LONDON, Aug 17 (Reuters) – The UK government on Tuesday unveiled a strategy to meet its target of 5 gigawatts (GW) of low-carbon hydrogen production by 2030 to replace natural gas in the power supply of around three million households and industry Transport.
Industry and policy makers are increasingly turning to hydrogen to reduce the environmental impact of sectors that are most difficult to decarbonize and reduce gas consumption, but the investment required and technical challenges are high.
Almost all of the hydrogen produced in the UK to date is fossil fuel based.
The government is aiming to replace up to a fifth of natural gas with “green” hydrogen, which is produced by electrolysis using renewable energy to split water into hydrogen and oxygen.
It would also use “blue” hydrogen, which is made from natural gas and steam. In contrast to green hydrogen, blue hydrogen is not emission-free, but the carbon emissions are captured, stored and used in other applications.
The government said around £ 900 million ($ 1.25 billion) in funding is available to support hydrogen projects in the UK that could create more than 9,000 jobs by 2030.
As part of the strategy, it has launched a consultation on forms of funding for hydrogen projects that could reduce costs, as part of its Contracts for Difference (CfD) program, which incentivizes investments in renewable energies by guaranteeing them a minimum price who produce it.
The government will also work with industry on the possibility of blending 20% hydrogen into the existing gas supply.
It is also discussing the creation of a £ 240 million net zero hydrogen fund to support the commercial development of low carbon hydrogen plants.
The European Union also has high hopes that hydrogen will help meet the low carbon goals.
Last year the Commission, the EU executive, developed a strategy to prioritize green hydrogen for use in sectors that are difficult to decarbonize, such as steel.
The British multinational chemical company INEOS, Europe’s largest producer of hydrogen, sees a hydrogen economy as the country’s best chance to achieve its CO2 reduction targets.
“But the government must begin to commit to investing in the development of the UK’s hydrogen infrastructure,” INEOS director of corporate affairs Tom Crotty said in a statement Tuesday. “At the moment, Europe is lagging massively behind and words are not enough.”
The UK produces around 27 terawatt hours (Twh) of hydrogen annually, mostly from fossil fuels.
Achieving the government’s net zero emissions target by 2050 would require 270 TWh of hydrogen, mostly blue, on the Climate Change Committee, according to the UK government’s climate change advisor. 1 GW corresponds to 8.76 TWh of energy over a year.
Some environmental groups say including blue hydrogen in the UK strategy could lock the country in to fossil fuels.
They have a similar criticism of carbon capture and storage technology, which does not yet need to be rolled out on a commercial scale and which is needed to curb blue hydrogen emissions.
Research by the US Universities of Cornell and Stanford last week found that blue hydrogen could be 20% more environmentally friendly than household and industrial use of gas due to the carbon dioxide and methane emissions it emits during production.
($ 1 = 0.7213 pounds)
Reporting by Nina Chestney; Adaptation by Barbara Lewis
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