Gas appliances would need to be replaced from 2035 under First Gas hydrogen plan

Friday, 26 March 2021

First Gas believes switching from natural gas to hydrogen at the same time as dramatically increasing renewable electricity generation will be the solution to slashing emissions from the energy sector. (Artist impression)

The country’s biggest gas network company, First Gas, plans to stop piping natural gas to customers between 2035 and 2050 and switch instead to ‘green’ hydrogen produced by renewable electricity.

Its road map would mean more than 60,000 North Island households connected via its 7000 kilometres of gas pipes would need to replace their gas appliances during that period.

But project manager Angela Ogier said the conversion would secure the future of the gas network.

“We believe the distribution of hydrogen is going to improve the ability of consumers to enjoy continuous hot water heating, cooking with gas, and gas heating,” she said.

There would also be consequences for commercial users, who are the biggest users of gas.

But the impact on carbon emissions could be dramatic.

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First Gas chief executive Paul Goodeve said switching to green hydrogen had the potential to reduce total emissions from the broader energy sector by a quarter.

Hydrogen can also be created by splitting natural gas, but “the aspiration for us is to have hydrogen that does not add to the climate change challenges that we face”, Goodeve said.

First Gas’ plan would see it start to pipe a gas blend containing up to 20 per cent hydrogen into its network from 2030, before switching to 100 per cent hydrogen between 2035 and 2050.

Commercial manager Ben Gerritsen said he expected the conversion programme would ramp up rapidly from 2040.

Once the mix went above 20 per cent hydrogen, consumers would need new gas appliances, he said.

But there would not necessarily be any changes for customers who use bottled gas.

Ogier said First Gas would design a small scale trial this year that would involve First Gas mixing 1 per cent hydrogen into one of its networks.

Gas cookers could be burning 20 per cent hydrogen from 2030, but would need to be replaced when the mix gets richer.

It might invest in its own electrolysis system to supply hydrogen for that trial, or buy it bottled, she said.

“We will move on to selecting the network very shortly.”

First Gas’ plan would have far-reaching consequences for a range of industries outside the gas sector.

One of the more immediate uses of hydrogen is expected to be as a replacement for diesel in the trucking industry, which First Gas envisages would see hydrogen refuelling stations set up across the North Island.

Another new use would be to replace coal boilers, for example at milk power factories.

Gerritsen said the amount of electricity generated in New Zealand would need to nearly triple from 42 terawatt-hours a year to 114TWh/year by 2050 to provide the power to convert water into hydrogen while also meeting the expected increase in electricity demand that will otherwise occur by then.

The vast majority of that expected extra power would come from wind and solar power, First Gas believes.

About 13 million cubic meters of water would need to be converted into hydrogen and oxygen by 2050, an amount equivalent to about 8 per cent of the water used by Auckland.

It is a process that will always consume more power than it produces overall, with the benefit of getting that power to customers in a more convenient form, and is getting more efficient.

First Gas is assuming the cost of generating green hydrogen will roughly halve to about $3.30 a kilogram by 2050 as a result of new technology.

“That is really essential to make that an affordable option,” Gerritsen said.

It was fair to be concerned that expected progress would not be achieved, but First Gas needed to prepare for it, he said.

First Gas would be riding a worldwide trend, he said.

“You can’t read a report about the gas industry without seeing some reference to hydrogen,” he said.

“There are multiple countries throughout Europe and the world that are really focusing their energy strategies around getting the price of hydrogen down and getting the utlitisation of hydrogen in their energy system up.”

Ogier said a study by British firms Aqua Consultants and Element Energy that was partly funded by the Government showed First Gas’ existing network was technically capable of distributing hydrogen.

“What the study has proven is our network can deliver.

“We know this is achievable,” she said.