London — The UK must focus on building its own industrial capability in clean hydrogen production in order to maximize export market potential, the Minister for Exports at the Department for International Trade, Graham Stuart, told a sector meeting organized by the All Party Parliamentary Group on Hydrogen Jan. 26.
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A dedicated team has been set up within the DIT tasked with promoting trade and investment in the industry, while the UK's network of trading advisors were identifying hydrogen export opportunities overseas, Stuart said.
Meanwhile the UK's export credit agency, UK Export Finance, "is working to ensure no viable British export opportunity fails through lack of finance," with an extra GBP2 billion ($2.74 billion) of direct lending capacity "solely dedicated in March 2020 to clean growth projects, providing the backing hydrogen firms need to trade internationally," he said.
None of this would amount to much, however, if the UK did not learn the lessons from its offshore wind sector.
The scale and speed of deployment in offshore wind has been exemplary, "but at the end of it all, the capex element coming from the UK has been lamentably low," Stuart said.
Parliamentarians should ensure that a hydrogen strategy, due in Q1 or Q2 this year, avoids the UK becoming "a wonderful R&D hub with multibillion-dollar industries created elsewhere," he said.
"If we don't get the framework right, and unlock private investment, we won't deliver the remarkable performance wind has had in, for instance, Denmark," he said.
Denmark's wind export revenue is greater than the UK's defense export revenue, Scottish MP Angus Brendan MacNeil noted.
Industry voices added valuable detail to the discussion, with Northern Gas Networks' Melanie Taylor briefing the meeting on hydrogen blending trials in gas grids.
"As we speak our engineers are on site at South Bank, Redcar, preparing for the first live trials of hydrogen in our network," she said.
The H21 trials would pave the way for 100% conversion to hydrogen in customers' homes, and ultimately the creation of hydrogen villages and towns as set out in the government's 10-point climate plan released late last year.
NGN is also working with neighboring gas network Cadent to blend up to 20% hydrogen into the gas network serving 700 homes in Gateshead, following a successful trial at Keele University.
"We are putting in place a number of NDAs [non-disclosure agreements] with businesses with an interest in injecting hydrogen into the UK's networks," Taylor said.
NGN wants to see more UK companies in that mix. "We're in a race, so we must be the first country to blend hydrogen at scale," she said.
That means completing the research, and the regulatory clearances, by end-2023.
Second, the UK must be the first country to convert its networks to 100% hydrogen.
There are achievable steps on the way, such as choosing to locate 100% hydrogen villages "in areas with existing innovation clusters, so the pilots become sandboxes for businesses developing new hydrogen products -- not just production, but also appliances and transport," Taylor said.
Focus on USPs
Equinor's Dan Sadler stressed the advantages of the UK's "unique selling points," not least its agnostic position on hydrogen production pathways, and its potential to develop low-carbon ammonia and green steel.
"The hydrogen supply chain is vast. We need to identify the point that gives you first-mover advantage," Sadler said.
Low-carbon ammonia -- an existing market with over 2 million tons traded each year -- was one such point, he said.
"We can produce low-carbon ammonia in the UK. Its production is geographically bound to areas with the right infrastructure [like the H2H Saltend blue hydrogen project], and we can either trade into the existing global market, or use it as a vector to transfer hydrogen to countries, like Japan, that don't have the infrastructure, or use it to decarbonize the maritime sector," he said.
Green steel and low-carbon chemicals are other potential hydrogen USPs for the UK. These products could only be produced in areas with low-carbon infrastructure, such as hydrogen or carbon capture and storage.
"The market advantage for the UK is its practical, agnostic position [on blue and green hydrogen], which is required to develop an at-scale market quickly, allowing for a range of technologies from electrolyzers to autothermal and steam methane reformers, and CCS," Sadler said.