Issuu

UNLOCKING THE FULL POTENTIAL OF GREEN HYDROGEN

A COLLABORATION BETWEEN SCOTLAND & GERMA NY

COMING UP

NGK and Mitsubishi Heavy Industries to Jointly Develop Membrane Dehydration Systems

East Midlands Hydrogen: Progressing the Legacy of the Region

Unlocking the Full Potential of a Green Hydrogen Collaboration Between Scotland and Germany

Unlocking Economic Prosperity Through a Transport and Storage Sector

Hydrogen Safety: Your Core Questions Answered

FOREWORD

“Hydrogen safety is the most important part of the hydrogen economy”

Welcome to the latest edition of Hydrogen Industry Leaders, a magazine dedicated to the pioneers and visionaries shaping the future of the hydrogen economy. In this issue, we explore the innovations, challenges, and triumphs of an industry that stands at the forefront of the global energy transition.

In this edition, we delve into the latest technological advancements from hydrogen safety, to storage and distribution innovations. We also examine the policy frameworks and market dynamics driving investment and growth in hydrogen infrastructure worldwide.

Our featured articles highlight successful projects and collaborations that are setting benchmarks for the industry. We hear from leaders who are navigating the complexities of scaling up production and ensuring the sustainability of the hydrogen value chain. These stories of determination and ingenuity underscore the pivotal role of industry leaders in steering us toward a greener future.

Floyd March Editor f.march@peloton-events.co.uk

Hannah Wintle Multi Media Journalist

Paul Rose Graphic Designer

NGK

& MITSUBISHI

HEAVY INDUSTRIES TO JOINTLY DEVELOP MEMBRANE DEHYDRATION SYSTEMS

Efficiency, efficiency, efficiency. Whether it’s improving membrane separations systems for Bioethanol production, reducing energy consumption or rolling out electrolysers across the UK, efficiency is the at the heart of developing low-carbon technology.

Hoping to do just this, NGK and MHI aim to achieve the real-world realisation of systems using membrane separation system in the dehydration processes for Bioethanol, a promising alternative to gasoline and raw material for Sustainable Aviation Fuel (SAF), and e-Methanol, a next-generation clean marine fuel.

EFFICIENCY AT THE HEART OF FURTHER LOW-CARBON DEVELOPMENTS

By utilising membrane dehydration systems, the companies will work to realise low-cost and to optimise the efficiency of their manufacturing processes of next-generation clean fuels contributing to the future establishment of a stable supply system.

In this project, MHI and NGK will begin developing two types of membrane dehydration systems, one for Bioethanol and e-Methanol, respectively.

The membrane separation system developed for Bioethanol will replace the conventional dehydration process, which consumes the most energy in the Bioethanol manufacturing process.

This replacement is expected to achieve a significant reduction in energy required to produce Bioethanol.

The second system will replace the dehydration process in the production of e-Methanol, which utilises hydrogen and CO2 as raw materials. By using a membrane separation system instead, the companies expect to significantly reduce energy consumption used in the manufacture of e-Methanol, which is capturing attention as a next-generation clean fuel.

MITSUBISHI LOOKING TO MAKE EXPERIENCE PAY OFF

To this project, MHI will contribute its significant global expertise delivering methanol plants and other chemical plants, in addition to its technologies for handling methanol and various other chemicals.

NGK will contribute its deep knowledge of subnano ceramic membrane technology and unique film deposition technology developed in the fields of chemical processes and water purification.

Notably, NGK has developed the world’s largest ceramic membranes, which are known for their exceptional separation accuracy and durability. In the context of forecasted demand growth for both Bioethanol and e-Methanol as clean, raw materials and fuels, MHI and NGK will jointly drive forward the development of these systems achieve real-word deployment and establishment of a stable supply system.

Bioethanol is a clean fuel derived from plants, primarily corn and sugarcane, and is widely used as automotive fuel in the United States and Brazil. It is also expected to contribute to the growth of Sustainable Aviation Fuel (SAF) as one of its main raw materials.

e-Methanol is gaining attention as a nextgeneration clean fuel, primarily for marine fuel, and is expected to grow as a market globally.

MHI Group is pursuing a growth strategy in the area of Energy Transition, aiming for decarbonisation on the energy supply side to support the Company’s goal of achieving Carbon Neutrality by 2040.

