Scotland Makes $135mn Hydrogen Pledge

The Scottish government has pledged some £100mn ($135mn) to develop the hydrogen sector over the next five years, it announced in a policy statement on December 21, with the goal of producing 5 GW of renewable and low-carbon hydrogen by 2030.

This would be enough hydrogen to meet the power needs of 1.8mn homes and economic impact research indicates the hydrogen industry could be worth up to £25bn/year by 2045, the government said.

"Scotland has, in abundance, all the raw ingredients necessary for the production of low-cost hydrogen as well as one of the largest concentrations of offshore engineering expertise in the world that can harness Scotland's renewable energy potential in technologies like wind, wave and tidal power, to produce green hydrogen," its energy minister Paul Wheelhouse said.

In addition to renewable energy-derived so-called green hydrogen, Scotland is also looking to produce blue hydrogen from natural gas arriving at the St Fergus terminal in Aberdeenshire from 2024, under the Acorn project led by Pale Blue Dot Energy (PBD). The CO₂ from the process would be captured and stored in depleted offshore reservoirs. 

In its policy statement, the government said that while green hydrogen was the attractive option for the medium to longer-term, blue hydrogen could help deliver on short-to-medium term targets. This is in line with the positions of a number of European countries and the EU. The government estimates that there is up to 46 Gt of CO₂ storage capacity in Scottish waters that can be accessed with legacy oil and gas infrastructure.

According to Wheelhouse, Scotland can even produce a surplus of hydrogen that could be exported to other European nations with insufficient supply of their own.

"No one fuel or technology is, by itself, the solution to climate change, but hydrogen has the potential to be a very important part of a progressive, decarbonised energy system supporting our transition to net zero in transport, heating and industrial decarbonisation," the minister said. "We are committed to supporting this emerging sector to deliver a transformation in how we produce, store and utilise energy and to maximising the economic benefits that the production of hydrogen can bring."

Oil and gas association OGUK welcomed the government's hydrogen policy statement, saying it "recognises the critical role our industry has to play in creating a hydrogen industry, both through the expertise of our supply chain and the talents of our workforce, and in the opportunities presented by repurposing of our infrastructure."

However, OGUK once again stressed the need for a sector deal to provide support for the industry. The association has been discussing the support package with UK and Scottish authorities for some years: it was included in the UK Conservatives' 2019 election manifesto.

Carbon capture and storage project developers are also working with the UK government on devising a value chain to attract investors into the new sector. Anglo-Dutch Shell, French Total and privately-owned North Sea producer Chrysaor are involved with PBD's Acorn project. A November interview with Nick Cooper, CEO of Storegga, which partnered up with PBD in the summer, can be read here.