Net Zero suggests that the least cost method of producing hydrogen is steam Methane Reforming (MR), however this is based on cost at production source and does not account for the whole system costs of delivering hydrogen-based energy.
Steam MR is effectively pre-combustion carbon removal from methane, with the disposal of the resulting CO2 through CCS. The proposed Net Zero scenario depends on hydrogen produced in this way, 80% of total production, as such the technical risks associated with the production, storage and distribution of hydrogen are compounded by its dependence on CCS and the risks inherent in that technology.
Hydrogen’s dependence on CCS could be eliminated by using alternative production methods such as electrolysis, and large-scale hydrogen production by electrolysis would have a significant impact on power generation mix and couple help smooth peak power demand. However that process is significantly more costly than the projected cost of MR with CCS and is considered unaffordable, unless technologiesd can be developed to bring costs down.
As electrolysis becomes more efficient at higher temperatures, one potential route is to link hydrogen production to nuclear generation by leveraging the waste heat from nuclear plants. At higher temperatures reached in gas-cooled reactors, production of hydrogen by thermochemical processes is feasible, but the required technology is far from mature. Co-generation of hydrogen at using excess renewables electricity is also being considered, especially in the situations where renewable generation exceeds grid demand.