Through the development and commercialisation of a high-efficiency manufacturing processes for hydrogen-free Bioethanol and e-Methanol, the Company will strive for early establishment and execution of decarbonisation technologies, as a way of contributing to the realisation of a sustainable, Carbon-Neutral world.

NGK Group has formulated a “Carbon Neutrality Strategic Roadmap” consisting of four strategies to contribute to the realisation of a carbon-neutral society and promoting the development and provision of hydrogen and Carbon dioxide Capture, Utilisation and Storage (CCUS) related technologies, and products.

STRATEGY 1: DEVELOPMENT AND PROVISION OF CARBON NEUTRALITY (CN)RELATED PRODUCTS/SERVICES

In addition to our existing carbon neutrality (CN)related products, we will also work to commercialise new products under development as well as offer society NAS battery-driven renewable energy supply business and other relevant services.

STRATEGY 2: TOP-DOWN ENHANCEMENT OF ENERGY-SAVING

We will work to further enhance our existing energy conservation activities, as well as introduce high efficiency equipment and facilities and more energy-efficient operations.

STRATEGY 3: PROMOTION OF TECHNICAL INNOVATION

Although the ceramics firing process requires fossil fuel which is responsible for CO2 emissions, we will work to switch over to hydrogen, ammonia and other fuels that will allow us to become fossil fuelfree.

STRATEGY 4: EXPANDED USE OF RENEWABLE ENERGY

In addition to promoting various renewable energy procurement strategies both within Japan and overseas, we will install photovoltaic (PV) power generation systems at manufacturing sites within the NGK Group, and use them in conjunction with NAS batteries and zinc rechargeable batteries, to achieve demand control. We will use this as a model case in NGK Group’s renewable energy business, and work towards the goal of enabling all energy demand within the NGK Group to be met through renewable energy.

EAST MIDLANDS HYDROGEN: PROGRESSING THE LEGACY OF THE REGION

As the birthplace of the Industrial Revolution, the East Midlands has a proud legacy to uphold as the UK’s attention shifts towards decarbonisation and the role hydrogen will play in this journey.

East Midlands Hydrogen, the UK’s largest inland hydrogen cluster, is one such representation of the continuation of this legacy. A partnership of public and private sector bodies, the initiative seeks to accelerate the UK’s hydrogen economy and support further growth through enhancing skills and creating jobs throughout the East Midlands.

Through the combined expertise of industry and academia, the East Midlands is poised to attract investment and develop demand ahead of an upcoming energy revolution, more than two hundred years after it triggered unprecedented industry growth on a global scale.

The HIL 100 Breakfast Hub in Nottingham brought together industry leaders from Cadent, HORIBA MIRA, D2N2, Arup, and the University of Nottingham to discuss just this, and to ascertain what more needs to be done to secure the future of hydrogen in the region and wider UK.

One of the key things we need to do is to make sure that that legacy succeeds and carries on.

Will Morlidge, Chief Executive Officer, D2N2

PRESERVING AND ENHANCING REGIONAL SKILLS WILL BE ESSENTIAL TO MAINTAIN THE WORKFORCE

Thanks to its rich industrial history, the East Midlands has a wealth of resources that make it a key area in the development of a UK hydrogen economy today.

Will Morlidge, Chief Executive Officer of D2N2, explained: “We’ve got this legacy of the Industrial Revolution, which is historic and geographically driven.

“Up the Trent we’ve got all this connectivity, we’ve got the power stations, we’ve got the grid connections, we’ve got the natural resources, and fortunately, we’ve also got a lot of skilled people still in and around those power stations.”

The desire to maximise current skills and curate the environment for a future workforce is a clear priority to secure the region’s success, but in order to do so, emphasis is falling upon early intervention in schools.

Will highlighted that industry experts going into classrooms and putting the skills they learn through their education into a regional context is key to instilling a passion that leads to more STEM careers being pursued.

As each panellist agreed that these interventions are necessary, Lois Milner-El Kharouf, Senior Project Manager of Hydrogen and Energy Projects at Arup, also pointed out the desire amongst the younger generations to embrace change.

She said: “We need the apprenticeships, we need the curriculum, we need the material to teach to young people. But I think what is coming from this younger generation is the passion for wanting to do something about it.

