The UK government unveiled its long-awaited hydrogen strategy today, outlining plans to create a £900m green energy industry by 2030.
Aiming for 5GW of hydrogen production by the end of the decade, the UK government estimates the country could have the capacity to replace natural gas in heating three million homes and power transport and businesses, particularly heavy industry.
The strategy, which business and energy secretary Kwasi Kwarteng said “marks the start of the UK’s hydrogen revolution”, includes several key measures:
- Closing the cost gap between hydrogen and fossil fuels and help the cost of low-carbon alternatives to fall quickly through a business model inspired by windfarms. A consultation about the details has been launched.
- A consultation about the use of the £240m Net Zero Hydrogen Fund to support commercial deployment of hydrogen production plants
- A twin-track approach to supporting both green and blue hydrogen production. Green hydrogen is the cleanest option, produced through electrolysis, which separates water into hydrogen and oxygen. Blue hydrogen is produced from natural gas with the resulting carbon captured.
- The development of a UK hydrogen standard to ensure that hydrogen production is consistent with net-zero aims.
- Working with the industry to determine the safety, feasibility and cost effectiveness of mixing 20% into the existing gas supply in order to reduce emissions by 7%
- Launch of a hydrogen sector development action plan in early 2022
- £105m funding to help polluting industries cut emissions
Anne-Marie Trevelyan, the energy and climate change minister, said: “Today’s hydrogen strategy sends a strong signal globally that we are committed to building a thriving low carbon hydrogen economy that could deliver hundreds of thousands of high-quality green jobs, helps millions of homes transition to green energy, support our key industrial heartlands to move away from fossil fuels and bring in significant investment.
‘Critical step forward’
The North West Hydrogen Alliance welcomed the strategy. Joe Howe, chair of the NWHA, said: “This is a critical step forward for the development of a world leading hydrogen economy in the UK.
“While this sends a strong message to industry and investors that hydrogen is an integral part of our low carbon future, what’s important now is that the government delivers on the strategy by supporting projects like HyNet North West.”
HyNet North West is a project that aims to produce, store and distribute hydrogen and capture and store carbon in the region and North Wales by 2025.
The government forecast that a low-carbon hydrogen economy could deliver emissions savings equivalent to the carbon captured by 700 million trees by 2032. By 2050, it hopes that 20-35% of the UK’s energy consumption is hydrogen-based, playing an important role in reaching net zero by mid-century.
Is it ambitious enough?
Though supportive of the strategy, David Parkin, project direct of HyNet North West, in a Twitter thread this morning wrote that he would have “liked greater ambition”. The demand for the North West alone, he said, was about 4GW, which suggests the 5GW target for the UK “looks light”.
6) But, we would have liked greater ambition in the strategy. For @HyNetNW we have signed up 25TWh/yr of industrial and power demand. Add 3.5TWh/yr for blending and 1TWh for transport, this takes us to 30TWh/yr (4GW). This is just the NW. 38TWh/yr / 5GW looks light for the UK.
— David Parkin (@ParkinDavid) August 17, 2021
The question is whether the strategy provides the clarity energy providers want and need to start investing in hydrogen and drive production beyond these initial ambitions.
In its statement about the hydrogen strategy, the government quoted Antony Green, hydrogen director for the National Grid, who said: “Importantly, unlocking the potential of hydrogen as a clean energy solution requires significant pace and innovation to scale up production, and the guidance from government today will be key to triggering the investment and buy-in needed to achieve this.”
What are the concerns?
Responding to the strategy this morning, climate change think tank E3G said the UK has shown “some welcome ambition” but that the strategy lacks clarity on the transition to green hydrogen.
One central debate around using hydrogen as a low-carbon alternative is how it is produced.
Green hydrogen refers to hydrogen produced through a process called electrolysis, which separates water into hydrogen and oxygen and can be zero carbon if the process uses renewable electricity.
Blue hydrogen involves producing it from natural gas and then capturing and storing the emitted carbon.
That process has recently raised concerns among some researchers. A study by Cornell and Stanford University last week calculated that the carbon footprint of blue hydrogen production is more than 20% greater than using either natural gas or coal directly for heat.
The reason for this is a combination of uncaptured carbon dioxide and the emissions of unburnt methane involved in the process.
E3G argued that blue hydrogen is not net zero and that without “proper regulation” it could “lock in high carbon infrastructure and jobs”.
Juliet Phillips, senior policy adviser at E3G, said: “Worryingly, [the hydrogen strategy] leaves the door ajar for blending hydrogen into the gas grid – a Trojan Horse that would keep our heating running on fossil gas, while consumers pick up the tab. We hope this can be clarified in the forthcoming heat and buildings strategy.”
Is this a pragmatic approach?
Supporters of the strategy – such as Parkin – said that while hydrogen has to be green in the long term, there is not enough renewable electricity capacity in the UK in the short-term to meet that ambition.
Another short-term concern is cost: green hydrogen is still two to three times as expensive to produce than blue hydrogen, according to the International Renewable Energy Agency.
Following the publication of the hydrogen strategy, property will be looking to the heat and building strategy for more clarity about the UK’s plans to decarbonise the built environment.
The strategy was expected to be published last year but has been delayed several times. As COP26 approaches, the government will face growing pressure to publish its plans and give the industry much-needed clarity.
Julie Hirigoyen, CEO of UKGBC, said: “The future use of hydrogen is just one element of our decarbonisation journey. We urge the Government to release its heat and buildings strategy in order to give the sector both clarity and certainty on what the future of heat will look like. Crucially, now is the time to deliver the right package of incentives and policies to truly deliver fair, effective heat decarbonisation at the scale required.”