Earlier this year, the Government unveiled plans to boost domestic energy generation over the coming decades following Russia’s invasion of Ukraine.
This included ramping up low-carbon hydrogen production to 10GW over the course of the decade.
Low carbon hydrogen refers to green hydrogen, which is produced by splitting water into hydrogen and oxygen through renewable electricity.
This consists of breaking water molecules using an electric current in an electrolyser, in order to extract the dihydrogen H2.
The process is a contrast to blue hydrogen, which is derived from natural gas – and is at the centre of multiple projects to repurpose fossil fuels for future energy needs.
Both green and blue hydrogen are the featured in multiple projects from energy giants such as Shell, Uniper and Octopus Energy.
Meanwhile, challenger groups have generated significant investment, with Protium enjoying a record £40m funding round in London last month for its own green hydrogen projects.
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Alongside the production targets, Downing Street aims to run annual allocation rounds for electrolytic hydrogen, moving to price competitive allocation as soon as market conditions allow.
This would mean up to 1GW of electrolytic hydrogen is in construction or operational within the next three years.
City A.M. spoke with John Mullen, UK Energy Market Director at consultancy group Ramboll about the viability of domestic hydrogen production and how it can help meet our energy needs.
Ramboll are members of the green hydrogen policy working committee for Scottish Renewables, and are supporting a number of clients in the feasibility, business case, design and implementation of hydrogen projects.
Q&A: What’s hydrogen’s role in the energy sector?
- What are the main benefits of green hydrogen – what are its uses and how will it help meet our energy needs?
Hydrogen is valued for its long term energy storage potential which could help smooth out the intermittence of renewable generation and enable better integration of renewable sources within the overall energy system. It is also valued as a flexible solution that can be used as fuel for transport and other “hard to decarbonise” sectors such as high temperature industries.
- Is the 10 GW ramp-up pledged by the government as part of its supply security strategy realistic?
10GW is a realistic but challenging target and needs much more support and guidance from the government on where investment and innovation should be focused to be achieved, and some security on hydrogen costs.
- What are the main challenges in boosting green hydrogen, and what are its limits and headwinds?
There is still not enough demand in the market to provide guarantees in green hydrogen business cases. Hydrogen needs to be competitive, in terms of price and availability, with other energy alternatives. To become competitive, hydrogen needs to increase and mature its supply chain and to receive significant investment to construct or re-engineer an infrastructure for distribution. “
At present, there is simply not enough expertise in industry. Initial investment in hydrogen projects is very high due to the immaturity of supply chain, and hydrogen projects also carry a high risk due to uncertainty in total lifecycle costs and hydrogen’s future value.
- Is blue hydrogen still a viable energy source – have spikes in wholesale prices and the push for supply security changed the dynamic?
Blue hydrogen is a controversial issue – it could be a short term solution but only if there is a clear roadmap to green hydrogen. Carbon capture, usage and storage is expensive, inefficient, chemically intensive and inherent risks remain in long term storage and disposal.
- Why are huge firms still backing blue hydrogen like Uniper and Shell?
Blue hydrogen would enable traditional energy companies to continue to operate with minimum changes to assets and business cases. Blue hydrogen has a short term place in the drive for Net-Zero, however it must not slow down or divert investment and energy away from Green Hydrogen.
- What is the long-term future for green hydrogen?
Green hydrogen is an essential part of the energy mix if we are to achieve net-zero, but needs a larger and more mature supply chain, cheaper capital costs and greater certainty on the hydrogen commodity costs. This should reduce the cost to consumers in the long term. It is important that hydrogen is seen as only part of the solution and not be used in every situation.