“That’s a huge opportunity for us as the hydrogen community to say, ‘come and get involved in hydrogen and you can make a difference’.”

THE EAST MIDLANDS HAS VAST POTENTIAL TO

ATTRACT DEVELOPERS AND DECARBONISE OPERATIONS

When it comes to attracting investment in the region, Sarah Windrum, Future Mobility Cluster Lead at HORIBA MIRA, emphasised the potential to play to the region’s strengths and exploit the assets the East Midlands has at its disposal when it comes to attracting developers.

She said: “What we can offer, particularly what we can offer in this region, is that kind of joined up pathway. So come here, develop your innovation, work with our world leading universities and then here’s the places where you can go and scale that, and here’s the talent and the skills. We provide this kind of really great ecosystem for these companies to build.”

Echoing these sentiments, Henner Wapenhans, Professor of Innovation for Zero Carbon Technologies at the University of Nottingham, added: “We shouldn’t be shy about the inherent strengths that we have in this region, and whilst there are a lot of new elements to this new technology, there’s also a lot of embedded knowledge that’s really, really important.”

Where decarbonisation is concerned, Kelly Manders, Regional Development Manager at Cadent, also acknowledged that industries wishing to cut their carbon emissions can be aided by the work taking place in the East Midlands.

She said: “There’s a huge amount going on in industry in this region. There are huge numbers of people employed in manufacturing, food and drink, construction materials, in this region, and they need help to decarbonise.

“They have businesses to run. They have very small margins and they are on that decarbonisation journey, but they need help. There needs to be additional support.”

To assist industry where fuel switching is concerned, Kelly acknowledged the adjustments that need to be made, but drew similarities between current practice and the protocols necessary for hydrogen.

Many of the skills in use today are transferable, and while Cadent are training their engineers to ready them for hydrogen, some adjustments to be made are as minor as altering PPE, including not wearing footwear with shoelaces.

“Yes, it is a big transition,” Kelly continued. “Yes, we’ve got huge amounts of work to do in innovation, but there are some very small steps that we can take to get ready and help our industry that’s located here get ready.”

We should actually become encouraged to be doing this innovation because it’s actually quite a continuation from where we are.

HOW CAN THE EAST MIDLANDS ARTICULATE ITS HYDROGEN VISION?

With ambitions to bolster skills, and routes to attract developers and decarbonise local industry, attention is now turning to how the East Midlands can best market the potential of the region, and establish itself as a major player in the UK hydrogen economy.

Will said: “We’ve got really good opportunities now, with the East Midlands Freeport, East Midlands Institute of Technology, East Midlands Combined Authority, East Midlands Hydrogen. We’re starting to get better at articulating the East Midlands vision.”

In particular, Kelly highlighted how the newly devolved East Midlands now has a larger presence on the UK stage thanks to the recent election of Mayor Claire Ward in early May.

She said: “I think we need the voice, and now we’ve voted her in. We haven’t had a voice representing the East Midlands. Some of the other voices in Manchester and Birmingham are much louder than we’ve ever been and so we have that chance to utilise that.

“I think Claire gets it. I think she likes hydrogen, she supports it. She supports the kind of general green energy, low carbon transition. We need to put her on a platform as often as we can.”

As UK wide efforts to bolster the hydrogen industry pick up pace ahead of looming climate deadlines, the East Midlands has certainly carved out its place in the sector through industry leading initiatives, essential skills development, and academia.

Now, equipped with greater devolved powers and a unifying voice, it is hoped that the region can preserve the legacy it started over two centuries ago, and nurture its historic industry roots to develop a greener future through hydrogen.

HYDROGEN SAFETY: YOUR CORE QUESTIONS ANSWERED

The Hydrogen Industry Leaders event series, coupled with the ongoing monthly magazine has seen a wide range of topics and conversations surrounding the hydrogen economy.

Whether talking about the biggest projects across Scotland and the rest of the UK, securing a hydrogen supply chain, or the role of the public sector in building the hydrogen economy; there is one golden thread. How do we ensure safety in the hydrogen sector?

Other questions circling the sector include:

1. What health and safety laws currently apply to UK hydrogen activities?

2. What possible approaches are there for further regulating hydrogen in the UK?

3. What is being done to assess hydrogen safety in practice?

Before tackling these questions head on, it feels natural to explain the inherent properties of hydrogen which makes raise safety management concerns. These include:

A hydrogen flame is difficult to see in daylight and emits minimal heat, making detection challenging without flame detection colorants.

