Hydrogen can be produced in a number of ways, with each process dictating how environmentally friendly the hydrogen is.
‘Green hydrogen’ is produced by splitting water using renewable electricity in an electrolyser. Oxygen is the byproduct of this process. This is the production method preferred by Firstgas for use in our gas networks.
Hydrogen produced from natural gas or coal through steam methane reformation, or autothermal reformation, releases CO2 and is called ‘brown’ hydrogen. If the CO2 is captured and sequestered (CCS), then it becomes low carbon and is called ‘blue’ hydrogen.
Finally, hydrogen can be a by-product of industrial processes without CCS. This is called ‘grey’ hydrogen.
An electrolyser is a device that uses electricity to break water into hydrogen and oxygen in a process called electrolysis. There are three main types of electrolyser: alkaline electrolysis, proton exchange membrane (PEM) electrolysers, and solid oxide electrolysers. These range in size and function, from small industrial plants to large scale facilities that can deliver hydrogen into gas pipelines. The electricity used by electrolysers can either come from the electricity grid or from purpose-built renewable electricity generation sources, such as wind turbines.
Just like natural gas, LPG and petrol, hydrogen safety is about understanding how the gas behaves and how to handle it. Hydrogen has been well studied and there is already significant evidence on safe handing. Gas networks have been running safely in New Zealand for almost 50 years and we are confident that Firstgas Group can adapt to the safety requirements of this new gas.
Because it’s much lighter than air, hydrogen dissipates quickly when released, allowing for relatively rapid dispersion of the fuel in case of a leak. Hydrogen is also non-toxic.
With hydrogen seen as an important component of zero carbon energy systems across the globe, there’s a huge amount of activity going on internationally. It’s hard to put it in a nutshell, but over 30 countries currently have a national hydrogen strategy in place and $70 billion of funding has been committed globally over 228 ongoing projects[19].
Of these projects, there are a number that are extremely relevant to Firstgas, all of which we’re following closely:
Hydrogen can be burned like natural gas or used in a fuel cell to generate energy. It offers the same storage and flexibility benefits as natural gas, but can be used in a zero-carbon economy. Firstgas Group is exploring other zero-carbon gases such as biogas (biomethane) and bioLPG. However, hydrogen can currently be produced at a greater scale than other zero-carbon gases, which means it can drive greater decarbonisation of gas use.
Yes. Based on our current transition plan there will be no minimal changes before 2035, because most existing equipment can run on blends of up to 20% hydrogen. After then, we’ll start progressively converting our networks to 100% hydrogen, and you’ll need to move to gas appliances or equipment that are ‘hydrogen-ready’.
Appliance manufacturers are already bringing hydrogen-ready appliances to market. We anticipate these will be available in New Zealand soon, so by the time you need to upgrade you’ll be able to prepare for the change.
LPG equipment is not connected to our natural gas transmission or distribution networks. We’re currently investigating how to provide our Rockgas LPG customers with zero carbon LPG equivalents, such as bioLPG. Find out more here.
We’ll start live network trials of a blend of hydrogen within the next year. This will help us work towards our plan of introducing a blend of hydrogen into our existing gas networks from 2030 – gradually increasing from 1% to 20% hydrogen by 2035. Because most appliances won’t be affected by up to 20% blends of hydrogen, we don’t anticipate any changes being required. However, after 2035, homes and businesses will need to move to hydrogen-ready appliances and equipment, which for the most part may happen as part of their regular maintenance and upgrade programmes.
There will be no change to gas connections until we start to convert the networks to 100% hydrogen – which won’t happen until after 2035. This will require technician intervention – just as we did when we switched from the ‘town gas’ made from coal in the 1970s. When we come to plan the final conversion strategy, we’ll work closely with homes and businesses to plan connections and minimise disruptions.
Our research so far shows that most appliances, from heating to home cooking, won’t be affected by blends of up to 20% hydrogen. However, your existing appliances may not operate at levels of more than 20% hydrogen, so will therefore need to be replaced as the gas grid transitions from 20% to 100% hydrogen between 2035 and 2050. Given this long timeframe, we expect many appliances will be able to be replaced as a part of their natural retirement cycle.
