Understanding the backdrop of the UK hydrogen economy

We are delighted to publish our research note on the hydrogen sector: ‘Understanding the backdrop of the UK hydrogen economy’. Serving as a primer for our upcoming series of hydrogen insight papers, we chart the UK’s progress in developing a hydrogen industry.

In our paper, we cover essential developments in hydrogen policy, production methods and types of hydrogen. We expect hydrogen produced through electrolysis to lay the foundations of all green hydrogen production in the UK.

We also look at the challenges the UK faces in transitioning sections of its economy to support the fuel. Key issues to consider in the creation of a hydrogen economy are gas infrastructure repurposing and the development of industrial hydrogen clusters.

The publication of our paper follows the Conservative Party Conference 2020, which ran from 4-7 October. In his keynote speech on 6 October, Prime Minister Boris Johnson outlined new plans to make the UK a world leader in green energy. Although the Prime Minister focused primarily on the potential of offshore wind, he asked his audience to imagine a future with high-skilled, green-collar jobs in hydrogen, and a 2030 Britain where “some of the trucks are actually running on hydrogen, and even some of the trains”. We reference this potential in our paper, noting that the first-ever hydrogen-powered train ran on the UK mainline on 30 September.

Steve Scrimshaw, Vice President at Siemens Energy UK&I, picked up on the potential relationship between offshore wind and hydrogen in a response to the announcement, saying: “offshore wind with hydrogen energy storage can provide reliable clean energy and will be vital to achieving net zero”. Again, we note in our paper that offshore wind developments as well as gas pipeline terminals are prime locations given these infrastructures help create, store and transport hydrogen.

The government’s commitments represent the first stage outlined as part of a ten-point plan for a green industrial revolution, which is expected to include ambitious targets and major investment into industries, innovation and infrastructure that will accelerate the UK’s path to net zero by 2050. We certainly expect hydrogen to play a significant role in the net zero transition, and it is likely it will be recognised in this respect in the government’s much anticipated Energy White Paper and the National Infrastructure Strategy. Moreover, in a House of Lords session in September this year, Parliamentary Under Secretary of State at BEIS Lord Callanan explained that the government’s Hydrogen Advisory Council and its working groups will inform the development of a UK hydrogen strategy, which he said will be published in early 2021.

The application of hydrogen in the transport, heat, industrial and energy storage sectors, which are touched on in our research note, will be treated independently and in more detail in subsequent insight papers. In the meantime, you can download a copy of our research note, which introduces these topics, here.

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