The government has outlined how it will capture the “immense jobs and growth opportunities” the clean energy revolution offers.
Through the Clean Energy Industries Sector Plan, the government is focused on what it calls “frontier Clean Energy Industries” which are ones it considers have the greatest growth potential. This includes hydrogen. By making the most of existing strengths and backing these sectors, the government aims to make the UK the most attractive place in Europe to invest in clean energy industries, grown exports in key industries, and create hundreds of thousands of good quality jobs throughout the UK.
For hydrogen, it noted that the export market could range from £800 million to £2.2 billion through to 2030, growing further still by 2050 to £5.8 billion, or as much as 9.8 billion. However, it is a sector that is still emerging and faces high upfront costs and uncertainty.
Through the plan, the government’s aim is to provide that certainty, drive down costs and maximise growth opportunities. Key actions include providing further deployment certainty through the Hydrogen Allocation Rounds (HARs) – HAR3 will aim to launch by 2026, with HAR4 in 2028 – with plans to launch the first transport and storage allocation rounds in 2026, as well as the Hydrogen to Power business model.
A revised Hydrogen Strategy will be published, the UK’s first regional hydrogen network will be established from 2031, the government will support developers to be aware of the suppliers that are available when it comes to making procurement decisions for critical components, and efforts to achieve the industry-led ambition for 50% of UK local content for hydrogen across the value chain from 2030 will be supported.
Elsewhere, the government is considering expanding the CfD Clean Industry Bonus to hydrogen, will remove the Climate Change Levy Liability on electricity that is used in electrolysis to make hydrogen, assess the case for hydrogen blending into the existing GB gas distribution and transmission networks, and will work alongside industry to design a comprehensive hydrogen and carbon capture, usage and storage curriculum to help ensure the skilled workforce needed is in place.
