Paul Rodden • Season: 2023 • Episode: 273
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Welcome to The Hydrogen Podcast!
In episode 273, The UK announces their hydrogen production roadmap with a surprising and refreshing vision. I’ll go over the report and give my thoughts on today’s hydrogen podcast.
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Transcript:
The UK announces their hydrogen production roadmap with a surprising and refreshing vision. I’ll go over the report and give my thoughts on today’s hydrogen podcast.
So the big questions in the energy industry today are, how is hydrogen the primary driving force behind the evolution of energy? Where’s capital being deployed for hydrogen projects globally? And where are the best investment opportunities for early adopters who recognize the importance of hydrogen? I will address the critical issues and give you the information you need to deploy capital. Those are the questions that will unlock the potential of hydrogen and this podcast will give you the answers. My name is Paul Rodden and welcome to the hydrogen podcast.
In an article in reuters.com Marwa Rashad writes, UK to back 11 Green hydrogen projects under two and a half billion dollar fund, Britain’s Energy Security Secretary Claire Coutinho announced on Thursday of last week, backing 11 projects to produce green hydrogen as part of the government’s 2 billion pound funding to be committed over the next 15 years. The 11 successful projects with capacity totaling 125 megawatts were selected to be offered under contracts under the government’s first hydrogen allocation round launched in July of 2022. Britain has a target to reach net zero emissions by 2050. And green hydrogen made by using renewable energy to split water is seen as one of the key sectors that will help achieve this target and provide cleaner fuel for energy intensive industries and transport.
According to Coutinho. Hydrogen presents a massive economic opportunity for the UK unlocking over 12,000 jobs and up to 11 billion pounds of investment by 2030. She also added that today’s announcement represents the largest number of commercial scale green hydrogen production projects announced at once anywhere in Europe. In return for the government support the successful projects will invest over 400 million pounds in the next three years, generating more than 700 jobs and local communities across the UK and delivering 125 megawatts of new hydrogen for businesses. The 11 projects have been agreed at a weighted average strike price of 241 pounds per megawatt hour. Storegga and Scottish Power’s Cromarty hydrogen scheme is among the list of projects set to receive a guaranteed price for its output. Okay, so some big government funding news coming out of the UK this being reported as the UK Department for Energy Security and Net Zero launch their hydrogen production delivery roadmap. Well, the full release is too extensive.
To review on the show, I will go over the executive summary now. Hydrogen Production Delivery Roadmap 4 Executive Summary In the two and a half years since the publication of the UK Hydrogen Strategy we have made rapid progress and are now firmly in delivery mode, supporting projects to move us closer to our hydrogen ambitions. We have announced the first round of successful projects under the electrolytic Hydrogen Allocation Round (HAR1) worth 125MW, in addition to the 34MW through round 1 of strand 2 of the Net Zero Hydrogen Fund (NZHF). The second Hydrogen Allocation Round (HAR2), which is over three times the size of HAR1, is now underway, and the contracts from round two of the NZHF strands 1 and 2 will be announced in the new year. This progress has been possible due to the UK’s strong policy framework for growing hydrogen production – including our Hydrogen Production Business Model, Low Carbon Hydrogen Agreement and our Low Carbon Hydrogen Standard.
Together this has proved an investable model which has leveraged private investment to kick start the UK’s hydrogen economy. It is our ambition to have up to 10GW of low carbon hydrogen production capacity by 2030, subject to affordability and value for money, with at least half of this coming from electrolytic hydrogen. In addition to this, our near-term aim is to have up to 1GW of electrolytic hydrogen and up to 1GW of carbon capture, usage, and storage (CCUS) enabled hydrogen in construction or operation by 2025. For the next stage of growth, we need to make sure the right conditions are in place as we continue to nurture this nascent market and push towards our 2030 ambition. We will continue our engagement with stakeholders to make sure our policies are developing alongside industry need.
