Spotlight on the UK’s hydrogen strategy
Recently, the Department for Business, Energy & Industrial Strategy set out the Government’s approach to developing a low carbon hydrogen sector in the UK to meet the Government’s target for 5GW of low carbon hydrogen production capacity by 2030. Click here to read the ,UK Hydrogen Strategy.
Key features of the proposals
According to the UK Government, the clean hydrogen industry has the potential to provide a third of the UK’s energy in the future, which poses the question – what is fuelling the demand for hydrogen energy? In essence there is currently a higher cost involved in producing hydrogen compared to existing fuels, therefore, the latest Government strategy proposes to establish a subsidy system to support large-scale hydrogen projects seeking to contribute towards the UK Government’s target of achieving net-zero carbon emissions by 2050.
“With the potential to overcome some of the trickiest decarbonisation challenges facing our economy – including our vital industrial sectors – and secure economic opportunities across the UK, low carbon hydrogen has a critical role to play in our transition to net zero.”
The Rt Hon Kwasi Kwarteng MP Secretary of State for Business, Energy & Industrial Strategy
The UK Government has established an ambitious approach to creating hydrogen investment opportunities and has boldly outlined the favourable conditions for hydrogen production as early deployment of Carbon Capture, Usage and Storage (CCUS) technology and infrastructure will likely be located in coastal locations, with important links to CO2 storage sites such as disused oil and gas fields.
The ‘twin track’ approach
UK Government is proposing a ‘twin track’ approach to its hydrogen strategy combining the UK’s capacity to produce ‘green’ hydrogen, which is made using renewable energy and ‘blue’ hydrogen, which is made using fossil fuels with the environmental impact mitigated by storing greenhouse emissions underground.
The continued focus on ‘blue’ hydrogen has led to many in the industry and beyond criticising the continued inclusion of fossil fuels in future energy policy. Globally, the vast majority of hydrogen is produced from fossil fuels such as natural gas and coal, creating emissions estimated by the International Energy Agency of around 830m tonnes of carbon dioxide annually, which equates to CO2 emissions equivalent to those of the UK and Indonesia combined.
‘Green’ hydrogen energy has been enlisted as the future for the sector, however, it is often costly and many feel that additional focus should be placed on this form of hydrogen to help bring costs down.
The UK’s current position in the hydrogen market
At present, companies such as ITM Power have created international noise about its clean energy in in the city of Sheffield, with the unveiling of its new £22 million factory that can use renewable power to produce hydrogen from water. ITM has formed international partners and has spiked an interest for the hydrogen revolution in the UK.
Scotland is also home to a number of world-leading hydrogen projects that are helping determine the UK’s hydrogen energy strategy going forward. The European Marine Energy Centre in the Orkney Islands boasts a £65 million portfolio of renewable hydrogen projects that is still growing.
In a favourable policy climate, the Welsh Government has made a case for significant opportunities for low carbon hydrogen projects in Wales, as its strong geological and infrastructural environment provide a readily available market for the deployment of new hydrogen strategies. The Welsh Government will confirm and publish its strategic position on hydrogen in the early autumn of 2021.
We’re excited to be supporting clients in the renewables sector, including green hydrogen in Wales.
Get in touch if you’d like to discuss any future hydrogen projects and communications or consultation strategy. We’d love to share experiences and understand where your project would like to position itself in a favourable hydrogen market.