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The Future of Hydrogen Chapter 6: Policies to boost momentum in key value chains (NN, 2018; Dodds and Demoullin, 2013).57 Where distribution pipelines have been installed or upgraded recently they are likely to use polyethylene or nylon pipes that could carry 100% hydrogen. Existing pipelines do not require new permits, which can take years to acquire, further raising costs and risks and slowing the pace of change. There are also non-economic advantages to making use of existing infrastructure, including continuity of institutional arrangements and the avoidance of construction works, which could arouse opposition from local populations and owners of existing assets. Converting to 100% hydrogen is a bigger change than blending. Conversion requires an overnight switch to 100% hydrogen supply for each part of the affected network, which means that new compressors and, in some cases, storage facilities, need to be available in advance.58 It also requires replacement of meters, compressors and monitoring equipment, thorough inspection of older parts of the pipeline, and replacement of current gas appliances. Furthermore, citizens’ reactions to such a programme are as yet untested. In the 2030 timeframe, full conversion is expected to be realised in fewer places than blending and only in limited parts of national grids, such as town distribution networks or specific underused transmission pipelines. The H21 project, currently at feasibility study level, proposes a conversion of the UK city of Leeds to 100% hydrogen from the late 2020s, with over 1 MtH2/yr from natural gas with CCUS from a North Sea industrial cluster (H21, 2018). Near-term policy priorities Targets and/or long-term policy signals. The timely development of clear roadmaps would decrease obstacles to grid conversion and help potential hydrogen suppliers estimate future market size. The timeframes for grid upgrade and conversion programmes are long, as are the timeframes for turnover of consumer appliances for gas use. Strategic decisions about future gas infrastructure and heating sources are particularly important in colder climates where heating accounts for a significant share of energy use and CO2 emissions. Timelines for the first large-scale projects might act as critical milestones in long-term plans. Demand creation. At current cost levels, even low levels of hydrogen blending require policy support to stimulate demand from gas suppliers and to encourage hydrogen equipment production and infrastructure use. Few such policies are in place today (Dolci et al., 2019). To become a dependable source of low-carbon hydrogen demand, blending could be fostered by setting quotas, emission targets or blend levels for low-carbon gases, analogous to mechanisms for renewable electricity. Strategic consideration would need to be given to the sharing of additional costs if the effect on consumer prices could be counterproductive. Investment risk mitigation. Governments could reduce the risks associated with investment in new hydrogen supplies for blending into the gas grid by clarifying market and technical conditions (Mulder, Perey and Moraga, 2019). The issues that need clarifying include conditions relating to third-party access, regulated returns for system operators, and consumer protection. Governments and system operators could further help investors to manage risks by taking steps to ensure that existing and future equipment on the grid is able to operate with blended hydrogen, including gas storage, compressors, turbines and home appliances. 57 The existing low-calorific gas transmission network in the Netherlands, which is becoming underutilised, has steel pipeline grades that are suitable for hydrogen transport (DNV-GL, 2017). By 2030, demand for this gas is expected to have fallen sufficiently to potentially give rise to a unique opportunity to convert a transmission pipeline to 100% hydrogen. 58 Where transmission pipeline corridors are made up of several pipelines in parallel, these could be converted one-by-one, and local distribution grids also exist that can be isolated from the wider distribution grid and connected to a dedicated hydrogen source. PAGE | 184 IEA. All rights reserved.PDF Image | The Future of Hydrogen 2019
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