Hydrogen’s buoyancy causes it to rise quickly, potentially leading to the rapid formation of explosive mixtures.

Hydrogen lacks an odor, making it hard to detect without added odorants.

Hydrogen is more efficiently transported as a cryogenic liquid than as a gas due to its large volume, requiring specialised training for handlers.

Accidental air-hydrogen mixtures within contained systems must be avoided due to their high volatility, necessitating well-planned maintenance instead of reactive approaches.

Hydrogen corrodes certain materials, like steel, faster than natural gas, requiring careful consideration of materials used in its storage and transportation.

Focussing on regulation, the UK gas network is commercially regulated by the Gas and Electricity Markets Authority, which operates through Ofgem. Under the Gas Act 1986, hydrogen is classified as ‘gas’ and is thus regulated as part of the gas network.

WHAT HEALTH AND SAFETY LAWS CURRENTLY APPLY TO UK HYDROGEN ACTIVITIES?

Consequently, anyone involved in hydrogen operations must obtain a licence under the Gas Act. Additionally, there is an established legislative regime and framework governing gas and pipelines that also applies to hydrogen.

The Planning (Hazardous Substances) Act 1990 and Planning (Hazardous Substances) Regulations 2015 regulate hydrogen storage, requiring consent for storing two or more tonnes of hydrogen.

Additionally, the Dangerous Substances and Explosive Atmosphere Regulations (DSEAR) 2002 mandate that employers eliminate or control risks from explosive atmospheres and dangerous substances in the workplace. DSEAR implements two EU directives on controlling explosive atmospheres, collectively known as ATEX.

The Pipeline Safety Regulations 1996 outline requirements for the design, construction, installation, operation, maintenance, and decommissioning of pipelines. The Notification of Installations Handling Hazardous Substances Regulations 2002 imposes restrictions on handling hazardous substances in large quantities.

Gas Safety (Management) Regulations (GSMR) 1996 require gas transporters, including those handling hydrogen, to submit a safety case to the Health & Safety Executive (HSE) detailing hazard identification and risk control measures.

Control of Major Accident Hazards Regulations 2015 require operators to take all necessary measures to prevent major accidents and limit their consequences for human health and the environment.

The Alternative Fuels Infrastructure Regulations 2017 apply to the provision of infrastructure for alternative fuels, including hydrogen for vehicles and seagoing ships at berth.

Given the absence of hydrogen-specific safety legislation, the UK hydrogen market will initially operate under existing laws supplemented by hydrogen-specific standards and guidance.

WHAT POSSIBLE APPROACHES

ARE THERE FOR FURTHER REGULATING HYDROGEN IN THE UK?

Given the absence of hydrogen-specific safety legislation, the UK hydrogen market will initially operate under existing laws supplemented by hydrogen-specific standards and guidance.

The GSMR currently limits hydrogen to 0.1% in the gas network, with higher amounts requiring an HSE exemption, which is currently under trial. Exemptions are granted only if it can be demonstrated that health and safety are not compromised.

UK HYDROGEN PROJECTS AND HSE INVOLVEMENT

f Scotland: INEOS and Scottish Gas Networks are working on a 29km pipeline project to repurpose natural gas pipelines for hydrogen distribution.

f Keele University: A £7 million zero-carbon hydrogen injection gas network heats 100 homes and 30 faculty buildings using a 20% hydrogen blend.

f Winlanton: A Cadent/Northern Gas Networks partnership supplies a 20% hydrogen blend to 670 homes for heating and cooking.

The HSE is also engaged in various projects:

f Ensuring the safety of hydrogen vehicles in tunnels and confined spaces.

f Assisting the Port of London in developing a national hydrogen highway network.

f Researching the safe use of liquid hydrogen.

UNLOCKING THE FULL POTENTIAL OF GREEN HYDROGEN A COLLABORATION BETWEEN SCOTLAND & GERMANY

UK-based Net Zero Technology Centre (NZTC) and German-based Cruh21 have launched a report that will help unlock the full potential of a green hydrogen collaboration between Scotland and Germany.

