The UK has the chance to be a world leader in hydrogen production provided it develops its offshore wind resources and incentivises both green and blue hydrogen production, according to a report by consultancy Xodus entitled “The UK - the Global Hydrogen Centre”.

The report comes ahead of the imminent publication of the UK’s hydrogen strategy, which will reportedly differ from the EU and German strategies in putting more of a focus on blue hydrogen.

“The technology in both green and blue hydrogen is sufficiently developed to enable world-scale projects to be planned, but is also immature enough to enable UK engineering and technology firms to optimise and refine the processes,” says Kent Massey, principal advisor at Xodus.

The most recent UK Climate Change Committee forecast foresees total UK wind production in 2050 to be just 95GW, but the Xodus report says the country has the potential to develop over 150GW of offshore wind resources.

Xodus’ recent report to the Scottish government identified a credible opportunity to develop up to 60GW of Scottish offshore wind feeding dedicated green hydrogen production by 2045, generating 200TWh/year—sufficient to replace roughly half Europe’s current industrial consumption of grey hydrogen.

Xodus predicts that the levelised cost of hydrogen (LCOH) produced by UK offshore wind at the point of production will be around $2.6/kg by the early 2030s and $1/kg for blue hydrogen.

The main risks for low carbon hydrogen project developers are policy and demand uncertainties.

"The technology in both green and blue hydrogen is sufficiently developed to enable world-scale projects to be planned,” Massey, Xodus

A renewable origin certificate (ROC) for hydrogen should be combined with a “progressive” Contract for Difference (CfD) scheme to incentivise production, the report says.

The incentives should be linked to key performance indicators to ensure that manufacturing and technology expertise is being developed domestically, rather than overseas.

The UK should continue with its strategy of promoting blue hydrogen production as part of zero carbon clusters and look to co-locate green hydrogen production next to blue.

“Co-locating blue and green hydrogen production has many synergies,” says the report.

“Technical advantages include using the oxygen by product of green production to improve the efficiency of blue hydrogen production. Commercial synergies include being able to obtain pricing differential advantages between green electricity and gas, better supply and demand curve management, reducing storage and buffering requirements.”

Co-locating production also future proofs hydrogen transport and storage infrastructure by making it usable by whichever turns out to be the cheapest form of production in the long-term.

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Author: Tom Young