Mayor urged to revaluate hydrogen supply for London’s businesses

The Mayor selected the ‘Accelerated Green’ pathway as the preferred route to reaching net zero in London.

This estimates hydrogen demand in industrial processes will stand at approximately 0.3TWh per year by 2030.

However, forecasts from 15 industrial users across 19 sites in East London have suggested that demand could total 2.0TWh per year by 2030 – far exceeding the predicted estimates within the ‘Accelerated Green scenario’ in just one part of London.

The London Assembly is therefore today calling on the Mayor to revaluate whether the hydrogen supply and demand targets are representative of business needs in London, and amend where required.

Emma Best AM, who proposed the original motion, said:

“Replacing natural gas with hydrogen is key to London achieving Net Zero by 2030. Feedback from suppliers suggests demand for hydrogen will be much higher than the Mayor expects.

“To ensure there is enough supply to meet future demand, we’re calling on the Mayor to review his hydrogen targets.

“We’re also calling on the Mayor to review how he works with business and industry to ensure his Net Zero targets reflect their needs and expectations.”

The full text of the amended motion is:

This Assembly welcomes the positive steps taken in response to the climate emergency, specifically the design of four ‘Pathways to Net Zero Carbon’, each outlining different approaches to accelerate action in the capital to reduce carbon emissions.

This Assembly notes that the ‘Accelerated Green’ pathway has been selected as the preferred route to reaching net zero in London by the Mayor of London, part of which estimates hydrogen demand in industrial processes will stand at approximately 0.3TWh per year by 2030.[1]

Cadent, SGN and National Gas are currently undertaking their Capital Hydrogen programme, working alongside key stakeholders to identify and realise the potential of hydrogen in London’s net zero transition.[2] They have spent the past six months working with industrial users and producers, gathering hydrogen forecasts to further understand what supply and demand could look like.

Forecasts received from just 15 industrial users across 19 sites all north of the Thames in East London, has suggested demand could total 2.0TWh per annum by 2030[3], far exceeding the predicted estimates within the ‘Accelerated Green scenario’ in just one part of London. Many of these customers have told Cadent that they have no other option than to convert to hydrogen as a dominant energy source, presenting a potential risk for long term economic prospects in the region if hydrogen supply and end use is not realised.

We particularly note that the companies named above are currently heavily invested in natural gas and therefore the need expressed during this exercise must be assessed and independently analysed.

We also note that the source for the hydrogen projected to be used by these businesses is a crucial factor in any decarbonisation plan. There will be an accompanying massive scaling up of renewables needed to ensure London’s businesses can access sufficient green hydrogen, otherwise it will be obtained from fossil fuel sources.

This Assembly therefore calls on the Mayor to re-evaluate whether the hydrogen supply and demand targets outlined in the ‘Pathways to Net Zero Carbon’ and in the chosen ‘Accelerated Green’ scenario are representative of business needs in London and independently assess this.

Given this, the Assembly would also call for a review of how we monitor progress of the Net Zero Carbon Pathways action plan to ensure targets align with the expectations of businesses and customers. And finally, this Assembly calls on the Mayor and Chair of Assembly to write to the Department for Energy Security and Net Zero highlighting these findings and urging the Government to establish a more ambitious commitment for green hydrogen production, distribution, and end use across the country.