The ‘Enabling Green Hydrogen Exports: Matching Scottish Production to German Demand’ report analyses Scottish hydrogen production and German demand creating matching scenarios for hydrogen export and consumption, exploring multi-sector end use, the technologies, infrastructure, and regulatory frameworks required to enable a safe and effective distribution of hydrogen.

The report indicates prospective Scottish hydrogen exports could potentially satisfy 22% to 100% of Germany’s hydrogen import volume by 2045.

TWO CRITICAL DEVELOPMENTAL STAGES ARE IDENTIFIED IN THE REPORT

The first stage looks at the short term, up to 2030, and encompasses early production and end-use activities preceding the installation of hydrogen pipelines to export 35 TWh of hydrogen.

The second stage looks at a period of 2030-2045 and involves the commissioning and ramp-up of pipeline infrastructure to facilitate enhanced distribution at a low cost to export 94 TWh of hydrogen.

Hearing from Ana Almeida, Senior Project Engineer, NZTC Hydrogen Industry Leaders heard: “Whilst the potential for hydrogen production in Scotland is well understood alongside the scale of predicted demand in Germany, there is a lack of tangible strategies connecting supply and demand and its evolution from present day to 2045, when both countries aim to achieve Net Zero carbon emission targets.”

The scenarios outlined in this report illustrate pathways to maximise the opportunity of international hydrogen distribution.

Cabinet Secretary for Net Zero and Energy Mairi McAllan said: “Scotland is strongly positioned to become a major exporter of hydrogen to Northern Europe and the UK – contributing to our climate objectives and to green economic property for our nation. Today’s report, which the Scottish Government commissioned and funded, explores how to match Scottish hydrogen production to German hydrogen demand.

“Green hydrogen that is created with renewable electricity will help to reduce our emissions for hard to decarbonise sectors in Scotland and could also be a great export opportunity to the rest of the UK and to our European neighbours. We are determined to realise this opportunity and will shortly be publishing an export plan for to this end.”

GERMANY’S CURRENT ANNUAL HYDROGEN DEMAND OF 55 TWH IS PRIMARILY DERIVED FROM VARIOUS INDUSTRIAL PROCESSES

These include 21.3 TWh from the desulphurisation of conventional fuels in refining, 20.6 TWh from ammonia production plants, and 4.7 TWh from methanol production plants. Notably, hydrogen in these industries is predominantly produced via steam methane reforming (SMR).

Considering the variety of studies with different focuses leading to diverging predictions for hydrogen demand in Germany, a metanalysis is conducted in the first section below.

In addition, the currently announced supply and demand projects are analysed to complement the top-down approach considered in the metanalysis. Furthermore, possible applications for hydrogen and its derivatives in Germany are analysed.

The report offers a comprehensive overview of study results concerning the demand for hydrogen and synthesis products across various sectors in Germany, including industry, transport, buildings, and power.

Developing the report in collaboration with Cruh21 also ensured the barriers and benefits for both countries were fully considered.

In the building sector, most studies project minimal to no hydrogen demand by 2030, primarily relying on heat pumps for heating purposes. By 2045, a slight increase in hydrogen demand is anticipated, with the Ariadne study projecting the highest demand at 68 TWh, contingent upon abundant hydrogen production or importation.

According to this study: “The heating systems and distribution networks must be successively converted to hydrogen in some areas and are operated with e-methane in a few cases. In the power/energy sector, the necessity of a coal exit for climate neutrality, as highlighted by Agora, leads to a significant demand for hydrogen.”

Despite the use of hydrogen in the building sector in the balance, all studies anticipate a demand for hydrogen in the transport sector, with projections ranging from 10 TWh or less in 2030 to a range of 20 TWh to 178 TWh by 2045.

The report added: “An effective strategy to achieve this goal is to convert industrial processes to hydrogen, which is particularly beneficial for processes that require high temperatures, such as steel production. As a result, hydrogen demand in the industry sector is expected to grow steadily until 2045.”

Overall, the hydrogen demand in Germany is notably high, with numerous production projects in the planning stages. However, these initiatives will likely cover only a portion of the overall demand.

Meryem Maghrebi, consultant at cruh21 said: “This report provides a holistic overview and stresses the necessity of developing a synchronised hydrogen and derivatives infrastructure, encompassing export terminals and pipeline networks, to bolster the hydrogen supply chain between Scotland and Germany.

