UK falls behind on hydrogen progress, Scotland eyes offshore wind potential

Hydrogen UK and the UK's Energy Networks Association found the UK slipping down from second place to eighth in their index of how ready major economies are to deploy clean hydrogen, even as Scotland looks to tap the potential of offshore wind to boost its hydrogen prospects.

The industry bodies said progress had slowed in the UK since 2021, when it was second only to South Korea, with the country losing ground to the US, Canada, Germany, the Netherlands, France and Japan as competition to attract international investment dramatically increased.

"Missed opportunities to pass necessary legislation and political uncertainty around the policies and funding arrangements to support the UK's hydrogen rollout means that no major projects have progressed to the final investment decision stage," the groups said in a report published Sept. 5.

ENA's gas members and Hydrogen UK set out four recommendations for the UK to regain momentum, including:

1. Moving faster and being more flexible with production support
2. Identifying and supporting strategic infrastructure immediately
3. Introducing clarity on minimum roles for hydrogen in industry, power, transport and heat, with support measures
4. Stimulating domestic supply chains to maximize the economic opportunity

The UK government has just appointed a new energy secretary, and the Energy Bill, which includes measures for hydrogen adoption, is still going through Parliament.

"Policy delays and lack of clarity from government have slowed the progression of low-carbon hydrogen projects," Hydrogen UK CEO Clare Jackson said in a statement. "We are still waiting for the Energy Bill to be passed, which was introduced to Parliament over a year ago."

The ENA's Head of Hydrogen, Silvia Simon, said the industry was ready to work with government to speed up progress.

"The UK was streets ahead of the global competition in 2021 in the race to use hydrogen to help build a decarbonized energy system, but UK industry has been forced to watch other countries catch up and risk leaving us behind," Simon said in the statement.

The ENA is the industry body funded by UK gas and electricity transmission and distribution license holders.

Platts, part of S&P Global Commodity Insights, assessed the cost of producing hydrogen via alkaline electrolysis in the UK (including capex) at GBP5.19/kg ($6.52/kg) Sept. 5, based on month-ahead grid power prices, comparable to prices in the Netherlands at Eur6.05/kg ($6.49/kg).

Scottish wind potential

Meanwhile, in a separate report commissioned by Crown Estate Scotland published Sept. 5, consultancy group Xodus said new and existing offshore wind farms could generate large amounts of green hydrogen to support the UK and EU meet their net-zero targets.

Vital to this was building the required infrastructure, Crown Estate Scotland said in a statement.

The report follows a study from the Net Zero Technology Centre's (NZTC) on a proposed Hydrogen Backbone Link pipeline from Scotland to mainland Europe to tap the country's green hydrogen potential for export.

The "Commercial Models for Future Hydrogen Production" report uses a range of scenarios for Scotland's potential future hydrogen generation, focusing on the ScotWind and Innovation and Targeted Oil & Gas (INTOG) offshore wind projects, "which might dedicate some of their output to hydrogen electrolysis," Crown Estate Scotland said.

The ScotWind leasing round awarded over 24 GW of potential offshore fixed and floating wind concessions in 2022, with first projects online in 2030. Crown Estate Scotland also awarded 13 initial agreements in March for floating offshore wind projects totaling 5.5 GW under INTOG, designed to decarbonize energy supply to North Sea oil and gas platforms or demonstrate technical innovation.