UK hydrogen strategy: stakeholders get their bids in early
UK industry has welcomed the government’s support for hydrogen with the belated publication of its strategy August 17. Among the objectives are subsidised hydrogen production by 2023 and the attraction of some £4bn ($5.5bn) of private capital by 2030.
Business groups, transporters and present and future hydrogen producers were among those to find it encouraging, while pointing out that the hard work of developing the supply chain and subsidising it equitably still needs to be tackled.
Below is a summary of the responses – their support can be taken as read in each case – kicked off by major hydrogen manufacturer BOC UK. It observed that 5 GW of low-carbon hydrogen production by 2030 means deploying “a full framework of financing options including new funding packages and a contracts for difference scheme (CFD)” in order to attract the investment needed to produce hydrogen at scale. Only at scale will it be possible to close the cost gap between low-carbon hydrogen and fossil fuels, on which the CFD scheme will operate.
BOC is working with organisations on hydrogen production, refuelling and storage projects and with industrial partners in steel, glass, cement and other ‘hard-to-decarbonise’ sectors. But it says that other cost-effective technologies exist to cut carbon. Success with hydrogen, on the other hand, will depend on unlocking funding sources and implementing the supporting policies and frameworks in the strategy.
Oxford-based green hydrogen producer and supplier Ryze Hydrogen, which caters to the public transport sector, said it was “ready to start developing green hydrogen production sites across the UK. But the government must now confirm its plans for the Renewable Transport Fuel Obligation, and the Bus Service Operators Grant so that industry has the certainty to invest,” it said. The government must also deliver on its commitment to buy 4,000 zero emission buses.
It says its buses are “already on the streets of Aberdeen, London, Birmingham, Belfast and Dublin” and they are “ideal first users of hydrogen and can be easily scaled up to stimulate further investment in green hydrogen production.”
The Hydrogen Strategy Now campaign said its vision would help to unlock the £4bn of private investment ready to be directed at projects across all parts of the UK, creating thousands of new, highly-skilled green jobs and accelerating progress towards Net Zero. But it warned that other countries are ahead of the UK.
Reminding its audience that hesitation had cost the UK the lead in wind and battery technology, this must not happen again, it said. The UK “is home to world leading manufacturers of hydrogen boilers, trains, planes, buses, cars, ships, diggers, electrolysers, fuel cells and many other technologies…. We have all the tools required to lead the global $2.5 trillion hydrogen race.”
Chile, France and South Korea already have hydrogen production targets that are more ambitious than the UK. And the demand side needs boosting too, it said. “We would therefore have liked the strategy to set out a bolder vision for hydrogen in transport, heat and industry.” It also called for a harmonised UK-wide approach: the UK’s production target of 5 GW by 2030 is the same as Scotland’s, “which presents a disjointed message to investors and industry.”
Future blue hydrogen producer Storegga, part-owner of the Acorn carbon capture and storage/hydrogen production project in St Fergus, said that the ambition of the UK’s first Hydrogen Strategy was encouraging and more definition of the details in the 10 Point Plan is welcome. The Scottish Cluster, of which Storegga is a part, is expected to provide 1.3 GW of low-carbon hydrogen production by 2030 and to further scale up to 3.7 GW by 2050.
Stressing the urgency of action, it said: “Without the Scottish Cluster, hydrogen adoption in Scotland and across the UK will be significantly delayed.”
IGEM, the gas engineers institute, said hydrogen is at the core of an affordable net zero energy system, and a national hydrogen network will be required to provide the storage and flexibility needed to meet demand across industry, home heating, power generation and transport safely and reliably. Hydrogen can deliver a least-cost, least-disruption outcome for consumers.
It also nailed its agnostic colours to the mast, with its support for a 'twin-track' approach to hydrogen production. Both electrolytic and CCUS-enabled low carbon hydrogen (green and blue) will be needed to scale up production for the UK's 2030 and 2050 carbon emissions targets.
It also approved of the government's commitment to review the Gas Act 1986 and gas quality standards to allow for decarbonised gases into the network. This will call on expertise throughout the energy system on the future role of gas.
But it too urged expedient action: mandating hydrogen-ready boilers by 2026 will accelerate production in anticipation of demand. IGEM will also “continue to provide high quality, training courses and events for industry professionals on hydrogen, the future of gas and our technical standards.”
Upstream lobby group OGUK said the “much-awaited” hydrogen strategy would enable hydrogen to be a vital resource as one of the multitude of low-carbon solutions now needed. “This provides a clear long-term signal that government is committed to building a world-leading UK hydrogen economy and sets out how it will work with industry to achieve this.” And it too seized on the “recognised need for the development of green and blue hydrogen” – all options should be made available in the pursuit of a viable transformation of the energy system.
Generator Uniper said it “looks forward to continuing to engage with government in developing business models and driving forward decarbonisation. To ensure we can deliver hydrogen at scale it is important to recognise the role that both blue and green hydrogen will play. Investing in both is essential to drive forward innovative solutions while supporting global competitiveness.”
But it said that this is just the start of a process. Uniper is working with several partners on potential hydrogen projects, such as Zero Carbon Humber on the North Sea coast, the UK’s highest emitting industrial cluster. And it is working with Eni on the western coast to support its aspiration for blue and green hydrogen production at Connah’s Quay Power Station, in North Wales.
The North West Hydrogen Alliance said that the strategy “sends a strong message to industry and investors that hydrogen is an integral part of our low carbon future.... We particularly welcome the commitment to developing a Hydrogen Sector Development Action Plan to ensure that the huge economic benefits from hydrogen are kept in the UK…. Now’s the time to start raising public awareness of hydrogen and how it can help us reduce our carbon emissions and protect our planet.”
Low-pressure pipeline operator and Hynet lead partner Cadent spoke to NGW about its views on the strategy earlier in the day. An interview with its chief strategy and regulation officer Tony Ballance may be read here.