlook. Moreover, the proximity to the NTS of each cluster and offtaker has been assessed to provide an insight into the potential requirements to expand the current NTS network to seize such opportunities.