UK joins race to be hydrogen world leader

23rd November 2020 | Commercial Energy

Despite its potential role in energy transition and economic recovery, hydrogen is several years from achieving its potential, S&P Global Rating’s Infrastructure and Utilities conference learned. The virtual conference heard that despite country-level commitments to ramp up production – market uncertainty, high production costs and the need for new infrastructure are holding back progress. Experts predict hydrogen is unlikely to play a significant role in the low-carbon energy mix until production of energy has been significantly increased, in a “second phase” of low carbon policy.

S&P identified three types of hydrogen. “Grey” hydrogen is made from hydrocarbons and produces CO2 emissions. Future clean sources will be “blue” hydrogen, extracted from natural gas, accompanied by carbon capture and “green” hydrogen, obtained from water through electrolysis, using electricity from renewable sources. All methods of production are currently expensive.


Mass-produced hydrogen could be used to reformulate gas grids, to reduce greenhouse gas emissions from heating and cooking, in industrial applications such as steel making and to power vehicles, using fuel cells – particularly for heavy fleet vehicles and trains.

The EU has put hydrogen at the heart of its green recovery, as our October insight briefing identified. It announced in July a target of 40GW of electrolyser capacity to be installed by 2030. France has earmarked €7bn this decade to support development and Germany €9bn. The Netherlands, Spain and Portugal are also making significant investments. Outside Europe, Japan and Australia see the fuel as important to their future energy mix.

In the UK, prime minister Boris Johnson this month promised £500m – half for trialling homes using hydrogen for heating and cooking and the remainder for new hydrogen production facilities. This is somewhat shy of France’s €7bn and Germany’s €9bn. Business Secretary, Alok Sharma, told parliament in September that his department will be publishing a strategy next year, setting out a pathway for the UK to be a “world leader” in clean fuel. Hydrogen will be included in the forthcoming energy white paper, which has been delayed by Covid-19.

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