Hydrogen will be the key to reducing Britain’s greenhouse gas emissions from energy consumption, according to new government plans to switch over more than a third of households from fossil fuel-gas in the next three decades.
Under a new UK ‘hydrogen strategy’ document published today, the Department for Business, Energy & Industrial Strategy (BEIS) announced £105mln in government funding to support polluting industries to slash their emissions.
Analysis by the government points to 20-35% of the UK’s energy consumption by 2050 could be based on hydrogen, which would be “critical” to cutting emissions by 78% by 2035 and meeting the country’s net zero target by 2050.
Continuing the growth of the UK’s hydrogen economy “could be worth £900mln and create over 9,000 high-quality jobs by 2030, potentially rising to 100,000 jobs and worth up to £13bn by 2050”.
Household gas bills are expected to initially take some of the hit of supporting the switch, but like with solar and wind energy the continued support should bring costs down in the long run.
Of the new funding announced, this includes £55mln to support the development and trials of solutions to switch industry from high to low carbon fuels such as natural gas to clean hydrogen; £40mln of grant funding for the development and demonstration of low carbon alternatives to diesel for the construction, quarrying and mining sectors, with the aim of decarbonising these industries reliant on red diesel; and £10mln of funding for clean technology developers to work with industrial sites to install, test and prove solutions for reducing UK industry’s energy and resource consumption.
Alongside the new hydrogen strategy, BEIS also launched three public consultations: on the preferred hydrogen business model to help bridge the gap in costs between low carbon hydrogen and fossil fuels, as the contracts-for-difference scheme was designed to do for offshore wind; the design of the £240mln Net Zero Hydrogen Fund to support the commercial deployment of new low carbon hydrogen production plants across the UK; and designing a UK low-carbon hydrogen standard as currently most hydrogen produced in this country is 'grey' or 'blue' - ie created from burning fossil fuels.
Indeed, with 'blue' hydrogen recently found to be more polluting than natural gas, Dan McGrail of the RenewableUK industry body said the “overall the strategy doesn’t focus nearly enough on developing the UK’s world-leading green hydrogen industry”.
He said “we fear that international investors in renewable hydrogen may compare this strategy to those of other countries and vote with their feet”.
“The UK has the potential to generate vast quantities of renewable hydrogen using clean electricity from offshore wind which can be stored and used whenever it’s needed, providing flexibility to our energy system. Green hydrogen is a clean fuel for sectors which have proved difficult to decarbonise so far, such as shipping and heat for heavy industry.”
He added: “We already have a head start in the global race to scale up the production of renewable hydrogen, with ground-breaking projects in development, such as the Gigastack project in the Humber, and world-class electrolyser manufacturers like ITM Power. We’re urging the government to set a target of 5GW of renewable hydrogen electrolyser capacity by 2030 as well as setting out a roadmap to get us there, to show greater leadership on tackling climate change.”
Other listed hydrogen specialists in the UK include AFC Energy PLC (AIM:AFC, OTC:AFGYF, FRA:QC8), which makes fuel cell systems and elecrolysers; Ceres Power Holdings PLC (LSE:CWR), which has secured some big partners for its fuel cell technology and is now also developing its capabilities in electrolysis; and Powerhouse Energy Group PLC (AIM:PHE, FRA:BT81) (LON:PHE), which is focused on its DMG technology that transforms unrecyclable plastic into syngas – a mix of hydrogen, methane and carbon monoxide.
Green Tees
Also overnight, the Department for Transport announced the winners of a £2.5mln research and development competition for hydrogen transport pilots in the Tees Valley area.
In collaboration with Stagecoach Group PLC (LSE:SGC), Ricardo PLC (LSE:RCDO) will change a double-decker diesel bus to a hybrid fuel cell system to drive on local routes.
“Learnings from this project will support fuel cell retrofit technologies in public transport across the UK,” the DfT said.
Toyota will also deliver hydrogen vehicles, including a forklift truck for warehouse operations, a passenger bus and 10 fuel cell passenger cars, for the Tees Valley’s rapid response services; Glasgow-based HV Systems will demonstrate the use of hydrogen in delivery vans in the area “in collaboration with a leading supermarket chain”; while Sainsbury’s will trial a hydrogen-powered heavy goods vehicle, working with consultancy Element Energy.