Heat pumps ‘up to three times cheaper’ than green hydrogen in Europe, study finds

“Green” hydrogen, made by splitting water with low-carbon electricity, is unlikely to emerge as a cheap replacement for gas boilers in homes across Europe, according to a new study. 

The research, published in the journal Energy Conversion and Management, concludes that a green hydrogen heating system would be roughly “two to three times more expensive” than one relying on electric heat pumps in the EU and UK.

Decarbonising heat is a key goal for governments seeking to hit their climate targets and end their reliance on expensive gas, amid a global energy crisis. 

Heat pumps have been widely accepted by experts as the primary option for cutting the sector’s emissions. However, gas-industry lobbyists and conservative politicians in the EU and UK have continued to make the case for hydrogen.

The new study explores a range of scenarios for cutting emissions from Europe’s heating systems. It concludes that a low-carbon transition that keeps costs down without causing excessive environmental damage is “only possible through electrification via heat pumps”.

It found that “blue” hydrogen, which is made using gas with carbon dioxide (CO2) captured, would have been a cost-effective option for a small proportion of properties, based on gas prices at their pre-crisis levels.

However, the high gas prices driving the global energy crisis would likely make heating buildings with “blue” hydrogen “less cost-competitive”, one of the study’s authors tells Carbon Brief.

Setting boundaries

Most heat in European homes is generated using fossil fuels, meaning residential heating is responsible for around 13% of the EU and UK’s greenhouse gas emissions.

Several EU member states and the UK have so far announced phaseout dates for the installation of fossil-fuel boilers. Responding to the recent surge in gas prices, the European Commission has proposed a ban on new fossil fuel-only heating systems by 2029.

Governments are, therefore, searching for the best low-carbon alternatives to fossil fuels in heating. 

In the paper, ETH Zürich researchers Dr Till Weidner and Prof Gonzalo Guillén-Gosálbez model 13 scenarios for decarbonising heat in the 27 EU member states and the UK by 2040. They explore the cost – a key issue for politicians and consumers – and also environmental impacts of each scenario. 

The authors assign European heating a share of the world’s remaining carbon budget, freshwater, land use and other resources based on the concept of “planetary boundaries”. If a scenario exceeds its share it is deemed to be breaching those boundaries 

Guillén-Gosálbez tells Carbon Brief that this focus is what makes their research novel. “Previous studies focused more on economics and much less on the environmental angle,” he says.

Their scenarios account for the life-cycle impacts of different low-carbon heating technologies, notably heat pumps and hydrogen.

Expensive hydrogen

Hydrogen comes with various costs and benefits that depend on how it is produced.

Most low-carbon hydrogen is either “green” – made using low-carbon electricity – or “blue”, meaning it is extracted from gas, with the resulting CO2 captured and stored. The latter option risks continued emissions due to methane leaks and imperfect CO2 capture.

Green hydrogen, while low-emissions, is currently expensive to make and is likely to be in high demand from a variety of sectors looking to decarbonise, such as heavy industry. Currently, just 0.04% of all hydrogen produced is green.   

Hydrogen is a less efficient way of delivering energy than direct electrification with heat pumps. Heating homes with renewable green hydrogen would require five to six times more wind and solar capacity than needed to provide the same warmth using heat pumps.

These issues mean that most experts see only a niche role for hydrogen heat. The House of Lords Environment and Climate Change Committee in the UK, for example, recently concluded that hydrogen is “not a serious option for home heating in the short to medium-term and its use is expected to be limited in the long-term”.

Despite this, hydrogen is being pushed by politicians and fossil-fuel companies, with the UK government planning a “hydrogen village” to test its potential for home heat.

The new study models the overall “system cost” of delivering heat in the EU and UK across a range of scenarios. This includes the upfront capital costs of building and installing the necessary infrastructure, as well as the day-to-day costs of running each system.

The scenarios include one where all building heat comes from 100% green hydrogen (“WTL_Hyd” in the chart below) and another with 100% blue hydrogen (“Cost_Hyd”).

Both are considerably more expensive than other options. This is mainly due to the costs of making and storing the hydrogen, and, in the case of green hydrogen, building additional renewable energy infrastructure.

Moreover, the 100% green-hydrogen scenario would be “two to three times more expensive” than one based on 100% electrification of buildings with heat pumps (“WTL”), the authors say.

The findings are in line with a recent review by Dr Jan Rosenow, director of European programmes at the Regulatory Assistance Project. Rosenow surveyed 32 independent studies that found hydrogen use in domestic heating is “less economic, less efficient, more resource intensive and associated with larger environmental impacts” than alternatives. He says this latest study is the 33rd on his list.

While the latest study’s lowest-cost scenario includes 24% of heating being provided by – mainly blue – hydrogen, this is based on pre-crisis gas prices.

The surge in gas prices brought on by Russia’s war in Ukraine undermines the study’s finding that this option would be “cost-competitive with electrification” for some buildings.

Guillén-Gosálbez acknowledges this and tells Carbon Brief:

“We would expect that blue hydrogen from natural gas becomes less cost-competitive as the price of natural gas increases.”

This is particularly significant given energy market consultancy Cornwall insight has stated that gas prices “are expected to remain high and volatile for the foreseeable future”.

‘Large-scale electrification’

Crucially, the authors also note that the greenhouse gas emissions from blue hydrogen production mean it is “far from being absolutely sustainable”. As Rosenow tells Carbon Brief:

“[Blue hydrogen] is not a zero-carbon fuel and therefore should not be considered in the same way as the other technologies that they looked at.”

In fact, the study concludes that even a green hydrogen-heavy scenario exceeds planetary boundaries. This is due to the environmental impacts associated with constructing such large amounts of additional renewables. 

It therefore concludes that “large-scale electrification via heat pumps” and no hydrogen provide the best overall outcome, even before considering high gas prices.

Dr Laurence Stamford, a chemical engineer at the University of Manchester who has conducted a similar assessment of low-carbon heating but was not involved in the study, tells Carbon Brief that it “tells us fairly definitively that a future focused on hydrogen heating does not fit within our planetary boundaries”.

Similarly, the International Energy Agency (IEA) says heat pumps are “the central technology in the global transition to secure and sustainable heating”. 

The researchers note that all of their scenarios, including the ones centred on heat pumps, are more expensive than the existing fossil fuel-dependent heating system. This, again, is based on pre-energy crisis gas prices.

Given the need to reduce emissions, they highlight the need for energy policies to focus on subsidising heat pumps to ease the burden on consumers, and increasing research efforts to bring down costs.

Overall, the researchers acknowledge the limitations of their Europe-wide assessment, noting that hydrogen could still play a role in some heating applications. “In the end, combating climate change will require a range of technologies optimised for local conditions,” says Guillén-Gosálbez.