This Hydrogen Production Delivery Roadmap sets out our vision for hydrogen production to 2035, with ambitions to: • Allocate up to 4GW of our 2030 ambition to CCUS enabled hydrogen through CCUS allocation rounds for Track-1, Track-1 expansion and Track-2, subject to project assessment, cluster assessment and successful negotiations with projects. • Allocate up to 6GW of our 2030 ambition to electrolytic production, with alternative technologies also contributing towards this total. • Run annual allocation rounds for electrolytic projects, and potentially alternative technologies, between 2025-2030. • Allocate up to 875MW in HAR2. • Allocate up to 1.5GW across both HAR3 and HAR4 which are expected to launch in 2025 and 2026 respectively. Review our deployment trajectory in 2025 in light of learnings from early projects, the evolving evidence base and strategic decisions on the use of hydrogen, taking into consideration emerging evidence on cost reductions, innovation, infrastructure requirements and demand-side developments. Achieving this ambitious deployment trajectory will be subject to affordability and value for money, and we will look to industry to rise to the challenge of demonstrating significant cost reductions as the UK hydrogen sector takes off. Key to this, will be working with demand sectors to maximise this opportunity and develop a competitive marketplace that can drive investment and push costs down as we establish our hydrogen transport and storage infrastructure.
Our hydrogen ambitions can drive investment into the UK and help ensure fair opportunities for UK companies in the supply chain and our skills base, as well as wider economic benefits to all regions of the country. As the hydrogen production landscape develops, we expect to see CCUS enabled hydrogen supporting decarbonisation in the industrial clusters, and increasingly large electrolytic projects sited in locations that allow us to take advantage of the deployment of renewable electricity generation. Transport and storage (T&S) infrastructure will be needed to connect and balance this production with demand. We are publishing a Hydrogen T&S Networks Pathway alongside this Roadmap that identifies supporting emerging regional networks centred on availability of storage and credible regional production and demand as the priority for early T&S infrastructure.
In support of increased hydrogen production, we will continue to deliver our business models, policies on transport and storage, regulation, standards and certification, sector development and demand, as set out elsewhere in this Roadmap and accompanying publications. Okay, so the UK hydrogen production roadmap is out with some interesting bits of information. The first that stands out to me is the aggressive timeline. The hydrogen allocation rounds one and two have already been launched with heart three and four to launch in 2025 and 26, respectively, with the contract for heart to being awarded, and 2025, hard three and 2026 and hard four and 2027. That being the same year, they’re targeting hard to to come online with three and four in the following years.
And starting in 2027 will be the hard five through seven programs that will look for continued cost reductions and increasing demand for growing capacity. Now in the past, I’ve been critical of the UK and the methodology they’ve taken to jump into new energy systems without allowing the transition to occur. And it’s bitten them quite hard on occasion. But I like this report. The timing is aggressive, but tempered by the understanding that the cost will need to fall through economies of scale and a vision that demand will increase. Other aspects of this plan that I find refreshing is the reliance on thermallytic hydrogen with a natural gas feedstock and leveraging CCUS to its fullest capacity.
This is the pathway towards achieving their carbon intensity ambitions, adopt SMR technologies, embrace CCUS allow electrolysis to develop while the hydrogen demand grows and migrate the hydrogen generation technologies when cost parity is achieved. But like I said, this is an aggressive timeline, and one that I hope is reached as energy demand in the UK is showing no signs of slowing down.
Alright, that’s it for me, everyone. If you have a second, I would really appreciate it. If you could leave a good review on whatever platform it is that you listen to Apple podcasts, Spotify, Google, YouTube, whatever it is, that would be a tremendous help to the show. And as always, if you ever have any feedback, you’re welcome to email me directly at info@thehydrogenpodcast.com.
So until next time, keep your eyes up and honor one another. Hey, this is Paul. I hope you liked this podcast. If you did and want to hear more. I’d appreciate it if you would either subscribe to this channel. on YouTube or connect with your favorite platform through my website at www.thehydrogenpodcast.com Thanks for listening. I very much appreciate it. Have a great day.
