The government's Hydrogen Strategy - released yesterday - detailed its plans for achieving a goal of 5GW of low carbon hydrogen production capacity by 2030.
Included within the strategy was a 'twin track’ approach to supporting multiple hydrogen technologies, including green electrolytic and blue carbon capture-enabled hydrogen production, as well as a preference for a Contracts for Difference (CfD) style hydrogen business model.
Here, the industry has its say on the strategy:
Grace Millman, energy analyst and hydrogen expert, Regen:
Any UK Hydrogen Strategy must be compatible with the UK’s net zero target and ultimately aim for zero carbon hydrogen. Whilst we therefore welcome the positive commitments to green electrolytic hydrogen in the strategy released today, the government is also relying heavily on blue CCUS-enabled hydrogen to achieve near-term production ambitions.
We have not yet seen CCUS solutions at scale, nor technology developments that provide sufficient capture efficiencies that would allow CCUS-enabled hydrogen to be compatible with net zero. It is therefore a risk to base the Hydrogen Strategy on the assumed development and availability of CCUS, and the companion consultation on a ‘Low Carbon Hydrogen Standard’ should focus on this as a priority.
Celia Greaves, CEO, UK Hydrogen and Fuel Cell Association:
We are pleased to see the government reaffirm its commitment to the hydrogen sector, with analysis suggesting that up to one third of the UK’s energy consumption by 2050 could be hydrogen-based. We support the ‘twin-track’ approach, which will help us scale up and decarbonise more quickly.
However, we believe that the strategy could have been more ambitious. Industry believes that with the right support, a 20GW mix of green and blue hydrogen power could be deployed by 2030. That is four times more than the government has planned for.
Government needs to introduce business models that are attractive and workable for both green and blue hydrogen and reflect their different characteristics. We welcome the publication of the consultation on business models and look forward to working with government to develop the right initial business models so that both green and blue hydrogen can compete with traditional sources of power and heating.
Chris Hewett, chief executive, Solar Energy UK:
In March 2021, the energy minister informed us that the government did not believe that a proportion of the net zero target should be prescribed to a specific technology. We are glad this is no longer the case, but having a strategy and target for hydrogen, which explicitly endorses a fossil fuel-generated blue hydrogen route, before anything is in place for zero carbon solar will increase UK carbon emissions and further undermine our credibility in the run up to COP26.
There is clearly a future role for renewables-generated green hydrogen, and the solar industry will continue to work on delivering this, alongside our target of 40GW of solar power by 2030.
Chris Matson, partner, LCP:
Hydrogen has a significant role to play in helping the UK reach net zero, with both green and blue hydrogen likely to be needed to meet future energy demands. There is a significant opportunity for electrolysers to be deployed that can utilise excess renewable generation which would otherwise be wasted. In a future net zero energy system, we estimate that the UK would benefit from around 25-30GW of electrolysers, requiring an estimated £13 billion of investment through to 2050. One of the primary benefits is that the electrolyses would allow us to maximise the potential of our wind and solar assets.
However, current market mechanisms would not enable the electrolysers to be fully remunerated for this benefit, so they will require new support mechanisms to ensure that they are financially viable. The challenge now is ensuring that business models are put in place to allow investment to come forward.
Dan McGrail, CEO, RenewableUK:
While we welcome positive steps like the new Net Zero Hydrogen Fund, overall the strategy doesn’t focus nearly enough on developing the UK’s world-leading green hydrogen industry.
In the year when the UK is hosting the biggest climate change summit for years, we fear that international investors in renewable hydrogen may compare this strategy to those of other countries and vote with their feet. The government must use the current consultation period to amend its plans and set out a clear ambition for green hydrogen.
We already have a head start in the global race to scale up the production of renewable hydrogen, with ground-breaking projects in development, such as the Gigastack project in the Humber, and world-class electrolyser manufacturers like ITM Power. We’re urging the government to set a target of 5GW of renewable hydrogen electrolyser capacity by 2030 as well as setting out a roadmap to get us there, to show greater leadership on tackling climate change.
Emma Pinchbeck, chief executive, Energy UK:
Hydrogen and CCUS are going to be incredibly valuable for sectors that will be difficult to decarbonise with electricity – and so we welcome that today’s Hydrogen Strategy takes an economy-wide approach to developing these innovative technologies. The UK has real potential for hydrogen and CCUS, both of which can deliver new skilled jobs, particularly in places where the UK already has a proud industrial and energy heritage.
Laura Bishop, chair, Ground Source Heat Pump Association:
We welcome the government’s ambitions to develop the hydrogen economy in the UK. However the country has to get moving with decarbonising heat if it’s to reach the net zero targets. Heating peoples’ homes by using green hydrogen is certainly an option – albeit a costly one - but is highly optimistic given the short timeframe that we have to address net zero and the climate emergency.
Heat pumps are a proven and efficient heating technology, and their costs will fall as investment in UK heat pump manufacturing and installation increases. We await the government’s Heat & Building Strategy that I’m sure will provide a clear roadmap for the UK to crack on with decarbonising the country’s housing stock now rather than at some uncertain time in the future.
Barry Carruthers, director of hydrogen, ScottishPower:
We believe zero means zero. That’s why we’re working to deliver green hydrogen, a zero emissions way of providing a fuel that will be invaluable in decarbonising areas of the economy that are difficult to electrify, like heavy industrial processes and heavy transport.
The scale of the strategy’s industry support scheme shows the UK has real ambition to deliver hydrogen at pace and will now provide the acceleration and scale to deliver world-leading green hydrogen projects that could be built in the next two years.
The ambition shown in the government’s hydrogen strategy matches the size of the opportunity in bringing forward green jobs and unleashing private sector investment in a zero emission technology that will be one of our best weapons in the fight against climate change.