Hydrogen strategy: the industry responds

Rt Hon Philip Dunne MP, chair, Environmental Audit Committee:
“I welcome the eagerly awaited Hydrogen Strategy, which finally gives industry some clarity on the government’s intention for hydrogen in our low carbon energy mix. When our Committee undertook work on hydrogen last year, we heard that the UK is ahead in terms of technology and understanding, but lacked demand signals from Government through a Hydrogen Strategy required to compete in the global hydrogen economy.
“While I welcome this step forward, I have to say it is disappointing that only now – after being promised the Strategy in November last year – are the necessary consultations being launched on how to overcome funding issues and how to define ‘low carbon’ hydrogen. These critical issues should have been ironed out in advance of this Strategy. I urge the Government to act swiftly on the outcomes of these consultations. The UK has a strategic advantage from the prospect of generating green hydrogen from surplus offshore renewable energy generation, but the opportunity should not be missed.
“Reflecting our calls last year, I welcome the Government’s move to look into the blending of hydrogen into the existing gas supply. While the twin track approach proposed, supporting both green and blue hydrogen production, is positive, it is also important that substantial capacity for carbon capture is developed, so as to avert release of damaging emissions currently created in blue hydrogen production. At present 95% of hydrogen produced worldwide uses fossil fuel feedstocks, and without action to stem the emissions entailed, the use of hydrogen on the scale envisaged by Government will unlikely get us to Net Zero Britain.”

Jess Ralston, analyst, Energy and Climate Intelligence Unit (ECIU):
“A strong hydrogen economy in the UK could cement our place as a green industrial leader if the right action is taken early. The fuel could be very valuable for cleaning up steel production and protecting jobs in this industry – crucial when Europe is already steaming ahead with 23 hydrogen steel plants when we have none. But some questions remain over whether the government has truly grasped which areas will be most suitable for hydrogen use and which will not.
“For example the case for hydrogen for home heating is far from proven, particularly hydrogen derived from fossil gas rather than from renewable energy. After all, any remaining fossil gas with a hydrogen blend in the grid is just not compatible with net zero and it’s not yet clear how effective hydrogen will be, nor how much it will cost.
“The government should also be alive to the risk of gas industry lobbying causing it to commit too heavily to blue hydrogen and so keeping the country locked into fossil fuel based technology, making reaching net zero more difficult and costly. Instead, focussing on green hydrogen could unlock the our full industrial potential, bringing with it lifelong jobs in places like the North East, supporting both the government’s climate goals and its levelling up ambitions.”

Rob Bloom, Delta-EE:
“A standard for clean hydrogen and a contract for difference style incentive for hydrogen production by 2022 are truly ambitious targets that will be vital in the development of new market mechanisms and business models to help drive the development of the sector. However, the strategy lacks the ambition to be “world-leading”. By 2030, Germany is providing €9B in funding and targeting 5GW solely for green hydrogen production, while France is providing €7B and targeting 6.5GW of “carbon free” production. The UK, with far less than £1B announced and a target of 5GW that includes blue hydrogen, could be considered unambitious.
“By including blue hydrogen in its target for production, the UK has certainly set itself apart from most European nations. However, it remains to be seen whether there will be separate approaches for blue and green hydrogen in the forthcoming standards or whether a distinction will be made between these methods on carbon emissions – decisions that will undoubtedly affect the eventual split between these production methods.
“Come November, the eyes of the world stage will be upon us at COP 26, and yet it remains unclear how much of our 5GW of production will be renewable or fossil based, how big a role hydrogen will play in heating and whether we can truly call our strategy world-leading.”

Dan McGrail, chief executive, RenewableUK:
“While we welcome positive steps like the new Net Zero Hydrogen Fund, overall the strategy doesn’t focus nearly enough on developing the UK’s world-leading green hydrogen industry.
“In the year when the UK is hosting the biggest climate change summit for years, we fear that international investors in renewable hydrogen may compare this strategy to those of other countries and vote with their feet. The Government must use the current consultation period to amend its plans and set out a clear ambition for green hydrogen.
“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.
“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”.

David Smith, chief executive, Energy Networks Association:
“This is a much needed and welcome first step for the development of the UK’s hydrogen economy. It puts in place the right pieces for Britain’s energy networks to act as the platform on which the UK’s hydrogen ambitions will be built, recognising the importance of hydrogen blending and investing in innovation.
“We need further recognition that for hydrogen to play its part in Net Zero, producing 5GW of hydrogen by 2030 will not be enough. We must set our sights higher, towards a figure twice that amount.”

Nick Molho, executive director, Aldersgate Group:
“The government’s consultation on business models to make large-scale low carbon hydrogen production commercially viable and the commitment to develop a credible standard to ensure UK hydrogen production is consistent with the net zero target are two important steps forward. Low carbon hydrogen has a crucial role to play in cutting emissions in complex sectors of the economy, such as long-range road transport and heavy industry in both clustered and dispersed sites. The key to ramping up production and cutting the cost of low carbon hydrogen will be to pursue meaningful demonstration projects in sectors such as steel, co-ordinate the deployment of supportive infrastructure, support investment in skills, and provide rapid clarity on the market mechanisms industry can rely on to make a predictable return on investment.”
“The government’s hydrogen production strategy must take into account the fact that different types of hydrogen are at different stages of development. They therefore have different requirements in terms of the innovation, infrastructure and policy support they require, with green electrolysis for example needing support to scale up over time from pilot trials initially to large commercial scale projects. Given the currently limited availability of low-carbon hydrogen, it will be essential that the use of hydrogen is first of all prioritised towards areas where few low carbon alternatives exist to cut emissions, such as in heavy industry and long-distance transport.”

