On the 17th of August the UK government released its proposed hydrogen strategy for consultation.
The strategy explains how the government plans to develop the UK hydrogen sector in a way that will both reduce the UK’s carbon footprint in line with the ambitious net zero goals the UK has committed to and, at the same time, stimulate jobs and economic growth.
More specifically, the strategy sets out how the UK plans to invest £4 billion to become a world leader in the hydrogen space by 2030, creating more than 9,000 plus jobs in the process. It also includes the government’s plan to drive decarbonisation in a range of industry sectors that are unsuitable for electrification including the chemical industry, heavy manufacturing, and transport and replace natural gas as the predominant source of power in up to three million homes per year.
In the 10 Point Green Industrial Revolution plan released in November 2020, the government committed to setting a strategy that would allow it to work alongside industry to reach its goal of having the capacity to produce 5GW of low carbon hydrogen by 2030.
A major part of the strategy is the implementation of a £240m Net Zero Hydrogen Fund. The fund will support the development of new low carbon hydrogen production plants all over the UK and the creation of jobs, skills, and supply chain these plants will need to succeed.
The plan also sets out to provide additional support including:
- Devising accepted UK standards for low carbon hydrogen.
- An arrangement similar to the Contracts for Difference (CfD) scheme designed to offer those involved in the wind energy sector protection against cost volatility.
- A ‘twin-track approach’ that will encourage the development of both green and blue hydrogen production.
- A review of the infrastructure that will be needed to make sure hydrogen power achieves its potential.
- A collaboration with industry to ensure that mixing hydrogen into our existing gas supply to reduce emissions is definitely safe and feasible.
Although the consultation was only announced a week ago, the initial reaction from industry has been supportive.
Matthew Fell, policy director for the Confederation of British Industry called it “a key milestone in the delivery of the 10 point plan that will help the UK capitalise on the opportunities presented by hydrogen”.
Anthony Green, hydrogen director at The National Grid believes the paper is a step towards “unlocking the potential of hydrogen as a clean energy solution” and “triggering the investment and buy-in needed to achieve this.”
Others have been a little more cautious. Professor Rob Gross, director of the UK Energy Research Centre, was quick to remind us that the “challenge is huge” and there is “still a long, long way to go” in terms of working out how best to use the additional clean hydrogen that will be produced if the strategy is launched successfully.
It is also important to remember the consultation won’t close until the 25th of October 2021. This means any final decisions won’t be expected until probably the middle of 2022, which in turn means we are unlikely to see the economic benefits until at least the first quarter of 2023.
However, as the release of the strategy is a clear statement of intent, we do not expect the timeline for the consultation and implementation to affect the plans of many market participants.
In any case, for this strategy to be a success, it will need to be underpinned by new inventions, new products, new processes, and pioneering new ways of doing things. Certainly, the UK hydrogen sector has been highly innovative in recent years and as patent attorneys we look forward to working with even more new hydrogen technologies as this exciting new chapter in the UK’s renewable energy story is written.
