New report urges government to set cost reduction target for renewably generated hydrogen

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Government should help energy consumers by supporting the rapid development of green hydrogen, generated using renewable electricity, as a cheap energy source for the future, a new report by RenewableUK urges.

The study, Renewable Hydrogen – Seizing the UK Opportunity, says the renewables sector is confident that it can repeat the success of the UK’s world-leading offshore wind industry by driving down the cost of green hydrogen over the course of this decade.

This technology can also play a key role in the UK’s long-term green economic recovery, creating significant new economic opportunities for the UK, particularly in coastal communities and industrial cities which need levelling-up most.

Barnaby Wharton, RenewableUK’s Director of Future Electricity Systems, commented on the report: “Renewable hydrogen is the next big global industry in the decades ahead.

“The UK is well placed to lead this new industry, with plentiful renewable resources and world-leading hydrogen companies.

“We can drive down costs fast, replicating our spectacular success in offshore wind cost reduction, offering consumers cheaper energy.

“We can’t let this opportunity slip through our fingers if the UK wants to stay at the cutting edge of innovation in renewable energy, with all the economic benefits that will bring.

“We’re urging Government to come on board with us by setting out a strategy to secure a multi-billion-pound prize which will create tens of thousands of jobs around the country, especially in areas which need levelling up, as a key part of the UK’s green economic recovery.”

Barnaby Wharton, RenewableUK’s Director of Future Electricity Systems

To ensure building UK’s R&D and manufacturing strength in green hydrogen, RenewableUK is calling for the Government to publish a hydrogen strategy, including a roadmap to 2050, setting out how renewable hydrogen will grow from a niche technology to the central pillar of the UK’s energy system.

This should include a plan to deliver the first gigawatt of electrolyser capacity in the UK, identifying potential projects and funding to drive innovation and investment.

RenewableUK also recommends setting a target of 5GW of renewable electrolyser capacity by 2030 and 10GW by 2035, along with a cost reduction target of £2 per kilogram of green hydrogen by 2030, down from £8/kg today.

This would mean that by 2030, green hydrogen would be cost-competitive, or could even cost less to produce than blue hydrogen which is made from fossil fuel (methane) with carbon capture and storage (CCS).

Clean hydrogen would also help us to reach net zero faster, as current CCS technology fails to capture up to a fifth of all carbon emissions.

The report highlights the fact that the UK already has a head start in the global race to commercialise green hydrogen, with major trials underway such as the Gigastack project in the Humber.

This is set to use renewable energy from offshore wind farms to make clean hydrogen by a process known as electrolysis – splitting water into hydrogen and oxygen.

World-leading manufacturers of electrolysers such as ITM Power and Siemens are already based in the UK.

To track this progress, RenewableUK’s Project Intelligence database is now monitoring green hydrogen projects around the UK at all stages of their development, including those already operating, for example powering ferries in Orkney and buses in Aberdeen.

Our database shows a pipeline of 27 renewable hydrogen projects which are operational, under construction, consented or in planning, with a capacity of 33MW.

The global market for renewable hydrogen is expected to be worth $2.5 trillion by 2050, so the UK has a major export opportunity in the decades ahead.

A joint report by the Offshore Renewable Energy Catapult and the Offshore Wind Industry Council published this month shows that up to 120,000 jobs could be created across offshore wind generation, the manufacturing of electrolysers and logistics.

Renewable hydrogen can be used as a zero-carbon gas to heat homes and factories, as well as powering freight transport on land and sea.

Renewable hydrogen also offers flexibility to the UK’s energy system as it can be made using electricity from wind farms and other clean energy sources when there is plentiful generation and then stored for when it is needed.

An industry webinar briefing on renewable hydrogen by The Offshore Wind Industry Council (OWIC), Offshore Renewable Energy(ORE) Catapult and RenewableUK will take place on Friday 2nd October (11.00am-12.15pm).

More information about the free event is available here