RenewableUK, the UK's representative body for renewable energy, has released a new report calling on the UK Government to work closely with the green hydrogen industry to accelerate the development of large-scale projects. The report warns that the UK is at a critical juncture, with other countries taking steps to overtake it in the global race to create jobs and attract private investment in green hydrogen. The report recommends that the UK Government needs to implement new policies to enable the country to step up the rate at which it builds major projects as fast as possible.
The report entitled Surveying the UK's Green Hydrogen Supply Chain Capability warns that the UK needs to develop a new market big enough to grow new supply chains and kickstart a major new green energy industry at scale. The UK is home to electrolyser companies like ITM Power and Ceres whose cutting-edge technology has been licensed worldwide. However, only 4MW of the UK's pipeline of electrolyser projects are currently fully operational, according to the report.
The UK Government has set a target of 10GW of low carbon hydrogen by 2030, at least half of which will be green hydrogen. The report recommends building multiple large-scale projects as soon as possible to demonstrate that there is a viable market for investors and suppliers. The Hydrogen Business Model and the Net Zero Hydrogen Fund are government support schemes that will play key roles in this, so their roll-out needs to be speeded up.
The report recommends that Ministers should consider consulting with the industry and setting up a joint working group to establish how tax incentives and other financial institutions, such as the UK Infrastructure Bank, could be used to make the UK a more competitive market for investment in the green hydrogen supply chain.
RenewableUK's senior policy analyst for emerging technologies, Laurie Heyworth, said, “The UK has the potential to become a global leader in green hydrogen. We're at a pivotal moment at which we can take decisive strategic action, enabling us to seize the opportunity to deliver growth and jobs by developing robust local supply chains in the burgeoning green hydrogen industry, creating opportunities to export our technology worldwide.”
The report also recommends the UK establish a roadmap setting out in detail how the UK can reach at least 5GW of green hydrogen by 2030. New pipelines will be needed to carry green hydrogen both locally and to markets in Europe, as well as underground storage in disused gas fields, so the UK must take swift action to invest in this infrastructure ahead of time.
Most green hydrogen will be produced using electricity generated by offshore wind, so a detailed study of how these technologies can operate alongside each other would also help to create more flexibility in the electricity system, strengthening Britain's energy security, the report concludes.
If the UK does not step up, it risks being left behind due to ambitious tax incentives and subsidies offered abroad, such as the United States Inflation Reduction Act, which may attract investment and prospective suppliers away from this country, the report adds.
The development of green hydrogen has been hampered by a lack of clear policy direction and investment in comparison to blue hydrogen made from fossil fuels. The report sets out how these issues can be addressed, with industry and Government working together to maximise the economic and environmental benefits which this innovative technology offers. The UK has a unique opportunity to become a global leader in green hydrogen, and this report provides a roadmap to achieve this goal.