“The critical factors to accelerate collaboration between Scotland and Germany lie in mapping supply and demand development and the establishment of Pan North Sea transport infrastructure. The cooperation with NZTC is a first step towards this goal.”

STORAGE AND TRANSPORT OPTIONS STORAGE SOLUTIONS ARE AN IMPORTANT ELEMENT IN ENSURING THE RELIABILITY AND FLEXIBILITY OF ENERGY SYSTEMS

Salt caverns provide storage volumes from 200,000 m3 to 800,000 m3 and keep about a third of the gas storage volume as cushion gas, which is a relatively low proportion.

Salt caverns allow for the storage of hydrogen at pressures of 100 to 275 bar. Since only a small footprint is required above ground, they provide a low cost storage option for load balancing and trading reserve.

“Depleted Oil and Gas fields provide larger storage capacities than salt caverns, but tend to be more permeable which could compromise the purity of hydrogen stored in these conditions,” the report added.

STORAGE AND TRANSPORT OPTIONS STORAGE SOLUTIONS ARE AN IMPORTANT ELEMENT IN ENSURING THE RELIABILITY AND FLEXIBILITY OF ENERGY SYSTEMS

Salt caverns provide storage volumes from 200,000 m3 to 800,000 m3 and keep about a third of the gas storage volume as cushion gas, which is a relatively low proportion.

The potential presence of residual hydrocarbons in the reservoir is also a concern as it may require separation from hydrogen upon extraction.

UNLOCKING ECONOMIC PROSPERITY THROUGH A TRANSPORT & STORAGE SECTOR

According to recent research conducted by the University of Strathclyde, the establishment of a CO2 Transport and Storage (T&S) sector in Scotland, linked to the deployment of CCUS in the UK, could support more than 3,000 jobs and generate £300 million for the wider UK economy.

Should a Scottish T&S sector become fully operational by 2030, it is reported that the number of jobs could be up 300%, and GDP up by 84%, compared to a scenario where no action has been taken to alleviate current labour market constraints and pressures.

Furthermore, economic gains could be further amplified if a Scottish T&S sector develops an export market to sequester emissions from elsewhere in the UK or overseas. Depending on the current government support continuing, the jobs supported could increase to just over 4,900 and GDP to nearly £490M per annum by 2042.

However to see these results, careful attention must be paid to the current skills landscape, with action being taken now to address shortages.

To understand where hydrogen fits into the narrative, Hydrogen Industry Leaders spoke to Dr Antonios Katris, Research Fellow at the University of Strathclyde, for his insights into the current landscape and outlook for the future.

BUILDING AND MAINTAINING THE WORKFORCE NEEDS TO BE A PRIORITY IF ECONOMIC BENEFITS ARE TO BE UNLOCKED

With the current UK objective to establish four industrial blue hydrogen clusters - HyNet, East Coast Cluster, Acorn, and Viking - CCUS forms an essential piece of the puzzle.

“In that sense,” Antonios said, “establishing a transport and storage system is almost a prerequisite to actually have a blue hydrogen production and start establishing effectively a hydrogen economy.”

“One of the key challenges here is that there is a clear and well documented lack of skilled and sufficient-in-numbers labour force. In the absence of that, the development process itself is delayed and the course is affected as well.”

A recommendation laid out in Chris Skidmore’s 2022 net zero review called for a comprehensive workforce planning strategy in place, which is set to be released this year.

“This is the starting point. It is essential to have some kind of document, some kind of planning that determines how many people need to be trained, in what profession, over what timeframes.”

I’m worried that on some occasions we might sound like a broken record, but in practice, the widespread recognition that labour constraints and skill availability is a significant issue that needs to be addressed now, confirms that we are on the right track in terms of identifying what is important. Then the next thing is something needs to be done about it.

SEQUENCING HYDROGEN PROJECTS IS ESSENTIAL TO DELIVERING NET ZERO

To maximise not only the skills, but also the resources at our disposal when it comes to delivering hydrogen projects, thorough planning and sequencing is vital not only to ensure timely delivery that meets a high standard, but also to maximise the projects benefits.

While in some cases, the overlapping of projects may be unavoidable, for the most part, having appropriate planning in place can help mitigate the competition for resources, whether it be the actual building materials required, or skilled workers.

