UK poised for energy boom as firms confident in ‘dream fuel’

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A number of firms are confident that hydrogen, a low-carbon alternative to fossil fuels, could be a “dream fuel” that may one-day power large swathes of the British economy as the nation scrambles to ramp up its renewable energy capacity. Hydrogen has been described as a future alternative to natural gas, particularly for industrial uses, which can be produced without emitting any greenhouse gases by splitting water in a process called electrolysis. 

The Government has committed to accelerating the country’s hydrogen capacity up to 10 GW by 2030 and developing a “thriving” hydrogen economy by 2050, while former Prime Minister Boris Johnson even said he wanted to make the UK the “Qatar of hydrogen”. But not everyone is convinced that the fuel, which is yet to really get off the ground, can solve our energy problems. 

For instance, MPs on the Science and Technology Committee recently said that hydrogen is “not a panacea” for cutting carbon emissions, warning that “any future use of hydrogen will be limited rather than universal”. Despite this, the Government has previously set out a blueprint to subsidize low-carbon hydrogen producers to get the technology up and running,  funding the difference between production costs and the market prices and giving producers confidence to invest.

Currently, most of the hydrogen used is only really used in oil refining and chemical production. And when produced for this purpose (by splitting methane gas into carbon dioxide and hydrogen), it emits vast amounts of CO2 (a greenhouse gas).

But despite some uncertainty, the UK is scattered with innovative companies that are keen to harness the full potential of hydrogen as firms compete to make waves in the industry. 

Tim Calver, commercial director at ITM Power, based like CPH2 in Yorkshire, told the Telegraph: “There are some areas the UK has really differentiated itself – for instance by getting to a clear hydrogen production business model which will allow people to sell hydrogen at an economic price.” 

But, he added: “We’d like to see more of an industrial strategy element. We are a Sheffield-based company; we’ve grown to 400 people in Sheffield. How do we make sure that we have the ability to invest and grow and build a significant industrial powerhouse?”

While this firm may claim the strategy element may be lacking, the Government has been pumping funds into the industry. Earlier this year, it launched the £60million HySupply 2 competition to support innovation in the supply of hydrogen, attempting to make the fuel more viable.

Funding was awarded to 28 projects across the UK, including Scotland, Wales and the north of England.  Leading engineering company Kent also won a £1billion contract to carry out the major design work for Vertex Hydrogen as part of a plan to create a huge hydrogen network to produce, store and distribute hydrogen to power industry and homes, known as HyNet North West. 

The hydrogen plant is expected to start producing in 2026, generating more than 1 GW of hydrogen. A joint venture between Essar Energy and Progressive Energy will oversee the design, development and construction of HyNet, which is considered to be one of two clusters selected by the Government to be fast-tracked.

Clean Power Hydrogen is another hydrogen company that appears to be making headway. Jom Duffy, the company’s CEO, told the Telegraph: “We’re very, very close now from being what was an R&D company two years ago to next year being a production company. 

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“There’s been some tremendous highs, and times when you are going faster than you possibly anticipate, combined with some times when it’s going slower than you really wanted and things happen that you hadn’t necessarily anticipated. But when you look through all of that, the passion within the whole business to just create something special – it’s amazing, it’s powerful.”

But while efforts are clearly being made to develop the technology, Serene Esuruoso, senior associate at the Carbon Trust, warned: “Production capacity has been stimulated. Getting end users to invest themselves in the pieces of equipment they might need; that’s now the missing piece.”

Mei Chia, Senior Business Lead in Carbon Capture at Honeywell Sustainable Technology Solutions, told a similar story, arguing that there is still a long way to go before we see hydrogen become a dominant part of the industrial energy system. 

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