UK launches hydrogen strategy
The UK Department of Business, Energy & Industrial Strategy (BEIS) launched August 17 the national hydrogen strategy. The UK is hosting the COP26 climate conference in Glasgow in November and the government is keen to show what it is doing to reach its net zero carbon goal.
BEIS said the launch marked "the start of the UK’s hydrogen revolution" and could "transform the way we power our lives and will be essential to tackling climate change and reaching Net Zero."
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It aims to have 5 GW of low carbon hydrogen production capacity in the UK by 2030 and between a fifth and a third of the UK’s energy consumption by 2050 could be hydrogen-based. But the role hydrogen could play is contentious owing to the amount of energy and money needed to manufacture, store, transport and burn it safely.
The first step therefore is a consultation on the nature of the support scheme needed to attract investors. Contracts for differences, which were adopted for offshore windfarms, is the preferred model. They protects developers when wholesale prices fall, and consumers when they are high. In this case it would be for the price difference between fossil fuels and hydrogen, until the hydrogen market is sufficiently mature to stand alone.
Next year the government will work with industry to assess the safety, technical feasibility, and cost effectiveness of mixing 20% hydrogen into the existing gas supply. Doing so could cut emissions by 7% relative to using natural gas. The government is also consulting on the design of the £240mn ($331mn) Net Zero Hydrogen Fund, which aims to support the commercial deployment of hydrogen production plants across the UK.
Transmission system operator National Grid said the transition to a green economy needed a mix of technologies and the strategy provides the certainty needed to boost consumer and investor confidence and support commercial solutions.
Employers' lobby group CBI said hydrogen was key to unlocking decarbonisation, stimulating high levels of skilled green jobs and "as a leader in high skilled manufacturing, and with an extensive legacy in energy production, the UK stands perfectly positioned to capitalise on the opportunities provided by hydrogen."
Government funding
BEIS also announced a £105mn funding package through its Net Zero Innovation Portfolio that will act as a first step to build up Britain’s low carbon hydrogen economy. The investment will help industries to develop low carbon alternatives for industrial fuels, including hydrogen, which will be key to meeting climate commitments.
The bulk comes from £55mn to fund the development and trials of solutions to switch industry from high to low carbon fuels and £40mn in grants to find low-carbon alternatives to red diesel, which is used in heavy-duty off-road vehicles. Red diesel accounts for nearly 14mn mt/yr of CO2.
The remaining £10mn Industrial Energy Efficiency Accelerator offers funding to clean technology developers to work with industrial sites to install, test and prove solutions for reducing UK industry’s use of energy and resources.
The government is already working with the Health & Safety Executive and energy regulator Ofgem to support industry to conduct first-of-a-kind hydrogen heating trials. If all goes well, by 2035 hydrogen could be playing a significant role in heating people’s homes and businesses.
BEIS has already published its Industrial Decarbonisation Strategy, Transport Decarbonisation Strategy and North Sea Transition Deal, while the challenging Heat and Buildings and Net Zero Strategies will be published next year.
Last year the European Union published its hydrogen strategy, while a number of states have also done so separately. These comprise the Netherlands, Norway, Portugal, Germany, France and Spain.