The lack of a clear strategy and high regulatory barriers are preventing the UK from taking the lead on hydrogen and handing the first mover advantage to other countries in Europe, a new report has argued.
Aurora Energy Research said that Germany is emerging the most attractive market for early investors due its “ambitious hydrogen strategy, with planned incentives for hydrogen production and usage in industry”.
Along with France, Spain and Portugal, Germany is expected to take the lead in the production of green hydrogen using electrolysers powered by renewables.
Aurora said the UK, the Netherlands and Norway, with their “long history of natural gas production” and “significant potential for carbon capture and storage (CCS)”, are likely to provide strong markets for green and blue hydrogen. The latter is extracted from methane, with the resulting emissions – or at least most of them – being captured and stored.
Germany, France, the Netherlands, Spain and Portugal all now have nationally defined strategies. “They have the ambition and they’ve communicated it to the industry. There’s a much clearer sense of the direction of travel,” said Aurora research director Richard Howard.
“That’s not the case in the UK. There have been various supportive statements here and there but there’s no coherent plan for hydrogen as it stands.”
Howard told Utility Week the UK does still have some advantages over Germany: “One thing that is better in the UK than many other countries is I think we have a more technology agnostic view of the world in general, and I think within the hydrogen debate that will mean that there’s support for both green and blue hydrogen.
“There’s typically been quite a bit of support for CCS use in the UK and you don’t see that in the rest of Europe. For example, in Germany CCS is banned in quite a lot of regions.”
“There’s a lot of discussion about the use of hydrogen in heating,” he added. “That’s not true in other European countries where the solution people talk about is district heating or electrified heating. In the UK, there’s a strong sense that hydrogen could be part of the solution.”
As a result, Aurora’s high scenario for the UK is “way more ambitious” than equivalent scenarios in other countries.
Howard said regulatory barriers are also holding the UK back: “At the moment, the rules around hydrogen injection into the gas grid are more restrictive than elsewhere. We have a limit of 0.1 per cent in our gas grid. Some other countries already allow 5 per cent or in some case even up to 10 per cent.
“Having said that the UK is already look at increasing that more towards 20 per cent and there are a number of feasibility studies going on to test that.”
He continued: “In certain countries because they have a clearer hydrogen strategy, they also have a more streamlined or clearer process for the planning and permitting of hydrogen installations. It’s almost broken out as a separate category in legislation and it’s clearer what you have to do to comply.
“In the UK, that’s just not the case and so if someone wanted to develop a hydrogen project, it would be less obvious what they would have to do so it would be more of a first of a kind test case for the authorities”.
Howard said this issues should be “relatively easy” to resolve: “They’ve done this before. For shale, for example, they’ve created a really clear permitting process.
“Whether you’re in favour of shale gas or not, what they did was to simplify the process and so it can be done. You can simplify these processes and make it clearer if you chose do that”.