Government launches long awaited hydrogen strategy

The UK government has launched the first-ever Hydrogen Strategy.

The plan outlines how the government will work with industry to meet its ambition of 5GW of low-carbon hydrogen production capacity by 2030 – this could replace natural gas in powering around 3 million UK homes each year as well as powering transport and some industry. 

The government’s approach is based on the UK’s previous offshore wind strategy. One of the main tools used by the government to support offshore wind was the Contracts for Difference (CfD) scheme, which incentivises investment in renewable energy by providing developers with direct protection from volatile wholesale prices and protects consumers from paying increased support costs when electricity prices are high. 

According to the government, a UK-wide hydrogen economy could be worth £900m and create over 9,000 high-quality jobs by 2030.

The report also states that a hydrogen economy could deliver emissions savings equivalent to the carbon captured by 700 million trees by 2032. 

Other measures included in the strategy are: 

• Supporting multiple technologies including ‘green’ electrolytic and ‘blue’ carbon capture-enabled hydrogen production
• Collaborating with industry to develop a UK standard for low carbon hydrogen
• Undertaking a review to support the development of the necessary network and storage infrastructure to underpin a thriving hydrogen sector
• Working with industry to assess the safety, technical feasibility, and cost-effectiveness of mixing 20% hydrogen into the existing gas supply
• Launching a hydrogen sector development action plan in early 2022 setting out how the government will support companies to secure supply chain opportunities, skills and jobs in hydrogen

As such, the government has today launched a public consultation on a preferred hydrogen business model.

Alongside this, the government is consulting on the design of the £240m Net Zero Hydrogen Fund, which aims to support the commercial deployment of new low carbon hydrogen production plants across the UK.

Business & Energy Secretary Kwasi Kwarteng said: ‘Today marks the start of the UK’s hydrogen revolution. This home-grown clean energy source has the potential to transform the way we power our lives and will be essential to tackling climate change and reaching Net Zero.

‘With the potential to provide a third of the UK’s energy in the future, our strategy positions the UK as first in the global race to ramp up hydrogen technology and seize the thousands of jobs and private investment that come with it.

John Mullen, UK Energy market director at Ramboll commented on today’s announcement: ‘What this strategy will finally deliver, and what is really needed, is the business assurance that investment in hydrogen infrastructure and technology is a good bet.

‘Hydrogen presents us with an excellent opportunity to repurpose and make use of existing infrastructure already in place for fossil fuels to support a burgeoning new frontier in the UK energy sector.

‘However, as a developing market, the government should be seizing the opportunity by providing investment and the development of a concrete action plan now, rather than making us wait until 2022.

‘Transitioning away from gas will require investment, and we need to ensure the support is there for upskilling and learning if we are to reach their 2030 goals. Effective regulatory frameworks and financial incentives are also needed for hydrogen to work in synergy with existing technologies’

Photo by Jamie Street