“In our last report on the work that we did on the Scotland’s net zero infrastructure project, you see that if you develop all the different systems at the same time, there is an implicit competition for resources that pushes the labour cost upwards, so that erodes to some extent the gains that you could get as a result of of the additional activity that this development is introducing.”

“Transport and storage is effectively a fairly small chunk of what is going to be necessary. You can only imagine what would be the case if you have multiple billions of pounds worth of investments happening simultaneously.”

Appropriate sequencing can also prevent wider strains on the economy through, for example, increased labour costs, that could exacerbate the cost of living crisis felt by many in the UK.

Therefore, while these infrastructure projects can create employment opportunities and simultaneously boost the wider economy, Antonios noted that not everyone will benefit from this directly. “But if the prices go up,” he emphasised, “everyone will have to deal with them in one way or another.”

It’s also important to consider the impacts on local economies. As much as possible, when developing the T&S network and the CCUS infrastructure necessary for hydrogen, local skills should be utilised.

With the movement of skilled workers from one area to another comes the deterioration of one local economy through empty homes and the loss of custom in local establishments, while creating added strain on another as they try to meet the new increased demand.

Anntonios said: “If you can promote that people already in local communities can be trained, can be used in developing the infrastructure, then this whole displacement can be, if not avoided, it can be mitigated.”

SCOTLAND HAVE A SIGNIFICANT ROLE TO PLAY ONCE T&S IS ADDRESSED

Having made significant progress and set ambitious goals for the advancement of the hydrogen sector, Scotland is positioning itself as an increasingly valuable asset when it comes to the wider UK hydrogen economy.

“It’s a natural place where you have the renewable generation capacity, you have limitations that drive you towards the use of green hydrogen instead of connecting to the grid,” Antonios said.

“So in that sense, I can see Scotland having a quite important role to play in terms of developing a green hydrogen economy in the UK and potentially being able to capture part of the hydrogen market and at the European or international level, once the transportation limitations have been addressed.”

It is, in fact, essential to start building the basis of a hydrogen economy. If we actually see hydrogen as being part of the fuel mix of the future, we need to build the basis now.

With the promising implications of developing a T&S sector, the industry must now turn their attention to address skills and jobs to maximise economic prosperity.

Scotland’s natural resources and their significant strides to date in developing hydrogen projects position the country as a key player in the UK’s hydrogen efforts.

“It is, in fact, essential to start building the basis of a hydrogen economy. If we actually see hydrogen as being part of the fuel mix of the future, we need to build the basis now.”

Ultimately, Antonios acknowledged that the right government support and comprehensive strategies in place will continue to facilitate the growth of Scotland’s hydrogen potential.

He concluded: “I can’t really see any kind of future green hydrogen sector that doesn’t have a strong Scottish component. Given the size of the ambition here, government support will very important for Scotland.”

AN ASSESSMENT OF WHAT IS CURRENTLY MISSING FROM EU POLICY FRAMEWORKS

With world leaders looking to grow the hydrogen economy, the different approaches from the UK’s HBM, the US’ IRA, and the EU’s hydrogen bank have always made me ponder where the policy gaps are, and how they are then plugged.

While policy gaps can be filled and is a natural process in building a new economy, highlighting them is the first step to establishing the steps to plug them. The latest 2024 State of the European Hydrogen Market report sets out where these gaps are.

It is widely understood that the EU has created a complex framework of regulations and directives. However, the implementation of the directives and the development of subsidy mechanisms is up to the Member States.

This brings us to one of the first major policy gaps the market is currently facing, which is high entry barriers and lack of investment security.

RENEWABLE HYDROGEN PROJECTS REQUIRE HIGH UPFRONT INVESTMENTS, AND THE VIABILITY OF PROJECTS ARE CURRENTLY UNCERTAIN

The report, authored by the OIES, explained: “Higher production costs, lack of project off takers, high technical and commercial risks not mitigated by the regulatory framework dampen investment appetite and make the market inaccessible to smaller players.”

With hydrogen predominantly produced from fossil fuels there are also issues with competitiveness, and the policy gaps here surround funding opportunities to make green hydrogen more competitively.

“Currently renewable hydrogen prices are higher than those for hydrogen produced from traditional fossil fuels. Support is needed to narrow the gap between the two and to make the renewable option more attractive and competitive. However, we should be careful with the business models that require indefinite subsidies.”

