Government plans to create a low carbon hydrogen sector in the UK over the next decade have been set out.

The UK’s first-ever Hydrogen Strategy takes forward the commitments laid out in the Prime Minister’s 10 Point Plan for a green industrial revolution by setting the foundation for how the Government will work with industry to meet its ambition for 5GW of low carbon hydrogen production capacity by 2030.

The Government predicts that a UK-wide hydrogen economy could be worth £900m and create over 9,000 jobs by 2030, potentially rising to 100,000 jobs and worth up to £13bn by 2050.

Analysis suggests that 20-35 per cent of the UK’s energy consumption by 2050 could be hydrogen-based and cut emissions by 78 per cent by 2035 – a view shared by the UK’s independent Climate Change Committee.

The Government’s approach is based on the UK’s previous success with offshore wind, where 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 incentivises 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, it has launched a public consultation on a preferred hydrogen business model which, built on a similar premise to the offshore wind CfDs, to overcome the cost gap between low carbon hydrogen and fossil fuels, helping the costs of low-carbon alternatives to fall quickly. Alongside this, the Government is consulting on the design of the £240m Net Zero Hydrogen Fund, which aims to support the commercial deployment of new low carbon hydrogen production plants across the UK.

Other measures included in the Hydrogen Strategy include outlining a ‘twin track’ approach to supporting multiple technologies including ‘green’ electrolytic and ‘blue’ carbon capture-enabled hydrogen production and working with industry to assess the safety, technical feasibility, and cost effectiveness of mixing 20 per cent hydrogen into the existing gas supply.

Commenting on the Government’s Hydrogen Strategy, RenewableUK’s CEO Dan McGrail said: “While we welcome positive steps like the new Net Zero Hydrogen Fund, overall the strategy doesn’t focus nearly enough on developing the UK’s world-leading green hydrogen industry. The UK has the potential to generate vast quantities of renewable hydrogen using clean electricity from offshore wind which can be stored and used whenever it’s needed, providing flexibility to our energy system. Green hydrogen is a clean fuel for sectors which have proved difficult to decarbonise so far, such as shipping and heat for heavy industry.”

The Hydrogen Strategy is one of a series of strategies the Government is publishing ahead of the UN Climate Summit COP26 taking place in Glasgow this November. It has already published its Industrial Decarbonisation Strategy, Transport Decarbonisation Strategy and North Sea Transition Deal, while its Heat and Buildings and Net Zero Strategies will be published this year.

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