UK to pursue hydrogen leadership with offshore wind approach

The UK government on Tuesday set out plans to create a booming low-carbon hydrogen sector and is launching consultation on closing the cost gap between low-carbon hydrogen and fossil fuels.

The government wants to mimic the success with offshore wind, where early government action and Contracts for Difference (CfD) support have helped secure the country a leading position. It said it is publishing a consultation on a preferred hydrogen business model, shaped on a similar premise to the offshore wind CfDs.

A consultation is also being initiated on the design of the GBP-240-million (USD 333m/EUR 283m) Net Zero Hydrogen Fund, intended to back new plants for low-carbon hydrogen production in the UK.

The UK’s Hydrogen Strategy, unveiled today, also includes measures such as partnering with industry to develop a UK standard for low-carbon hydrogen and outlining an approach to supporting multiple technologies including "green" electrolytic and "blue" carbon capture-enabled hydrogen production.

Hydrogen could be key to decarbonising energy-intensive industries and heavy transport and to achieving the UK’s emissions targets.

The UK has set an ambition to reach 5 GW of low carbon hydrogen production capacity by 2030. The government says that by that year a thriving hydrogen economy could be worth GBP 900 million and create more than 9,000 jobs. According to government analysis, 20-35% of the country’s energy consumption by 2050 could be hydrogen-based.

“With the potential to provide a third of the UK’s energy in the future, our strategy positions the UK as first in the global race to ramp up hydrogen technology and seize the thousands of jobs and private investment that come with it,” said Business and Energy Secretary Kwasi Kwarteng.

The UK government also announced GBP 105 million in funding through its Net Zero Innovation Portfolio to help polluting industries develop low-carbon alternative fuels, including hydrogen.

(GBP 1 = USD 1.387/EUR 1.178)

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