UK minister of state for industry, Sarah Jones, has said she is convinced hydrogen should “be at the heart” of plans to grow the economy and reach net zero by 2050.
“Low carbon hydrogen has a unique role to play in supporting the decarbonisation of power and in transitioning vital UK industries away from fossil fuels,” she said in the government’s latest hydrogen strategy update in December.
“Backing the UK hydrogen sector can unlock significant economic opportunities, whilst delivering a cleaner and more resilient energy system.”
This month’s update to the Department for Energy Security and Net Zero’s hydrogen strategy identifies low-carbon hydrogen as “essential” to achieving the government’s clean energy and growth missions.
The Hydrogen Skills Alliance estimates that the hydrogen industry will create about 29,000 direct jobs and 64,500 indirect jobs by 2030.
According to the Clean Power 2030 Action Plan published this month, government is targeting 2 GW to 7 GW of low-carbon dispatchable power capacity by 2030, including hydrogen.
That is the amount targeted under the clean power capacity range, which is the estimated amount needed to reach national clean power targets.
In its latest hydrogen market update, the government said that it aims to publish a shortlist of projects for the second Hydrogen Allocation Round (HAR2) “in due course”.
Eleven projects were offered potential contracts under the first allocation round (HAR1), representing a combined capacity of 125 MW.
Of those projects that made it through the first round, an initial three have so far been issued low-carbon hydrogen agreements.
The government said it expects contracts will be issued to the remaining projects in HAR1 “in early 2025”.
In September, nine months after the UK government allocated £2 billion to green hydrogen projects, industry raised concerns about delays and regulatory hurdles that put the qualifying projects at risk.
The energy department has now indicated that it will assess and “seek feedback on the proposed design and delivery” of the next third allocation round (HAR3).
It plans to then launch a review of the “design of allocation rounds” beyond the fourth round (HAR4) in 2025, which it said “could include moving to an independent allocation body” and a “price-based competitive allocation” model such as an auction.
In September, the government also said it would review the viability of technologies for the production of steel, indicating that possible options include hydrogen or natural gas.
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