KTN’s perspective on the Government’s Hydrogen Strategy 2021

The release of the UK government’s Hydrogen Strategy, which demonstrates that low carbon hydrogen has a significant role to play in achieving Net Zero, has been much anticipated. It makes clear that the UK government is serious about the investment required to tackle the challenge.

KTN agrees that the UK has the ‘vision, resources and know how’ to rapidly develop the hydrogen economy, with the commitment to finalise the design of the UK standard for low carbon hydrogen production, in collaboration with industry, by early 2022. The consultation for the Hydrogen Standard is now open.

A twin track approach

KTN agrees that we need to grow the supply and demand for hydrogen simultaneously, which may require a twin track approach in the short to medium term. ‘Blue’ hydrogen production can be scaled up significantly by 2030 and will help to establish the infrastructure and demand for hydrogen whilst ‘green’ hydrogen production is demonstrated at scale, reducing production costs.

However, as much as blue hydrogen is a stepping stone, we believe that there should be greater focus on green hydrogen to bring forward timescales to scale up green hydrogen production. It is imperative that a measurable definition for low carbon hydrogen is outlined as soon as possible. We welcome the commitment to launch the £240m Net Zero Hydrogen Fund early next year.

KTN agrees that further support for research and innovation is required to enable the hydrogen economy. The recent £60m Low Carbon Hydrogen Supply 2 Competition is welcome but KTN believes there is further scope to invest in R&D and innovation associated with the engineering design, scale-up and production of novel catalysts and materials to enable the UK to meet the 5GW by 2030 hydrogen target and beyond.

Steffan Eldred, KTN Hydrogen Economy Innovation Network Lead, commented “Our network has been looking forward to the release of this strategy for many months, so we are glad it has arrived and can now start to influence the rapidly developing hydrogen economy. Support for low carbon hydrogen features throughout, but we would like to see more haste and finance apportioned to speeding up truly green hydrogen production and uptake; something our network was founded upon.”

The business model

The cost of hydrogen relative to existing high carbon fuels is mentioned early on in the strategy document and there is no doubt that this poses a considerable barrier to adoption of hydrogen. We welcome the launch of the ‘Design of a business model for low carbon hydrogen’ consultation which describes how the government will help to overcome the cost difference associated with producing hydrogen compared with high carbon fuels. This support will be essential to establish the hydrogen sector.

Jenni McDonnell MBE, KTN Thermal Energy lead, said “I was encouraged to see hydrogen for heating homes mentioned in the Strategy. The decarbonisation of heat in the UK will require support for heat pumps, heat networks, and low carbon gas such as hydrogen. The “Prospering from the energy revolution” programme supported the development of local energy systems which integrate multiple energy vectors to meet demand, showing that renewable power and hydrogen can both be part of the solution. How these energy systems develop and what proportion is supplied by hydrogen versus renewable power will be decided by the local needs and resources.”

The distribution network

The Strategy recognises the need to support the development of hydrogen distribution networks and storage, whether they be regional or national, but the government is relying on private investment to fund the initial growth of these networks. This may be reasonable for localised cluster projects but could prove to be a barrier to the adoption of hydrogen for heating in homes. We welcome the review of the existing infrastructure but would like to see more capital investment to de-risk the supply of hydrogen to a range of different consumers, not only the industrial clusters.

Simon Buckley, KTN Zero Emission Mobility Lead, commented “ Along with other documents  such as the Transport Decarbonisation Plan this begins to set the scene for how we decarbonise some of the hard to abate sectors such as maritime, aviation, and potentially HGVs. KTN played a core role in collaboration and partnership building across the zero emission road freight competition where H2, Electric Road Systems and Battery Electric are all being trialled; outcomes from this will help plan the future energy vectors needed for this particular market. Production of hydrogen is energy intensive so we need to make sure we are using it for the right sectors and use cases.”

The export opportunities and funding support

The Strategy outlines the opportunities for international collaboration and the desire to take a leading role globally. In March 2021 KTN worked with the British Consulate-General in Vancouver and the UK Science and Innovation Network in Canada and the US to deliver 2 webinars and a virtual workshop. Aimed at industry, regulatory, policy and academic leaders from the UK, Canada and the US, the event allowed delegates to share their expertise around hydrogen blending standards development and identify gaps where UK-Canada-US collaboration would be helpful. KTN was also a key part of the facilitation in the recent Department for Transport and Innovate UK hydrogen transport hub competition which focused on green hydrogen uptake. KTN supported 85% of the competition winners by connecting partners for positive change, and played a role in finding companies who could offer mobile refuelling. The Innovation Network will continue to support collaboration both in the UK and internationally to help unlock the export opportunities.

There is considerable activity in this area and it’s worth noting that in August, the government announced the following support for hydrogen;

• Consultation on the new £240m Net Zero Hydrogen Fund due to open early 2022: Designing the Net Zero Hydrogen Fund.
• £55m Industrial Fuel Switching 2 competition which includes fuel switching to hydrogen for industrial sites (part of £1bn Net Zero Innovation Portfolio) and is due to open in autumn 2021.
• Red Diesel Replacement (RDR) competition is providing £40m of grant funding to develop and demonstrate low carbon alternatives to red diesel for the construction and mining and quarrying sectors to help these sectors to decarbonise. Phase 1 of the competition is launching in September 2021 with an aim to develop component technologies across three innovation lots. Register your interest in attending the Stakeholder Engagement Events or in applying for the competition here.

About KTN Hydrogen Economy Innovation Network

KTN Hydrogen Economy Innovation Network is funded by the UK government to work with the burgeoning hydrogen sector to find innovative solutions and approaches across regions, clusters and communities to help accelerate hydrogen innovation. The Innovation Network continues to support solutions that enable local clean hydrogen uptake at scale and cost and to find innovative solutions to those challenges described in the Strategy.