When speaking to industry leaders, through our event series and interviews across our multimedia platform, I can never escape conversations around the need for technological neutrality.

It seems to be a natural reaction for Governments to try and pick one specific technology to run with

While this is a pretty mundane and obvious conversation to be having, it seems to be a natural reaction for Governments to try and pick one specific technology to run with.

I’ve discussed this at great length, specifically since the release of the two Delegated Acts published just over a year ago. With the EU requirement for RFNBOs by 2030 being at the heart of the Act, there is a shadow of doubt creeping up when considering the effectiveness of the approach.

With the current limited capacities to produce renewable hydrogen 24/7, the closer we get to 2030, the more difficult it could become to reach this target. However, if this ‘all in’ approach in the Delegated Act had encompassed other technologies then we could open the door to a more pragmatic approach to hydrogen.

Authors at the OIES have also encapsulated this throughout their report. They stated: “The EU should also consider the advantages of low-carbon electrolytic hydrogen (based on nuclear electricity and electricity network) to have a large-scale hydrogen production.”

THE EU FRAMEWORK DOESN’T CONSIDER

HOW DEVELOPED HYDROGEN TECHNOLOGIES AREBUT DOES IT NEED TO?

Technology readiness is another conversation that dominates the events circuit. Understandably, the sector is cautious about this point, but I have always argued - perhaps naively - that we should take confidence in examples of how other renewable technologies have grown in the past.

I put this point to a guest in a recent hydrogen podcast, explaining that growth doesn’t always need to be exponential from the offset - and in fact, rarely is. I was pleased to hear (some) people in the sector have taken this approach in looking at other parts of the renewable jigsaw.

While a contentious point, the evidence of solar and wind generation compared to where it was even five years ago can’t be ignored. Take government figures from 2023, which saw cumulative capacity at a record high of just over 30 GW, compared to 10 years before that which saw a cumulative capacity of roughly 10.6 GW.

If we look even further back, 2008 saw just 2.9 GW cumulative capacity. This growth is impressive, and we should take great encouragement from this when thinking about meeting hydrogen targets.

Back to reality, and scalability and maturity may actually matter a lot more than my somewhat flippant remarks on other renewable rollouts. The landscape of maturity differs in each sector with fuel cell technology growing and developing nicely.

If we cast our minds to the state of the industrial sector, and Europe is peppered with pilot projects and FID issues. The lack of business model in this sector may hinder the development of hydrogen and further policy frameworks, whether that be funding or legislation guidance, is imperative.

Defining low-carbon hydrogen on a national scale has its own set of difficulties but when looking at it through the lens of future exporting opportunities, it is exacerbated.

WHILE THE EU IS WORKING ON A NEW DELEGATED ACT FOR 2025 TO DEFINE THIS, THE CURRENT ABSENCE IS AN ADDITIONAL CHALLENGE FOR BUSINESSES

However, there are policies and legal frameworks in place that are encouraging the sector to develop hydrogen. Almost one year on from The Energy Act 2023, a number of measures for hydrogen production have been introduced.

f Government support mechanisms for hydrogen production and Carbon Capture Use and Storage (CCUS).

f A levy on natural gas network users to finance the subsidy of hydrogen production.

f Regulatory framework for hydrogen and CO2 transport and storage.

f Strategic planning for energy infrastructure, including hydrogen, by the Future System Operator.

The UK has currently developed a main mechanism named the HPMB which uses the CfD approach to plug the holes between cost of production and the sales price producers achieve.

De-risking investments while achieving clear definitions and smoothing the current bumps in EU policy frameworks is a proactive approach to take. Hydrogen can be produced by a variety of production pathways but must have a carbon intensity of 20gCO2e/MJ or less under current UK rules.

These are just a small collection of my thoughts and assessment of what is currently missing from EU and UK policy frameworks. If you’ve got any thoughts or feelings on this huge topic, feel free to contact me on social media or through my email at f.march@peloton-events.co.uk, and I’d happily continue the conversation with you.

The Hydrogen Industry Leaders Roundtables are set to ignite dynamic conversations, foster collaboration, and pave the way for a sustainable hydrogen-powered future. Our distinguished roundtables will cover legislation, law, and private finance, each bringing their unique perspectives to the table. These roundtables can be tailored to your specific business objectives and needs.

Hydrogen Industry Leaders Issue 25