UK Launches Strategy to Develop Hydrogen as a Major Low Carbon Power Source
Suggests up to 35% of energy consumption could be hydrogen based by 2050
The UK government announced today the launch of its first-ever Hydrogen Strategy, aiming to promote the development and use of hydrogen as a major energy source to help fuel a decarbonized economy.
The development of a hydrogen economy forms a major plank in the UK government’s “Green Industrial Revolution” strategy, launched last year by Prime Minister Boris Johnson. The initiatives announced today aim to enable the UK to reach the plan’s goal to achieve 5GW of low carbon hydrogen generation capacity by 2030, sufficient to power 3 million homes, while also providing energy to transport and industry. Long-term, government analysis suggests that the country’s energy consumption could be 20-35% hydrogen based by 2050.
According to the government’s announcement, the new strategy will also support over 9,000 jobs and unlock £4 billion investment by 2030.
Kwasi Kwarteng, Business & Energy Secretary, said:
“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.”
Hydrogen is likely to form a key building block in many countries’ long-term decarbonization plans, given its ability to act both as a clean energy carrier and fuel, as well as a CO2-neutral feedstock for the production of green chemicals. Despite being the most abundant element in the universe, however, there are no pure hydrogen deposits on earth, and it must be extracted from other materials. The extraction process often creates pollutants and GHG emissions. Currently, there are two primary tracks being followed for ‘clean’ hydrogen production.
Green hydrogen production uses an electrolysis process to extract hydrogen from water, using a renewable source of energy such as wind or solar, with oxygen released as a byproduct. Blue hydrogen is produced by converting natural gas into hydrogen and CO₂, which is then captured and permanently stored. The UK’s new strategy will take a “twin track” approach, supporting multiple extraction methods as it looks too rapidly develop the hydrogen market.
In order to help incentivize investment, the government will likely follow a similar strategy to that used in its development of the offshore wind market, which involved implementing a Contracts for Difference (CfD) scheme, providing developers with direct protection from volatile wholesale prices, and helping to overcome the cost gap between low carbon hydrogen and fossil fuels.
Additionally, the government announced it is consulting on the design of a £240 million Net Zero Hydrogen Fund, which aims to support the commercial deployment of new low carbon hydrogen production plants across the UK.
“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.”