The UK government has this week launched a consultation on a potential subsidy, or ‘business model’, for hydrogen storage and transportation.

The government’s focus up to now has been on the development of production capacity, with a subsidy scheme for electrolytic projects launched in July. But large-scale infrastructure for hydrogen transport and storage will also be vital for scaling up the sector.

“What we need to get to is more of a hydrogen ecosystem, where different producers can plug and play into the same kind of infrastructure, utilise centralised storage assets and utilise a central network,” says Clare Jackson, CEO of trade association Hydrogen UK, adding that this will allow hydrogen to evolve from the current requirement for production and use to be co-located.

“What we need to get to is more of a hydrogen ecosystem” Jackson, Hydrogen UK

Options for hydrogen transport include trucks, trains, ships and new or repurposed pipelines.

Early hydrogen projects are expected to use closed-system pipelines and vehicular transport. UK-based developer Octopus Hydrogen, which aims to start up its first commercial green hydrogen facility next quarter, has told Hydrogen Economist it will store and transport hydrogen to its offtaker Geopura as compressed gas. And a recent study by BP and industrial gases firm BOC finds that hydrogen for refuelling stations will most likely be transported as compressed gas distributed in trailers, with a liquid hydrogen distribution network likely to take off in the long term.

The government expects the development of shared pipelines “from an early stage” connecting producers to multiple consumers, it says in the consultation document.

And while the business model for hydrogen transport may change as infrastructure scales, the government is leaning toward the regulated asset base model which is “typically used in the UK and further afield for monopoly infrastructure such as gas, electricity, and water networks, and is a proven tool to address challenges associated with natural monopolies, as well as to de-risk investment in mature markets”.

Beyond the business model, the government aims to make a final decision on whether to allow blending of up to 20pc hydrogen in existing natural gas networks in 2023.

Storage options

Storage is also expected to play a major role in scaling up the sector. “There are certain types of end use of hydrogen which require reasonably large amounts of storage,” Jackson says, highlighting power—a sector with fluctuating demand—as a use case that will require large-scale storage infrastructure.

This could include depleted aquifers, salt and rock caverns, and oil and gas fields, as well as containers for compressed or liquid hydrogen and chemical carriers. Based on the wide variety of storage methods, the government is much more cautious on assigning a preferred business model.

“Retaining some optionality through technology agnosticism would be very beneficial,” says Jackson.

Centrica, the UK’s largest gas supplier, is in discussions with the government over plans to potentially convert its Rough offshore gas storage site into one of the world’s largest hydrogen storage facilities.

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Author: Polly Martin