Appliance manufacturers will be bringing hydrogen ready appliances to market that will work through the transition. We anticipate these will be available well before any changes are required.
If you’re building a new home, you can still connect to natural gas or LPG. Gas services will continue for the foreseeable future while the gas industry works with the government to transition to supply renewable, low carbon gas to our customers.
No. Green hydrogen is currently only produced and used in small scale, specialised commercial operations within New Zealand. We expect that production to ramp up over the coming years and we’ll make sure we can safely transport it to you through our networks.
Yes. Firstgas Group has a hydrogen barbecue that cooks excellent sausages! At the moment it’s rather niche, but is developing rapidly. Appliance manufacturers are scaling up the production of hydrogen-powered appliances for homes and businesses, and these will be more widely available in the coming years – especially given the pace of developments overseas.
Manufacturers are also developing hydrogen-ready appliances that will work on natural gas now and transition to hydrogen as it’s introduced. Plus, hydrogen cars and trucks have been imported to New Zealand and are already available.
Firstgas Group has acquired a number of assets and businesses that have been at the forefront of innovation in New Zealand’s energy sector for nearly forty years. Through our leading companies Firstgas, Rockgas, Flexgas and Gas Services New Zealand, we have the future of gas in our sights – while ensuring Kiwis get the natural gas and LPG they need today, safely and reliably.
In May 2019, Firstgas Group began exploring how hydrogen might be used in our existing gas pipeline networks, as part of a low carbon energy system in New Zealand. To inform our hydrogen trial programme, we commissioned a technical desktop study from UK based consultants Aqua Consultants and Element Energy – both of whom have significant experience in the gas sector and in hydrogen projects across Europe.
The study was supported by government funding managed by the Provincial Development Unit, and co-funded by Firstgas.
The Hydrogen Trial has set a solid foundation for Firstgas’ future work on hydrogen. Not only does it provide a concrete platform for our testing and development programme, but it helps us paint the picture of a net zero carbon emissions future for potential hydrogen producers and users.
In 2021 we’ll begin design work on a live physical trial using pipelines best suited to a hydrogen blend. Starting with a small amount of hydrogen (1% by volume), we’ll build to 20% hydrogen over the trial period. We’ll also confirm what we know about the materials that make up our networks, as well as those of other distribution owners, the appliances connected to them, and how they all work with hydrogen blends and 100% hydrogen.
Unfortunately, electricity won’t be able to decarbonise all parts of our economy – especially when it comes to heavy transport and high temperature process heat. Using a combination of renewable electricity and zero carbon hydrogen will allow us to decarbonise all aspects of our economy. Hydrogen can also help build our renewable electricity potential by storing electricity generated at times of low demand (which would otherwise be wasted), and converting it back to energy to use during dry years and peak times.
Firstly, electricity isn’t going to be able to decarbonise all parts of our economy, so we need something else to complement it. That’s where hydrogen and other green gases can help.
Secondly, it’s about economics and energy storage. Hydrogen can make renewable electricity more economic by storing what’s produced at off-peak times and using it either for parts of the economy that can’t use electricity to decarbonise, or converting it back to electricity when required.
The fact is that electrical efficiency doesn’t always create economic efficiency. We need to consider the associated infrastructure costs of electricity, as well as its ability to get the job done – especially in parts of the economy that require really high temperatures, such as the steel making industry or heavy freight movements, such as the trucking industry.
Yes, these electricity-based technologies are great and will go a long way to storing our excess renewable electricity until we need it. However, there’s a limit to these technologies. Natural gas currently fills, with very little notice, the supply shortfalls created by weather (when hydro lakes are low and it’s not windy) and seasonal dependency of renewable sources, such as solar panels needing enough solar rays in the middle of winter. Hydrogen can be used in the same way to maintain the security of the energy and allowing our electricity system to keep going year round.
