Over a quarter of projects recently awarded grants through the UK’s Net Zero Hydrogen Fund will be located in Scotland, looking to leverage strong renewable resources and an abundance of offshore wind electricity due to come online this decade.

In addition to the UK’s target for 10GW of low-carbon hydrogen by 2030, the Scottish government has set its own target of 5GW of hydrogen production capacity within the country by that year.

Edinburgh-headquartered H2 Green has secured £500,000 from the Net Zero Hydrogen Fund to support Feed and post-Feed studies for its green hydrogen hub in Inverness. The company plans to initially develop a 6MW electrolyser, as well as wind and solar assets. First production is expected in 2025, with the project ramping up to 24MW in subsequent phases.

“We do need a standardised, easily accessible market mechanism for hydrogen in transport” Cooley, H2 Green

The Inverness hub will primarily service HGVs, producing enough hydrogen to fuel 80 trucks in its first phase and 400 in its second.

“Hydrogen is perfect for heavy-duty vehicles that cover a long distance with respect to payload,” says Graham Cooley, chairman of H2 Green and former CEO of electrolyser manufacturer ITM Power. He notes that for a battery to get the same range, it would drastically add to the weight of the vehicle.

“The network of projects that we are building is not just for transport,” he tells Hydrogen Economist.  “We are focusing on three areas: first, industrial hydrogen, replacing grey hydrogen with green. Second, we are very interested in efuels, particularly methanol. And finally, hydrogen for heavy-duty vehicles.”

The company is currently developing sites for all three focus areas. “We are taking projects right from identifying a location through feasibility, Feed, to FID and then we form a special purpose vehicle to take the project forward,” Cooley says.

“For us, the key thing is the development of sites and landbanks. We are working very closely with a whole network of large landowners, particularly industrial land, where you have assets like grid connections, substations and links to infrastructure—not only roads but gas pipes as well,” he adds.

However, Cooley notes that the Net Zero Hydrogen Fund represents a small investment from the UK government compared to what is offered elsewhere in the world, such as tax credits under the US Inflation Reduction Act, and “while we do not know how much revenue will flow through the Hydrogen Business Model, currently the visibility we have is that the UK government is investing a lot less than European member states”.

“The two IPCEIs, Hy2use and Hy2tech, are both €5bn matched with €8bn of industrial funding—we are talking orders of magnitude more resourcing,” says Cooley.

“Many developers are moving toward the US or to Europe. At H2 Green, we see some advantage in that. I do believe the UK is a great place to do green hydrogen, particularly in Scotland due to its renewable resources, so it is an opportunity for us to secure industrial sites and build partnerships within this country.”

The UK’s Department for Transport has today opened a consultation on a zero-emissions vehicle mandate, similar to its existing renewable transport fuel obligation (RTFO). The department proposes a minimum 22pc zero-emission vehicle share of new cars sold in 2024, increasing to 80pc by 2030 and reaching 100pc by 2035.

“We do need a standardised, easily accessible market mechanism for hydrogen in transport,” Cooley says, noting that he was a founding member of the UK H2 Mobility industry alliance in 2012. “We have been discussing an RTFO for green hydrogen with the Department for Transport for more than a decade.”

Offshore wind overload

Developer Statera Energy confirms that the Net Zero Hydrogen Fund grant will cover 50pc of its Feed, planning and consenting work toward the first 500MW of the Kintore project. The developer aims to complete Feed by next year and reach FID by 2025.

Statera’s managing director Tom Vernon tells Hydrogen Economist that the project will help to balance the grid as large offshore wind projects come online along the Scottish coast.

“There is currently c.4GW of electrical demand in Scotland with c.14GW of existing renewable generation and up to 25GW of additional offshore wind proposed to be constructed over the next decade, under the Scotwind programme,” he says. “However, the B6 boundary, the electrical constraint between Scotland and England, will only have capacity for c.15GW and that is after National Grid has added an additional 8GW of proposed reinforcement.”

“As opposed to curtailing the renewable generation that will be caught behind this grid constraint, Kintore Hydrogen is aiming to utilise it to produce low-cost, green hydrogen, so that energy can be transmitted south through the existing gas transmission pipelines. Initially this will be via blending and then via a proposed dedicated hydrogen pipeline being developed under Project Union,” he adds.

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Author: Polly Martin