Page 9 - EurOil Week 33 2021

EurOil POLICY EurOil
UK unveils hydrogen strategy, but holds back on details
UK
THE UK government unveiled its hydrogen strategy this week following recent delays. The strategy commits the country to developing 5 GW of low-carbon hydrogen capacity by 2030. However, the government said further details on market mechanisms and carbon intensity defini- tions to support hydrogen development would not be released until 2022.
The strategy includes development of both blue hydrogen, which is derived from natural gas and involves a carbon capture component, and green hydrogen, which is produced from renewable sources of energy.
The UK Department for Business, Energy & Industrial Strategy (BEIS) said the country’s approach to offshore wind development, which combined government action with private sec- tor backing, would be used to inform the hydro- gen strategy. The offshore wind strategy relied heavily on the Contracts for Difference (CfD) scheme.
“The government has today launched a pub- lic consultation on a preferred hydrogen busi- ness model which, built on a similar premise to the offshore wind CfDs, is designed to overcome the cost gap between low carbon hydrogen and fossil fuels, helping the costs of low-carbon alter- natives to fall quickly, as hydrogen comes to play an increasing role in our lives,” the BEIS stated.
Other measures included in the strategy include undertaking a review to support the development of the necessary network and storage infrastructure to underpin a hydrogen sector, and working with industry to assess the safety, technical feasibility, and cost effective- ness of mixing 20% hydrogen into the existing gas supply.
The strategy comes as the UK works towards its goal of net zero greenhouse gas (GHG)
emissions by 2050. The government is counting on being able to attract private sector invest- ment into hydrogen, and indeed hopes that such investment will reach GBP4bn ($5.5bn) by 2030. However, it is also allocating some funding to the development of the hydrogen industry and the scaling of new technologies.
The Net Zero Hydrogen Fund, worth GBP240mn ($330mn) is due to be launched in early 2022 and the government said in the announcement of its hydrogen strategy that it was consulting on what the fund should look like. It has also earmarked GBP315mn ($433mn) for an Industrial Energy Transformation Fund to help industry move to low-carbon fuels, includ- ing hydrogen and is providing funding for other initiatives that involve hydrogen.
However, the UK and other countries that are incorporating blue hydrogen into their plans are coming under fire from those who support the outright abandonment of fossil fuels as part of the energy transition. On August 16, the chair of the UK Hydrogen & Fuel Cell Association (UK HFCA), Chris Jackson, stepped down.
“I believe passionately that I would be betray- ing future generations by remaining silent on that fact that blue hydrogen is at best an expen- sive distraction, and at worst a lock-in for con- tinued fossil fuel use that guarantees we will fail to meet our decarbonisation goals,” Jackson stated.
Meanwhile, scientists from Cornell and Stanford universities in the US released a study last week that found that using blue hydrogen in heating would result in around 20% more GHG emissions than the use of natural gas. Such studies will serve to ramp up the pres- sure on governments over their approaches to decarbonisation.™
Further details on market mechanisms and carbon intensity definitions to support hydrogen development would not be released until 2022.
Week 33 19•August•2021 w w w . N E W S B A S E . c o m
P9