Environment & ClimateFossil FuelsHeavy Duty & Off-highwayHydrogenMarine & heavy duty

Could the UK become a world leader in green hydrogen production by 2030?

By November 1, 2023 No Comments

The Green Hydrogen Alliance (GHA) is an independent business group representing some of the leading companies involved in the supply and use of green hydrogen technologies in the UK.

The current GHA organisations are Airbus, Air Products, London City Airport, TATA, ABP and World Kinect.

The GHA objective is to offer a collective industry voice which promotes the potential of green hydrogen. The potential of green hydrogen has been recognised by the GHA and associated organisations as a way to ensure economic, decarbonisation and energy security across the UK.

A recent report by the GHA has identified how the development of three green hydrogen production facilities could generate 900MW of green hydrogen per year.

These developments would not only support the UK hydrogen strategy, but they could also support key levelling up areas across the UK.

GHA forecasting has identified that nearly £11 billion (spread over 30 years) could be gained from these three developments. Much of this social-economic benefit, at least £10 billion, could be from reduced carbon dioxide emissions of over 1.7 million tonnes per year. This reduction in CO2 emissions could make a significant contribution towards the UK achieving Net Zero.

Currently only about 4% of the 70 million tonnes of hydrogen produced globally each year are green. This is mostly due to high production costs in the development of electrolysers, and the challenges posed by production and transportation.

Hydrogen has been recognised as a key player in decarbonising some of the most energy-intensive sectors and some of the difficult to decarbonise sectors such as heavy-duty, off-highway and marine.

Despite the current costs involved in the production of green hydrogen being a challenge for the uptake in production, the continued development of the electrolyser market is starting to bring down costs.

The production of larger scale green hydrogen capacity supports the UK Government’s wider policy priorities in five main ways:

Net Zero: The development of low carbon fuel alternatives for transport and industry is an indispensable component of the Government’s 2050 Net Zero aspirations.

Energy Security: It would enable the rapid development of a baseline supply of renewable hydrogen, which would greatly diversify the UK’s energy sources and thereby strengthen energy security and systems resilience.

Hydrogen Strategy: It supports catalysing the UK Hydrogen market, which has yet to be established, to reach the 10GW target by 2030. This will probably require pump-priming both hydrogen supply and demand, necessary to give the UK overall a ‘first mover’ advantage in the emerging global hydrogen market.

Global Britain: It develops the UK’s port facilities and infrastructure in a way that ultimately positions it not as an importer of green ammonia, but ultimately as an exporter of green hydrogen, with ammonia imports merely part of a transition.

Levelling Up: It contributes to UK congregations of hydrogen production i.e. agglomeration to bolster productivity through the supply side, including at Freeports (1)

Part of the GHA report identifies the direct correlation between the investment in the green hydrogen hubs and how this can directly support the UK Governments Levelling Up programme and directly support the heavy-duty, off-highway and marine sectors.

Many of the UK’s leading hydrogen industrial-research clusters, including Teesside and South Wales, are located in Category 1 Levelling Up areas – designated by the Government as areas most in need of investment. (1)

Many of these areas fall in the UK’s former industrial heartlands, which have seen a considerable decline in manufacturing and subsequent unemployment levels have risen. This is in the most part due to the fact that so many of the UK’s traditional industries have relocated overseas.

The development of hydrogen clusters therefore offers a route to revitalising these areas of the UK, drawing on the strengths of their industrial heritage to provide skilled workers and proximal offtakers for green hydrogen fuels. (1)

The GHA have modelled the development of production capacity for 900MW of green hydrogen based on three 300MW production facilities across the UK. (1)

  1. Humber Estuary – where there are current plans to locate a green hydrogen facility;
  2. Thames Estuary – an ideal location to serve domestic aviation, as well as other decarbonisation applications, with major local population benefits such as cutting air pollution;
  3. South Wales – where heavy industries and downstream users such as construction can be decarbonised. (1)

The green hydrogen being earmarked for production in these three areas will primarily be used in the heavy-duty sectors, heavy-industry sectors and potentially in the light aircraft sectors.

Facilitating a green hydrogen transition in the Humber, the Thames Estuary and in South Wales would not only boost local economies and improve local infrastructure, but it would also offer wide reaching job opportunities whilst supporting the continued hydrogen economy growth across the UK.

However, despite the GHA report identifying key green hydrogen production opportunities across the UK, at the current pace of development the UK Government’s target to reach 10GW of low-carbon hydrogen production by 2030, of which 5GW is comprised of green hydrogen, seems currently out of reach.

To achieve the targets as set out in the Ten Point Plan and subsequent Hydrogen Strategy, the UK Government will need to ramp up its ambition to reach its targets.

In August 2023, the ‘Powering Up Britain’ plan shortlisted 17 green hydrogen projects that would potentially be eligible for funding under the first hydrogen funding allocation round (HAR1), and could therefore become operational by 2025 – the first tranche of projects to contribute to that 5GW production target. (1)

The primary funding mechanism for supporting UK hydrogen production, the Hydrogen Production Business Model, actively excludes any kind of imported renewable energy or feedstock for hydrogen production, maintaining that every element of the production process must be carried out in the UK.  (1)

Written by Katy Mason for and on behalf of Dolphin N2.

  1. https://87eecd37-3820-494b-94ad-3d87df468362.usrfiles.com/ugd/87eecd_0e3fbd8717654077a2b533f54ad1f148.pdf