August 23, 2021 • Paul Rodden • Season: 2021 • Episode: 40
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In episode 040, The UK has finally done it. They've officially released their hydrogen strategy plan leading off with a press release, which I'll go through on today's hydrogen podcast.
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The UK has finally done it. They've officially released their hydrogen strategy plan leading off with a press release, which I'll go through 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 is 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.
The press release which was published on August 17 of 2021 hits the highlights of the 121 page documents that they released on the same day 10s of 1000s of jobs, billions of pounds and investment and new export opportunities will be unlocked through the government plans to create a thriving low carbon hydrogen sector in the UK over the next decade and beyond. The UK his first ever hydrogen strategy tries for the commitments laid out in the Prime Minister's ambitious 10 point plan for a green Industrial Revolution by setting the foundation for how the UK Government will work with industry to meet its ambition for a five gigawatt of low carbon hydrogen production capacity by 2030, the equivalent of replacing natural gas and powering around 3 million UK homes each year as well as powering transport and businesses, particularly heavy industry.
A booming UK wide hydrogen economy could be worth 900 million pounds and create over 9000 high quality jobs by 2030. Potentially rising to 100,000 jobs and worth up to 13 billion pounds by 2050. By 2030, Hydrogen could play an important role in decarbonizing polluting energy intensive industries like chemicals, oil refineries, power and heavy transport like shipping, HGV lorries and trains by helping these sectors move away from hydrocarbons. Low carbon hydrogen provides opportunities for UK companies and workers across our industrial heartlands, with government analysis suggesting that 20 to 35% of the UK energy consumption by 2050 could be hydrogen based, this new energy source could be critical to meet our targets of net zero emissions by 2050 and cutting emissions by 78% by 2035, which is a view shared by the UK independent climate change committee.
In the UK, a low carbon hydrogen economy can deliver emission savings, equivalent to the carbon captured by 700 million trees by 2032 and is a key pillar of capitalizing on cleaner energy sources, as the UK moves away from hydrocarbons. According to Business and Energy Secretary Kwasi Kwarteng "Today marks the start of the UK hydrogen revolution. This homegrown clean energy source has a potential to transform the way we power our lives, it will be essential to tackling climate change and reaching net zero and with potential to provide a third of the UK energy in the future. Our strategy positions the UK as a first in the global race to ramp up hydrogen technology and seize the 1000s of jobs and private investment that come with it."
And according to energy and climate change minister Anne-Marie Trevelyan, today's hydrogen strategy sends a strong signal globally, we are committed to building a thriving low carbon hydrogen economy that could deliver hundreds of 1000s of high quality green jobs, helps millions of homes transition to green energy, and support our key industrial heartlands to move away from hydrocarbons and bring in significant investment. The government's approach is based on the UK his previous success with offshore wind, or early government action coupled with strong private sector backing has earned the UK a world leading status. One of the main tools used by government to support the establishment of offshore wind in the UK was the contracts for difference CFD scheme, which incentivizes 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. As such, the government has today launched a public consultation on a preferred hydrogen business model, which built on similar premise to the offshore wind CFDs is designed to overcome the cost gap between low carbon hydrogen and hydrocarbons, helping the cost 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 pound netzero hydrogen Fund, which aims to support the commercial deployment of new low carbon hydrogen production plants across the UK. Other measures included in the UK his first ever hydrogen strategy are outlining a twin Track approach to supporting multiple technologies, including green electro lytic, and blue carbon capture enabled hydrogen production and committing to providing further detail in 2022 on the government's production strategy. Next is collaborating with industry to develop a UK standard for low carbon hydrogen, giving certainty to producers and users that the hydrogen in the UK produces is consistent with net zero while supporting the deployment of hydrogen across the country. Next is undertaking a review to support the development of the necessary network and storage infrastructure to underpin a thriving hydrogen sector. Another measurement includes working with industry to assess the safety technical feasibility, and cost effectiveness of mixing 20% hydrogen into the existing gas supply. Doing so could deliver a 7% emissions reduction on natural gas and lastly, launching a hydrogen sector development action plan in early 2022. setting out how the government will support companies to secure supply chain opportunities, skills and jobs and hydrogen, prioritizing and supporting polluting industries to significantly slashed their emissions.
The government also announced 105 million pound funding package through its net zero initiative portfolio that will act as a first step to build up Britain's low carbon hydrogen economy. The investment will help industries to develop low carbon alternatives for industrial fuels, including hydrogen, which will be key to meeting climate commitments. This includes a 55 million pound industrial fuel switching competition. funding will support the development and trials of solutions to switch industry from high to low carbon fuels, such as natural gas to clean hydrogen, helping industry reach net zero by 2050. The plan also calls for a 40 million pound red diesel replacement competition, providing grant funding for the development and demonstration of low carbon alternatives to diesel for the construction, quarrying and mining sectors. with the aim of decarbonizing these industries reliant on red diesel fuel use mainly for off road purposes such as bulldozers, with red diesel responsible for the production of nearly 14 million tons of carbon each year. Investment supports the UK government's budget announcement removing the entitlement to use red diesel and rebated biodiesel, and lastly, a 10 million pound industrial energy efficiency accelerator Fund, which is offering funding to clean technology developers to work with industrial sites to install, test and prove solutions for reducing UK industrial energy and resource consumption.