Steve Scrimshaw, Vice President, Siemens Energy UK&I:
“We welcome the publication of the Hydrogen Strategy which sets a clear roadmap for the development of this important sector. In order to make this a reality, we now need to see a real pipeline of projects come to life. Not only will this action start us on the path to deep decarbonisation across many sectors, but it will also provide certainty to the supply chain that the UK is a good place to invest.”

Professor Joe Howe, chair, North West Hydrogen Alliance and executive director, Thornton Research Institute at the University of Chester:
“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 government delivers on the strategy by supporting projects like HyNet North West. We particularly welcome the commitment to developing a Hydrogen Sector Development Action Plan to ensure that the huge economic benefits from hydrogen are kept in the UK, supporting our businesses and creating new jobs. If we’re to bring people along with us on this hydrogen revolution then now’s the time to start raising public awareness of hydrogen and how it can help us reduce our carbon emissions and protect our planet.”

David Parkin, HyNet NorthWest Project Director from Progressive Energy:
“Industry across the UK’s North West industrial heartland is crying out for low carbon hydrogen so we welcome the promise of more support. HyNet is driven by demand from organisations across the region who are committed to the decarbonisation of their processes. This includes over 20 major industrials, many of whom are households names, who have signed up to switch to HyNet hydrogen, replacing the natural gas fossil fuel they currently use to support the drive to net zero.
“We are working at pace. With initial engineering nearly completed on HyNet’s first hydrogen production plant at Essar’s Stanlow Manufacturing Complex, hydrogen production will begin as soon as 2025 and deliver up to 4GW of low carbon hydrogen by 2030 – nearly 80% of the UK target in the new hydrogen strategy. Large scale demonstrations of industrial fuel switching from natural gas will begin shortly with NSG Pilkington in the world’s first large scale glass manufacturing using hydrogen.
“The key now is for the government to build momentum by prioritising projects that are ready for development today. The sooner we get hydrogen to business, the better they can protect jobs and compete internationally while cutting emissions. The UK should seize the opportunity to lead the world in hydrogen as it did offshore wind.”

Laura Bishop, chair, Ground Source Heat Pump Association:
“We welcome the government’s ambitions to develop the hydrogen economy in the UK. However the country has to get moving with decarbonising heat if it’s to reach the Net Zero targets. Heating peoples’ homes by using green hydrogen is certainly an option – albeit a costly one – but is highly optimistic given the short timeframe that we have to address Net Zero and the climate emergency.
“Heat pumps are a proven and efficient heating technology, and their costs will fall as investment in UK heat pump manufacturing and installation increases. We await the government’s Heat & Building Strategy that I’m sure will provide a clear roadmap for the UK to crack on with decarbonising the country’s housing stock now rather than at some uncertain time in the future.”

Mike Foster, chief executive, Energy and Utilities Alliance:
“The UK’s Hydrogen Strategy represents a huge step in the right direction for the introduction of the technology, something the heating industry is rallying behind in the decarbonisation process. The government’s commitment to hydrogen is a promising step, which will help to create thousands of jobs and decarbonise homes for millions of consumers with minimal disruption. We are enthused to see the government also recognise the role a hydrogen blend into the grid will play in reducing carbon emissions without homeowners needing to change appliances or boilers. It is of great importance that the transition to hydrogen does not cause disruption or large costs to consumers. The blend is a way to significantly reduce emissions with no change, which will in turn leave time for the groundwork to be laid for a seamless switch to 100% hydrogen later on.
“We also welcome Business & Energy Secretary Kwasi Kwarteng’s recognition of hydrogen’s potential for decarbonising heat in homes and commercial buildings across the country. Giving consumers choice when it comes to low carbon heating is vital to ensuring all buildings can be suitably decarbonised to hit targets set out by government. Research conducted in our recent report Too Close To Home revealed 72% of homeowners supported efforts of UK manufacturers to develop low carbon gas boilers, such as hydrogen boilers. The establishment of a Hydrogen Strategy will be to ensure this consumer sentiment is met, and disruption is limited in the renewable transition.
“The creation of jobs is a welcome aspect of the strategy but will also play a part in the preservation of jobs for the over 120,000 gas engineers working across the UK. Likely requiring only one extra module to be taken on the compulsory Gas Safe engineering qualification, the installation and servicing of hydrogen-ready boilers is set to be very similar to their traditional counterparts. Given heating installers will play an integral role in preparing for the transition should the decision be made in 2026, it is vital that their jobs are protected as part of renewable development.
“We in the heating industry are committed to do all that we can to work with the government ahead of its decision in 2026 on the role of hydrogen in decarbonising heat. A number of EUA members have been at the forefront of developing hydrogen heating technologies to ease the transition for homeowners and ensure cost to them is no more than with natural gas equivalents. With the establishment of this strategy, UK consumers and businesses have more choice across low-carbon energy mix, an integral part of ensuring no one is left being in the renewable transition.”