Hydrogen strategy 2021 | Key points
Date of Article
Aug 20 2021
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On Tuesday, 17th of August, the Secretary of State for Business, Energy & Industrial Strategy presented to Parliament the long-awaited UK Hydrogen Strategy.

Originally due for publication in Q1 of this year, the Hydrogen Strategy delivers a framework for the decarbonisation of the UK’s hydrogen production industry and outlines how the growth in the sector will allow low carbon hydrogen to play a vital role in providing cleaner energy to power our economy. 

In response, the Carter Jonas Infrastructure & Energy Team has summarised the following key points from this strategy:  

  • It is projected that 20-30% of the UK’s energy consumption could be hydrogen based by 2050. 

  • The government has set a target to produce 5GW of low carbon hydrogen by 2030. To achieve this, they hope to invest in developing a ‘dual track’ approach of ‘green’ hydrogen production, through renewable powered electrolysis, and ‘blue’ hydrogen production, from natural gas feedstocks, with the CO2 by-product from hydrogen production captured and stored. 

  • A public consultation on a preferred hydrogen business model which will be built on a similar premise to the offshore wind CfDs has been announced. Alongside this, the government is consulting on the design of the £240 million Net Zero Hydrogen Fund, which aims to support the commercial deployment of new low carbon hydrogen production plants across the UK. 

  • In Q1 2022 the Government will release a Hydrogen Sector Development Action Plan which will outline how the Government will support companies to secure supply chain opportunities, skills and jobs in hydrogen. This will also include a response to the consultation on a Hydrogen Business Model, alongside indicative Heads of Terms. 

  • The Government aims to collaborate with industry to develop a low carbon standard for hydrogen. 
  • The government is investigating the viability of feeding the natural gas network with up to 20% hydrogen. 

The overall view is that this strategy is a great starting point for accelerating the growth of the hydrogen industry, but the Government must follow through with the promises made in this strategy, particularly where is comes to the subsidisation and funding of hydrogen development projects. Even with the support committed in this strategy, it will still be difficult to achieve the Government’s target of producing 5GW of low carbon hydrogen by 2030. 

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