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Released August 23, 2021 | GALWAY, IRELAND
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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--The U.K. government has outlined ambitious plans to create a thriving hydrogen economy that will attract at least £4 billion (US$5.5 billion) in investment by the end of the decade.
In its first Hydrogen Strategy roadmap, the government committed to working with industry to meet its ambition for 5 gigawatts (GW) of low-carbon hydrogen production capacity by 2030--the equivalent of replacing natural gas in powering about 3 million U.K. homes each year as well as powering transport and businesses, particularly heavy industry.
Industrial Info is tracking all of the key hydrogen projects in the U.K.. These cover "green hydrogen" projects that extract hydrogen from water using electrolysers powered by renewable energy, leaving only oxygen as a byproduct, and "blue hydrogen" schemes, which extract hydrogen from fossil fuel gas and then capture most of the emissions with a variety of carbon capture and storage (CCS) solutions. Many of the projects are smaller demonstrator projects in the 2-10-megawatt (MW) range, but there are some ambitious commercial-scale efforts. The U.K. government aims to create a twin-track support mechanism for both types of hydrogen production but did not give any details on the level of funding support nor timeline.
It maintained that its hydrogen economy could be worth £900 million (US$1.2 billion) and create more than 9,000 high-quality jobs by 2030, potentially rising to 100,000 jobs and worth up to £13 billion (US$17.8 billion) by 2050. It believes that by the end of the decade hydrogen could play an important role in decarbonising polluting, energy-intensive industries like chemicals, oil refineries, power and heavy transport like shipping, HGV lorries and trains.
U.K. Energy & Climate Change Minister Anne-Marie Trevelyan explained: "The government's approach is based on the U.K.'s previous success with offshore wind, where early government action coupled with strong private sector backing has earned the U.K. a world-leading status. One of the main tools used by government to support the establishment of offshore wind in the U.K. was the Contracts for Difference (CfD) scheme, which incentivises investment in renewable energy by providing developers with direct protection from volatile wholesale prices and protects consumers from paying increased support costs when electricity prices are high."
She added: "The government has today launched a public consultation on a preferred hydrogen business model which, built on a similar premise to the offshore wind CfDs, is designed to overcome the cost gap between low carbon hydrogen and fossil fuels, helping the costs of low-carbon alternatives to fall quickly, as hydrogen comes to play an increasing role in our lives. Alongside this, the government is consulting on the design of the £240 million (US$369 million) Net Zero Hydrogen Fund, which aims to support the commercial deployment of new low carbon hydrogen production plants across the U.K.."
Although welcomed, the U.K.'s plans have been branded as not ambitious enough by many leading industrial groups. "We support the 'twin-track' approach, which will help us scale up and decarbonise more quickly," commented Celia Greaves, chief executive officer of U.K. Hydrogen and Fuel Cell Association. "However, we believe that the Strategy could have been more ambitious. Industry believes that with the right support, a 20-GW mix of green and blue hydrogen power could be deployed by 2030. That is four times more than the Government has planned for. Government needs to introduce business models that are attractive and workable for both green and blue hydrogen and reflect their different characteristics. The sooner these models are decided, the quicker investment in generating capacity can be unlocked."
In contrast, the European Union (EU) has already outlined ambitious hydrogen plans. The first phase (2020-24) calls for the installation of at least 6 GW of renewable hydrogen electrolysers in the EU by 2024, capable of producing up to one 1 tonnes of renewable hydrogen. At present, the EU has 1 GW of electrolysers installed. The next phase (2024-30) aims to make hydrogen part of an integrated energy system and will see the installation of at least 40-GW of renewable hydrogen electrolysers by 2030 to produce 10 million tonnes of renewable hydrogen. European countries including Germany and the Netherlands and Germany already have 14 GW and 15 GW of respective hydrogen projects in the pipeline.
Earlier this year, Industrial Info reported that oil and gas major BP plc (NYSE:BP) (London, England) proposed the U.K.'s largest planned hydrogen project, H2Teesside. Located in the heavily industrialized Teesside region it would be capable of producing up to 1 GW of "blue hydrogen". Hydrogen generated by the BP facility would be used to power industrial sites and homes, as a fuel for heavy transport, and in the production of sustainable fuels. The company sees collaboration as the key and will be integrating H2Teesside with the region's already-planned Net Zero Teesside (NZT) and Northern Endurance Partnership (NEP) carbon capture use and storage (CCUS) projects, both of which are led by BP as operator. For additional information, see March 29, 2021, article--BP Proposes U.K.'s Largest "Blue Hydrogen'' Project.
There is also "Project Cavendish" on the Isle of Grain in southeast England, where National Grid and partners continue preliminary design for a grassroot 176-MW blue hydrogen facility that would supply London and the southeast. Cavendish could contribute 700 MW of blue hydrogen by 2026 and 1.75 GW by 2030, while offsetting 1.2 million tonnes of CO2 a year by 2026, rising to 3 million tonnes by 2030.
In April, SSE Thermal and Norwegian oil and gas major Equinor (NYSE:EQNR) (Stavengar, Norway) revealed plans to build one of the U.K.'s first power stations with carbon capture and storage (CCS) technology as well as a 100% hydrogen-fuelled power station. The two decarbonised power stations are positioned as a 'clean power hub' in the Humber region--the country's largest and most carbon-intensive industrial cluster. Keadby 3 is a planned 900-MW gas-fired power plant with carbon capture built-in from the outset. Keadby Hydrogen power station is presented as the 'world's first major 100% hydrogen-fired power station' and would have a peak demand of 1,800 MW of hydrogen. For additional information, see August, 2021, article--U.K. Carbon Capture and Hydrogen Power Projects Revealed.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
In its first Hydrogen Strategy roadmap, the government committed to working with industry to meet its ambition for 5 gigawatts (GW) of low-carbon hydrogen production capacity by 2030--the equivalent of replacing natural gas in powering about 3 million U.K. homes each year as well as powering transport and businesses, particularly heavy industry.
