Hydrogen could provide half of the UK’s final energy demand by 2050 and play a key role in the country hitting its net zero target, according to Aurora Energy Research.
On 24 June, it published Hydrogen for a Net Zero GB, setting out how both blue and green hydrogen will play an important role, providing up to 480TWh of hydrogen – or 45% of the country’s final energy demand by 2050. With all net zero scenarios requiring substantial growth, large-scale hydrogen adoption could help to integrate renewables into the power system by reducing the power sector’s need for flexibility during the peak winter months. This would boost revenues for clean power generators by £3bn per year by 2050.
A hydrogen pathway could boost the UK’s industrial competitiveness, specifically enabling the development of globally competitive low carbon industrial clusters around the Humber and Teeside. Falling technology costs and gas prices will drive a steady reduction in the market hydrogen price, the report added, noting it is set to fall below £50/MWh in 2050.
In identifying a cost effective hydrogen pathway, the report said there were some low-regret options for government to explore, including setting decarbonisation targets and promoting hydrogen demand in key sectors, deploying CCS in strategic locations, and advancing energy efficiency and network standardisation efforts. It suggested these initiatives could form an important part of the government’s post-COVID stimulus plan. Longer term, policy focus would need to shift to harmonising markets and accelerating cost reductions.