Thursday, April 18, 2024
Insights

Report urges UK government and industry to build strong economy and kickstart hydrogen sector 

The UK’s first Hydrogen Champion Jane Toogood has published her independent report into the industry and in it urges the government to kickstart investment in the sector by overcoming barriers to deliver the first CCUS-enabled and electrolytic hydrogen production projects at scale, boosting investor confidence, building project momentum and driving UK content.

Toogood, the Chief Executive of Catalyst Technologies at Johnson Matthey and Co-Chair of the Hydrogen Advisory Council, was appointed in July 2022 as the UK’s Hydrogen Champion by the then Secretary of State for Business, Energy and Industrial Strategy (BEIS).

The report also makes other recommendations to government and the industry about the measures needed to build a strong hydrogen economy.

It urges Whitehall to provide a clear vision for investors on how and when hydrogen will scale-up beyond the first round of projects in the initial CCUS industrial clusters. CCUS-enabled hydrogen production needs significant enabling infrastructure, so uncertainty affects these projects more than electrolytic enabled production.

The government should also drive rapid development of the hydrogen economy by stimulating demand in blending, heating and transport, says the report, and also create a plan for integrated energy infrastructure to deliver an optimal future energy system incorporating gas, electricity and hydrogen (and CO2), enabling balancing of intermittent renewable power generation. Capturing the significant wider system efficiency benefits has the potential to deliver up to £38bn cost savings, cites the report. Industry and government should work more closely together to develop this plan.

Finally, London should provide an integrated plan for the implementation of the Hydrogen Strategy to 2030, building on the existing roadmap. Collaboration and shared accountability between industry and government needs to be be fostered by a visible, joined-up plan for hydrogen across government departments, coordinated by DESNZ

The Hydrogen Champion Report also sets out recommendations for industry.

It should work closely with government in dedicated work groups to help resolve problems and gaps in resource. For example, dedicating expert resource and working in partnership with the HSE and DESNZ to speed up the safety assessments needed on blending and heating.

Industry could improve the effectiveness of formal consultations by working in closer partnership with government, for example, on blending, where industry has data and experience from other markets.

Industry and trade associations should work together to evaluate the scale of the economic opportunity of hydrogen to ensure it not underestimated. The government would benefit from additional data to provide the full picture of how many jobs the hydrogen economy could create.

The reprt also says the hydrogen sector should work closely with government to identify UK strengths, make voluntary commitments to deliver content and formulate a wider supply chain strategy that builds on UK strengths, as has been done for aviation.

Finally, an industry supported delivery workstream on skills is required both to join up industry, government and academia and to ensure that near and long-term skill needs are met within the supply chain strategy.

Publishing the report, Toogood said: “I have spent the last nine months talking to businesses across the country about the barriers to building a strong UK hydrogen economy. I’ve heard about the challenges and also some of the creative solutions for overcoming them.

“Today my independent report for the Government has been published – within the UK, we have made a strong, early start to capitalise on our natural advantages. We also need a well joined-up approach across UK government.

“In order to get spades in the ground for the leading hydrogen projects before the end of next year, companies investing in hydrogen and its supply chain need clarity, certainty and confidence to invest capital. Strong signals from the UK Government, demonstrating a long-term commitment to hydrogen, will unlock significant investment to underpin the UK’s hydrogen economy.”