Transitioning to net zero in a trustless environment: Who should pay for the costs of the hydrogen switchover?

Joel Gordon, Nazmiye Balta-Ozkan and Seyed Ali Nabavi

Cranfield University, UK

Hydrogen is regarded globally as a critical energy vector for decarbonising major sectors of the economy. Notably, the UK Hydrogen Strategy (August 2021) forecasts a potential role for hydrogen in residential decarbonisation, with strategic decisions to be take mid-decade. Ahead of this critical juncture, there remains a lack of robust evidence to steer strategic policymaking towards the goal of securing a socially acceptable transition to hydrogen homes. This research aims to bridge this knowledge gap by examining how consumers perceive the prospect of switching to a hydrogen home and evaluating their willingness to pay for the transition. A qualitative pre-study carried out by the authors (online focus groups, N = 58: February–April 2022) highlights the extent to which public mistrust in the government and the energy sector may undermine support for a domestic hydrogen transition. To better understand the role of trust in shaping hydrogen acceptance, this study draws on recently collected online survey data (N = 1850, October–December 2022). The paper explores the relationship between trust, cost perceptions of the hydrogen switchover, and willingness to pay for transition, as a way of gauging socio-political and attitudinal acceptance for hydrogen homes in the UK context.

At the socio-political level, the study firstly evaluates consumer confidence in the switchover by examining public trust in the key actors and stakeholders of the hydrogen transition, including the government, energy suppliers, gas distribution network operators (GDNOs) and boiler manufacturers. Next, at the attitudinal level, cost perceptions for hydrogen appliances and hydrogen energy bills are examined, as a further means of understanding consumer expectations during a time of economic crises. Lastly, willingness to pay for the domestic hydrogen transition is explored under the five distinct scenarios, which differentiate between the costs, benefits and risks of the transition. In addition to evaluating each acceptance construct across the sample, this study provides nuance through a multi-group analysis composed of the following groups: (1) consumers with high (N = 336) and moderate (N = 458) levels of engagement in renewable energy technology and the environment (N = 336); fuel poor citizens with less than moderate levels of engagement in renewable energy technology and the environment (N = 379); and finally, a larger ‘Baseline’ Group (N = 677) (i.e. not fuel poor and with less than moderate levels of engagement in renewable energy technology and the environment). Descriptive and inferential statistics including one-way analysis of variances (ANOVA) tested are employed to examine areas of convergence and divergence between groups. These results are further validated against the qualitative responses given by participants at the end of the survey, as a way of deriving meta-inferences through mixed methods analysis.

The results affirm significantly low levels of trust in the key actors of the hydrogen transition, specifically when it comes to the central government. Consumers anticipate that hydrogen appliances will be slightly more expensive than their natural gas counterparts, but expect no significant change to their energy bills when using hydrogen. These results are relatively consistent across groups, suggesting a reasonable level of consumer homogeneity in relation to trust and cost perceptions. However, consumer heterogeneity is observed in relation to willingness to pay for the domestic hydrogen transition under different scenarios. Foremost, the ‘very engaged’ group (N = 336) express higher levels of willingness to pay across all five scenarios. The results transmit to UK policymakers the importance of re-building public trust in the government and the energy industry. Furthermore, the analysis highlights the critical role that technology and environmental engagement is set to play in securing the social acceptability of the country’s low-carbon, energy future.