Accelerating Green Hydrogen Deployment in the UK: A Roadmap for Cost Reduction
Key Ideas
- RenewableUK and Hydrogen UK released a report focusing on reducing green hydrogen production costs by addressing the high electricity price component, aiming to cut costs from £241 to less than £100 per MWh.
- Strategic measures outlined in the report include exploring new pricing mechanisms, incentivizing flexibility in electrolytic hydrogen use, and establishing a hydrogen transmission network between Scotland, England, and Wales.
- The collaboration between the government and industry associations aims to attract private investment, create job opportunities, drive economic growth, and position the UK as a global leader in green hydrogen technology by the end of the decade.
- The report emphasizes the importance of innovative business models, early-stage technology recognition in pricing, and incentives for co-locating electrolysers with renewable energy farms to enhance cost efficiency and scalability of green hydrogen production.
RenewableUK and Hydrogen UK have jointly released a report focused on accelerating the deployment of green hydrogen in the UK by reducing production costs through addressing the substantial component of electricity prices in electrolysis. The report, titled 'Splitting the difference – reducing the cost of green hydrogen to accelerate deployment,' stresses the pivotal role of green hydrogen in future-proofing and decarbonizing the UK's energy system. It highlights the necessity of creating economies of scale to enhance the affordability of hydrogen.
The report sets a target to decrease the cost of hydrogen production from the initial £241 per MWh to less than £100 per MWh by implementing various strategic measures. These include exploring alternative pricing options for electrolytic hydrogen developers, fixing power prices through the Contract for Difference (CfD) process, and introducing pre-approved design stages to facilitate investment in flexible assets retrofitting.
The proposed measures also involve incentivizing flexibility in electrolyser use, accommodating regional variations in carbon intensity, and developing a hydrogen transmission network linking Scotland to England and Wales. By collaborating with industry, the government aims to evolve the funding landscape, attract private investments, and position the UK as a frontrunner in green hydrogen technology.
The sentiment in the article is positive, emphasizing the transformative potential of green hydrogen for the UK's energy system and economy. Dan McGrail, CEO of RenewableUK, and Clare Jackson, CEO of Hydrogen UK, express optimism about the report's implications, highlighting the need for innovative business models, early-stage technology recognition in pricing, and co-location incentives to drive down costs and stimulate job creation.
Topics
Projects
Renewable Energy
Job Creation
Economic Growth
Government Collaboration
Cost Reduction
Private Investment
Innovative Business Models
Energy System Decarbonisation
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