The UK hydrogen strategy will be published in the "next few weeks"—potentially during parliament’s summer recess—and will have more of a focus on blue hydrogen than other national strategies, according to minister for business, enterprise and industrial strategy (Beis), Kwasi Kwarteng.

The government would normally publish such a strategy while parliament was sitting in order to allow MPs and Lords in the upper house a chance to scrutinise it. But given the urgency of the strategy, Beis wants to publish it during a parliamentary recess.

“A whole community out there is waiting for the hydrogen strategy, and we will try to get it out as soon as possible,” said Kwarteng.

“We are investing in the production of blue hydrogen as well as green hydrogen,” Kwarteng, UK industrial strategy minister

Speaking at a house of commons science and technology committee meeting, Kwarteng refused to be drawn on how much of the 1GW of hydrogen production targeted in the government’s ten-point plan would be blue, but suggested it could come mostly from the zero-carbon clusters identified by the UK’s £1bn ($1.38bn) carbon capture, utilisation and storage (CCUS) funding programme—which are initially planning to produce blue hydrogen.

“Clearly, if we have two clusters up and running by 2025, there will be the ability to capture enough carbon dioxide to produce blue hydrogen in the quantity you have mentioned,” he said, referencing the 1GW target. 

Kwarteng noted the advantages of blue hydrogen in the short term in that it is easier and cheaper to produce. "At my insistence and that of others, we have a twin-track approach: we are investing in the production of blue hydrogen as well as green hydrogen,” he said.

Modelling presented to Beis shows that over the next few years blue hydrogen costs will be lower. “Once you have created a market for hydrogen, the cost curve of the production of green hydrogen will come down,” added Kwarteng.

Private sector cash

As well as the CCUS programme funding, the government has also put £240mn into a net-zero hydrogen fund. Asked whether the hydrogen strategy would provide additional funding for the sector in line with the €9bn German hydrogen strategy or the $20bn Japanese hydrogen strategy, Kwarteng said the UK strategy would differ in that it would try to incentivise private sector investment rather than commit large amounts of state money.

“We know from our experience in offshore wind that we get real success by creating a structure—an investible proposition—where the private sector supplies most of the capital and deploys most of the investment. That, I think, is the best way to proceed,” he said.

The department is likely to agree a pricing mechanism for the storage of CO₂ as part of its deployment of CCUS and blue hydrogen, but a support mechanism for green hydrogen production has not yet been agreed.

“We do not know whether it is going to be a regulated asset base model or a contract for difference model in the context of green hydrogen,” said Kwarteng.

The UK will initially target heavy goods road transport, trains, industry and domestic heating as the best sources of demand.

Trials at Keele Unversity and Levenmouth in Scotland are experimenting with blending hydrogen into the gas distribution network, a key stepping stone to the use of the fuel in domestic heating. "If those trials go well…we could enter a world where, within eight or nine years, we could have hydrogen in the gas distribution system,” said Kwarteng.

£240mn – Value of net-zero hydrogen fund

The strategy of focusing on blue hydrogen in the near-term to help build demand and infrastructure will save money, according to Guy Newey, strategy and performance director at Energy Systems Catapult.

“The active debate in the blue and green hydrogen is at which point green will overtake blue in cost reduction,” he said. “There is some great analysis that puts that point at, some say, 2030, some say mid-2040s. We would see it later than 2030. There is so much uncertainty.”

An ideal scenario for the government to enact in its hydrogen strategy would be to incentivise the two different technologies to the point at which they can compete on price and then stop all subsidies for both.

“The evidence suggests that it is worth supporting both of those horses depending on what you can afford, but, ultimately, you want a market framework to decide,” he said.

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Author: Tom Young