A new industry report finds that a Hydrogen Storage Business Model, with pre-2025 interim measures, is urgently needed to manage differences between hydrogen supply and demand, a key instrument that will boost the UK’s energy security.
The report, undertaken by Hydrogen UK and its members, analyses the capabilities and gaps of hydrogen storage as the UK looks to become more energy resilient.
The UK has laid the foundation for a strong hydrogen industry. However, other jurisdictions including the EU and the US through its passage of the Inflation Reduction Act, are progressing policy to support the growth of hydrogen technologies. The UK Government must continue to push ambitious timelines to secure the more than £1.1 billion of private funding that is set to be invested in the UK’s hydrogen economy. This includes supporting the early growth of hydrogen storage. The implementation of the Hydrogen Storage Business Model and pre-2025 interim measures will be critical to this growth and accelerating hydrogen production projects.
Announcing the report’s publication, CEO of Hydrogen UK Clare Jackson said: “The UK has one of the highest dependencies on natural gas in Europe and is vulnerable to the volatility of the global energy market, especially following the geopolitical unrest of 2022. This is intensified by low natural gas storage capacity. This report highlights the importance of policy and investment in hydrogen infrastructure to ensure the UK is on track to meet both its net zero targets and energy security needs. The technologies are available for deployment now.”
Dan Sadler, Equinor’s Vice President for UK Low Carbon Solutions, said: “If the UK is to establish a world leading hydrogen economy which combines blue and green hydrogen production and a growing variety of off-takers, one thing is certain – hydrogen storage is an essential component for success. To that end, the UK should look to incentivise a minimum ‘low-regrets’ level of hydrogen storage in the 2020s. This should be focused on regions like the Humber where hydrogen, CCS and renewables come together. Hydrogen storage will ensure balancing hydrogen supply and demand is technically deliverable and commercially efficient. As a result, the UK will be able to develop one of the first at scale hydrogen economies in the world, helping deliver their climate change ambitions whilst creating and safeguarding thousands of long-term well-paid jobs.”
Ilesh Patel, Partner, Global Markets & Strategy Lead, Baringa, said: “Like nothing else, hydrogen has the potential to solve the truly ‘hard-to-abate’ cases of the energy transition. Unlocking hydrogen storage will help to balance supply and demand and therefore increase the speed of implementing the hydrogen economy”
Following the recent conclusion of the Government’s consultation on Transport and Storage, Hydrogen UK’s analysis explores the interim measures vital to bridging the differences between hydrogen supply and demand. If the measures are championed by industry and government alike, the UK will have a more independent and resilient energy system.
Renewable electricity generation frequently exceeds the network capacity and forces producers to switch their facilities off, costing British consumers £507 million, and energy generators 2.3 TWh of curtailed electricity in 2021. Therefore, it is crucial that UK takes advantage of hydrogen’s capacity to balance the future net zero electricity grid.
Hydrogen, one of the most versatile energy carriers, can be produced by several methods, including; natural gas reforming and the use of carbon capture (Blue), electrolysis through renewable energy sources (Green) and electrolysis through energy derived from nuclear (Pink). This means that at times of excess renewable or low carbon electricity generation, surplus power can be converted to hydrogen and accumulated for later use instead of being curtailed at a cost to consumers and producers.
The report is the first in a series that Hydrogen UK will be releasing throughout 2023 covering the entire hydrogen value chain and will include modelling and recommendations that can unlock hydrogen’s economic potential.