Storing excess renewable energy as hydrogen until it’s required also increases our energy independence: we’re able to use our resources to their fullest and reduce the need to import energy from overseas.
All studies agree that we’ll need to generate much more electricity than we currently do if we want to reach net zero carbon emissions by 2050. Hydrogen can help make the generation of electricity much more affordable by storing energy to use in times of peak demand.
Because electricity needs to be used as it’s generated, there’s sometimes surplus renewable electricity that can’t be used. This surplus can be stored in the form of hydrogen. Hydrogen can then be used to generate electricity when lake levels are low, the wind isn’t blowing, or the sun isn’t shining to power our solar panels. Using hydrogen to store energy maximises our use of renewable electricity generation and therefore improves its efficiency.
In line with Transpower’s Whakamana i Te Mauri Hiko report, our study represents a significant increase in electricity demand compared to today. The generation build required is massive and would require over 1GW of additional electricity generation capacity to be built per year. Just under half of the electricity demand in 2050 would be for generation of hydrogen. Our study presents a view of how to decarbonise our energy using hydrogen and is one of the potential futures for New Zealand. In this way, it contributes to the integrated energy discussion we need to have to get to net zero by 2050.
The operation of electrolysers (the devices that use electricity to break water into hydrogen and oxygen) requires around 12 litres of potable water per kilogram of hydrogen.
At most, our projections suggest that annual water demand could increase up to 13 million cubic metres per annum by 2050. As a comparison, this increase is equivalent to:
The largest contributor to the cost of hydrogen is the cost of electricity, followed by the cost of the electrolysers used to produce hydrogen. Our study forecasts that, by 2050, hydrogen will cost around $3.25/kg in real terms[AO7] . This is in line with higher-end predictions of the natural gas price in 2050.
Because the cost of electricity is a key factor in the price of hydrogen, it’s difficult to directly compare the forecasted costs of the two. When we take into account the diversity benefits of hydrogen, as well as its potential to decarbonise high-temperature processes and heavy transport more cheaply than electricity, it’s easy to see the economic benefit in using a combination of hydrogen and electricity to decarbonise.
Firstgas Group is the owner and operator of New Zealand’s gas pipelines. We anticipate that as we decarbonise and the market for hydrogen grows, it will become more attractive for other companies to generate hydrogen.
As hydrogen is gradually introduced to our pipeline networks, natural gas will be displaced over time. Anything up to a 20% blend of hydrogen isn’t expected to require any changes to the existing natural gas system or appliances. However, after 2035 we’ll start to convert sections of our network to 100% hydrogen, which will mean changes to both gas appliances and to our network. The important thing to remember is gas won’t be suddenly ‘switched off’! We will do our best to transition to low carbon gas will happen gradually over the coming three decades, and we’ll make sure Kiwis have access to gas at all times.
LPG appliances are not connected to the natural gas network, so won’t be impacted by the work we’re currently undertaking. Firstgas Group is investigating other ways of decarbonising LPG, such as bioLPG. Find out more here.
There are a number of gases that we’re exploring at Firstgas Group. Hydrogen, biogas (biomethane) and bioLPG are all produced in different ways, with different inputs and different ways of being used. Our Hydrogen Trial Study focuses on green hydrogen, as it has the lowest emissions and can be produced at a scale that can displace the use of fossil fuel in many parts of our economy.
Our initial study projects that our existing transmission (high pressure) network has enough capacity to transport the required hydrogen demand. We’ll need to make some changes to our compressors, as hydrogen requires electrolysers to inject it into the network at pressure and distribute it across the North Island.
Our distribution (low pressure) networks may require some minor reinforcement so they can deliver enough hydrogen to customers. But, the good news is that most of these networks are made of high-density polyethylene (HDPE) components, which are compatible with hydrogen.
We also know some metals can become brittle when exposed to hydrogen, and this could include the high strength steel that makes up around 30% of our transmission network. We’re keeping a close eye on international research and expect to have more certainty by 2023. However, because the transition to hydrogen will occur slowly over time, we believe any required changes to our network can be done as a part of our ongoing network renewal program.
