The government has launched a consultation, seeking views on hydrogen transport and storage infrastructure business model designs, regulatory arrangements, strategic planning, and the role of blending.
Set to run until 11:45PM on 22 November, the consultation is specifically exploring design options for hydrogen transport and storage infrastructure business models; the need for a strategic planning function to guide the rollout of hydrogen transport and storage infrastructure, as well as the potential implementation options; and whether the existing market framework and industry commercial arrangements are optimal for supporting the deployment of hydrogen transport and storage infrastructure.
Further areas of focus include the suitability of the non-economic regulatory framework across the hydrogen value chain, along with the extent to which blending could help to provide market-building benefits for the hydrogen economy, such as bringing forward investment in hydrogen production while larger-scale hydrogen transport and storage infrastructure is being developed.
Mapping out its vision for hydrogen transport and storage infrastructure, it explained the ambition is to reach a large, liquid and competitive hydrogen market, enabled by an integrated and resilient network with multiple entry and exit points, connected to several hydrogen storage facilities at various scales. This is something it believes could begin to materialize from the mid-2030s.
It also expects the market to be able to operate free of subsidy, though likely not regulation, while it sees business models as a key way of removing barriers for both hydrogen transport and storage and stimulating private investment in the necessary support infrastructure to deliver on this vision. These barriers include supply and demand uncertainty, a limited consumer base to cover costs and high costs for hydrogen transport, along with demand uncertainty, high costs, policy and regulatory uncertainty and commercial uncertainties for hydrogen storage.
On the role of blending, the government sees it acting as a reserve offtaker, deeming that to be the most appropriate strategic role. It explained that during the early phases of the development of a hydrogen economy, when the number of available end users for hydrogen are more limited, blending could offer a route to market for hydrogen producers. However, given it relies on an extensive natural gas network to blend into, something that will naturally reduce as the UK moves towards net zero, it said it should only be seen as a transitional option. It could also help to provide transferable insights and infrastructure for a potential future transition to 100% hydrogen, raising public awareness and acceptance of hydrogen for heat.
