The wider recognition of the role for hydrogen in decarbonising the UK energy system continues with the publication of a report by Policy Exchange which identifies the potential for Scotland and North East England to lead on developing hydrogen in the near term.
This new Fuelling the Future report identifies that Scotland and North East England offer the best opportunities for successful hydrogen production hubs, while investment in cost-effective hydrogen production technologies – such as electrolysis – would open up export opportunities and address both the Industrial and Clean Growth strategies.
Policy Exchange’s ‘Fuelling the Future’report also recommends that:
· The hydrogen economy offers big opportunities to decarbonise, but without coordinated leadership from industry and central government (targeted at lowering the cost of sustainable production) we will not benefit as we should.
· As part of the Industrial Strategy Challenge Fund, investment should be focused on R&D to lower the cost of hydrogen production via methods like electrolysis, which has the potential to provide flexible services to help balance intermittent renewable energy.
· In the short term, long distance freight offers the best opportunities for implementing hydrogen use at scale, and national and local government should work with the private sector to invest in the necessary refuelling network as well as innovation grants for pilot programmes.
· Hydrogen production using electrolysers and ‘spare’ curtailed wind can replace less than 1% of the gas used in domestic heating, while production using fossil fuels is incompatible with domestic decarbonisation targets without carbon capture and storage (CCS). Scotland and the North East of England are the best places in the country for decarbonised hydrogen production hubs using renewable energy and/or CCS so the Government should consider targeting investment there.