This announcement comes as the transport Secretary unveils the winners of a two and a half million pound r&d competition for hydrogen transport pilots and the tees Valley area, which will lead to supermarkets, emergency services and delivery companies, which are currently trialing hydrogen powered transports to move goods and carry out local services. The press release goes on to say that hydrogen can be made as safe as natural gas. As the hydrogen economy develops, all necessary assessments will be carried out and measures were put in place to ensure that hydrogen is stored distributed and used in a safe way. UK Government is already working with the Health and Safety Executive and energy regulator Off Jim to support the industry to conduct first of a kind hydrogen heating trials. These trials along with the results of a wider research and development testing program will inform a UK Government decision in 2026 on the role of hydrogen in decarbonising heat. If a positive case is established by 2035.
Hydrogen could be playing a significant role in heating people's homes and businesses, powering cars, cookers, boilers and more helping to slash carbon emissions from the UK's heating system and tackle climate change. The hydrogen strategy is one of a series of strategies the UK Government is publishing ahead of the UN Climate Summit COP 26 taking place in Glasgow this November, UK Government has already published its industrial decarbonisation strategy, transport decarbonisation strategy and North Sea transition deal. Well, it's heat and buildings and zero strategies we published this year. The hydrogen strategy also looked at four case studies. These include in Scotland, the acorn hydrogen project, which is located in St. Fergus, which is taking advantage of existing oil and gas infrastructure to reform North Sea natural gas and a low carbon hydrogen, with the emissions created from generating the hydrogen safely removed and stored through carbon capture usage and storage. The project is being led by Storegga with funding and support from industry partners, including harbor energy shell, the UK and Scottish Government's along with European Union.
The second case study is in Northern Ireland, which is the development of hydrogen powered buses by Wright Bus in Belfast. The company has invested heavily into developing hydrogen fuel cell buses, and there's received over 8 billion pounds over the last four years from government research and development funding for the automotive sector. Also in Wales, in Port Talbot a project by Hansen Cement is demonstrating how hydrogen from renewable energy can help decarbonize cement manufacturing. And lastly in England, as part of the BEIS funded high net industrial fuel switching competition. Unilever, alongside Progressive Energy are running a trial to switch an onsite natural gas fired boiler to hydrogen. The boiler located at Unilever's port sunlight facility raises steam used for the manufacture of home and personal care products. further support the UK Government is providing for hydrogen projects include 1. a 240 million pound netzero hydrogen fund to support new hydrogen production projects 2. a hydrogen business model to stimulate private investment in new low carbon hydrogen projects. 3. Phase two of the 315 million pound industrial energy transformation fund to support industry to switch to low carbon fuels which includes hydrogen. 4.
Up to 60 million pounds through the low carbon hydrogen supply two competition to support innovative hydrogen production, transport and storage technologies 5. 68 million pounds longer duration energy storage demonstration competition, six worldleading trials of hydrogen for heating including a hydrogen neighborhood trial by 2023 hydrogen village trial by 2025 and potential pilot hydrogen town by the end of the decade. And lastly number seven up to 183 million pounds for transportation decarbonisation, including trials and rollouts of hydrogen technology for buses, HGV lorries, shipping and aviation, which includes up to 120 million pounds this year through the zero emission bus regional areas scheme towards 4000 new zero emission buses, either hydrogen or battery electric and infrastructure needed to support them.
20 million pounds this year to design trials for both electric road system and hydrogen long haul heavy road vehicles and to run a battery electric trial to establish the feasibility deliverability, costs and benefits of each technology. Up to 20 million pounds this year for the clean maritime demonstration competition, up to 15 million pounds this year for the green fuels green skies competition to support the production of a first of a kind sustainable aviation fuel plants in the UK. And lastly, 3 million pounds this year to support the development of a hydrogen transport hub in Tees Valley and four and a half million pounds to support the development of a hydrogen hub in Holyhead, Wales.
Alright, that's it for me, everyone. If you have any questions, comments or concerns about today's episode, I'd very much love to hear from you. And your thoughts in the UK hydrogen strategy. What do you think about it? Come and visit me at my website at thehydrogenpodcast.com and let me know. And as always, take care. Stay safe. I'll talk to you later.
Hey, this is Paul. I hope you'd like this podcast. If you did 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.