Government announces its first hydrogen strategy

The Government has set out its ambition for 5GW of hydrogen production capacity by 2030 – the equivalent of replacing natural gas in powering around three million UK homes each year.

The Government said it hoped that by 2030, hydrogen could play a role in decarbonising energy-intensive industries like chemicals, oil refineries, power, and heavy transport such as shipping, HGVs and trains.

Government analysis suggests that 20-35% of the UK's energy consumption by 2050 could by hydrogen based.

It is basing its approach on the UK's previous success with offshore wind, where government action was coupled with private sector backing. One of the main tools used to establish offshore wind was the Contracts for Difference (CfD) scheme, which incentivises investment in renewable energy by providing developers with protection from volatile wholesale prices and protects consumers from paying more when electricity prices are high.

The Government has launched a public consultation on a preferred hydrogen business model, built on a similar premise to the offshore wind CfDs. It is also consulting on the design of the £240m Net Zero Hydrogen Fund, which aims to support the commercial deployment of new low-carbon hydrogen production plants across the UK.

The Government is also working with the Health and Safety Executive (HSE) and energy regulator Ofgem to support industry to conduct hydrogen heating trials. These trials, along with the results of a wider research and development testing programme, will inform a UK Government decision in 2026 on the role of hydrogen in decarbonising heat. In the event of a positive case, hydrogen could be used to heat homes and businesses by 2035.

This article originally appeared on Construction Manager