A new report from Renewable UK is urging the UK government to create new policies to deliver a market capable of supporting future supply chains. RenewableUK is encouraging the UK Government to collaborate with the green hydrogen industry to develop new plans that will enable the nation to accelerate the rate at which it builds significant projects.
In a new report, the representative body believes the proposed policy changes would enable the UK to create a new market allowing new supply chains to develop and support a new green energy industry at scale in the UK. The report called Surveying the UK Green Hydrogen Supply Chain Capability warns that the UK is facing a defining moment, with other nations taking progressive steps toward the global race to generate thousands of new jobs and attract billions in private investment in green hydrogen in the years ahead.
The UK is home to electrolyser businesses like ITM Power and Ceres, whose innovative technology has launched globally. The UK pipeline of electrolyser projects currently stands at 1.5GW, with a considerable amount of new capacity forecast to be added to this pipeline, though only 4MW is fully operational.
The UK Government has determined a target of 10GW of low-carbon hydrogen by 2030, with over 50% of this figure coming from green hydrogen. To achieve this target, the recommendations within the report include developing several large-scale projects quickly to demonstrate a viable market for potential investors and suppliers. Government support schemes like Hydrogen Business Modeal and the Net Zero Hydrogen Fund will play a vital role in this process, so their expansion must be supported and accelerated.
According to the RenewableUK report, ensuring contracts are completed and awarded in time and future funding allocation rounds to 2030 are clear, will be critical for developers. If the UK fails to ramp up efforts, it risks falling behind because of other tax incentives and subsidy offers overseas, such as the recent introduction of the US Inflation Reduction Act, which could attract investment and potential suppliers away from the UK.
The report recommends that UK ministers work with the industry and create a joint working group to determine how tax incentives and other financial groups, like the UK Infrastructure Bank, could make the UK a more competitive market for investment in the green hydrogen supply chain. RenewableUK also believes the UK requires a new government-industry task force to create a roadmap providing details on how the UK can achieve at least 5GW of green hydrogen by 2030. New pipelines are required to transport green hydrogen locally and to other markets in Europe, and underground storage in disused gas sites, so the UK must take decisive action to invest in the necessary infrastructure.
Most green hydrogen will be produced with electricity generated by offshore wind, so a detailed study of how these technologies operate together would support concepts of delivering more flexibility in our electricity systems, strengthening energy security for the UK.
Laurie Heyworth, the senior policy analyst for RenewableUK explains that the UK has the potential to be a global leader in green hydrogen. Heyworth explains that we’re at a defining moment at which we can take strategic action and capture the opportunity to create growth and jobs by delivering local supply chains in the emerging green hydrogen industry and creating opportunities to export the solutions globally. Heyworth believes, however, the development of green hydrogen is delayed by a lack of clear policies and investment compared to blue hydrogen derived from fossil fuels.
Delays in delivering crucial financial support mechanisms have hindered the ability to deliver projects on a scale big enough to act as clear concepts for investors and suppliers to enable us to expand our domestic supply chain. The RenewableUK report intends to determine how these issues can be addressed, with industry and the Government collaborating to enhance the economic and environmental benefits associated with this innovative technology.