Industrial Info is tracking all of the key hydrogen projects in the U.K.. These cover "green hydrogen" projects that extract hydrogen from water using electrolysers powered by renewable energy, leaving only oxygen as a byproduct, and "blue hydrogen" schemes, which extract hydrogen from fossil fuel gas and then capture most of the emissions with a variety of carbon capture and storage (CCS) solutions. Many of the projects are smaller demonstrator projects in the 2-10-megawatt (MW) range, but there are some ambitious commercial-scale efforts. The U.K. government aims to create a twin-track support mechanism for both types of hydrogen production but did not give any details on the level of funding support nor timeline.
It maintained that its hydrogen economy could be worth £900 million (US$1.2 billion) and create more than 9,000 high-quality jobs by 2030, potentially rising to 100,000 jobs and worth up to £13 billion (US$17.8 billion) by 2050. It believes that by the end of the decade hydrogen could play an important role in decarbonising polluting, energy-intensive industries like chemicals, oil refineries, power and heavy transport like shipping, HGV lorries and trains.
U.K. Energy & Climate Change Minister Anne-Marie Trevelyan explained: "The government's approach is based on the U.K.'s previous success with offshore wind, where early government action coupled with strong private sector backing has earned the U.K. a world-leading status. One of the main tools used by government to support the establishment of offshore wind in the U.K. was the Contracts for Difference (CfD) scheme, which incentivises investment in renewable energy by providing developers with direct protection from volatile wholesale prices and protects consumers from paying increased support costs when electricity prices are high."
She added: "The government has today launched a public consultation on a preferred hydrogen business model which, built on a similar premise to the offshore wind CfDs, is designed to overcome the cost gap between low carbon hydrogen and fossil fuels, helping the costs of low-carbon alternatives to fall quickly, as hydrogen comes to play an increasing role in our lives. Alongside this, the government is consulting on the design of the £240 million (US$369 million) Net Zero Hydrogen Fund, which aims to support the commercial deployment of new low carbon hydrogen production plants across the U.K.."
Although welcomed, the U.K.'s plans have been branded as not ambitious enough by many leading industrial groups. "We support the 'twin-track' approach, which will help us scale up and decarbonise more quickly," commented Celia Greaves, chief executive officer of U.K. Hydrogen and Fuel Cell Association. "However, we believe that the Strategy could have been more ambitious. Industry believes that with the right support, a 20-GW mix of green and blue hydrogen power could be deployed by 2030. That is four times more than the Government has planned for. Government needs to introduce business models that are attractive and workable for both green and blue hydrogen and reflect their different characteristics. The sooner these models are decided, the quicker investment in generating capacity can be unlocked."
In contrast, the European Union (EU) has already outlined ambitious hydrogen plans. The first phase (2020-24) calls for the installation of at least 6 GW of renewable hydrogen electrolysers in the EU by 2024, capable of producing up to one 1 tonnes of renewable hydrogen. At present, the EU has 1 GW of electrolysers installed. The next phase (2024-30) aims to make hydrogen part of an integrated energy system and will see the installation of at least 40-GW of renewable hydrogen electrolysers by 2030 to produce 10 million tonnes of renewable hydrogen. European countries including Germany and the Netherlands and Germany already have 14 GW and 15 GW of respective hydrogen projects in the pipeline.
Earlier this year, Industrial Info reported that oil and gas major BP plc (NYSE:BP) (London, England) proposed the U.K.'s largest planned hydrogen project, H2Teesside. Located in the heavily industrialized Teesside region it would be capable of producing up to 1 GW of "blue hydrogen". Hydrogen generated by the BP facility would be used to power industrial sites and homes, as a fuel for heavy transport, and in the production of sustainable fuels. The company sees collaboration as the key and will be integrating H2Teesside with the region's already-planned Net Zero Teesside (NZT) and Northern Endurance Partnership (NEP) carbon capture use and storage (CCUS) projects, both of which are led by BP as operator. For additional information, see March 29, 2021, article--BP Proposes U.K.'s Largest "Blue Hydrogen'' Project.
There is also "Project Cavendish" on the Isle of Grain in southeast England, where National Grid and partners continue preliminary design for a grassroot 176-MW blue hydrogen facility that would supply London and the southeast. Cavendish could contribute 700 MW of blue hydrogen by 2026 and 1.75 GW by 2030, while offsetting 1.2 million tonnes of CO2 a year by 2026, rising to 3 million tonnes by 2030.
In April, SSE Thermal and Norwegian oil and gas major Equinor (NYSE:EQNR) (Stavengar, Norway) revealed plans to build one of the U.K.'s first power stations with carbon capture and storage (CCS) technology as well as a 100% hydrogen-fuelled power station. The two decarbonised power stations are positioned as a 'clean power hub' in the Humber region--the country's largest and most carbon-intensive industrial cluster. Keadby 3 is a planned 900-MW gas-fired power plant with carbon capture built-in from the outset. Keadby Hydrogen power station is presented as the 'world's first major 100% hydrogen-fired power station' and would have a peak demand of 1,800 MW of hydrogen. For additional information, see August, 2021, article--U.K. Carbon Capture and Hydrogen Power Projects Revealed.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
