Construction companies could get government grants to convince them to use hydrogen instead of fossil fuels as part of the new plans unveiled today.
Ministers have allocated £ 105 million to help polluting industries ban high-carbon fuels like red diesel from their operations.
The government’s long-awaited hydrogen strategy, released today, sets out how the gas could be used for up to 35% of UK energy consumption by 2050.
The UK’s hydrogen economy could be worth £ 900 million by 2030 and up to £ 13 billion by 2050, according to the Department of Business, Energy and Industrial Strategy (BEIS).
Hydrogen could play an “important role” in decarbonizing energy-intensive industries, including those that use trucks, by the end of this decade.
The new funding includes £ 55 million to help develop and test solutions to help industries switch to low carbon fuels such as hydrogen through an industrial fuel switch competition.
It will also include £ 40 million in grants to develop low-carbon alternatives to red diesel, which is primarily used in heavy vehicles like bulldozers and which produces nearly 14 million tons of carbon each year.
Additional funding from a £ 10 million Industrial Energy Efficiency Accelerator will be offered to clean technology developers to work with industrial sites to install, test and test solutions to reduce energy and resource use in UK industry.
The government is also advising on the design of the previously announced Net Zero Hydrogen Fund of € 240 million.
Economy Minister Kwasi Kwarteng said the release of the strategy “marks the beginning of the British hydrogen revolution”.
“This indigenous source of clean energy has the potential to change the way we energize our lives and will be essential to tackling climate change and achieving net zero.
“With the potential to provide a third of the UK’s energy in the future, our strategy positions the UK first in the global race to expand hydrogen technology and capture the thousands of jobs and private investments that go with it.”
Building Minister Anne-Marie Trevelyan said the strategy is a strong global signal that Britain is committed to hydrogen as an alternative to fossil fuels.
She said a thriving hydrogen economy could create hundreds of thousands of high quality green jobs, help millions of households transition to green energy, help key industrial areas move away from fossil fuels, and make significant investments.
The government is proposing to support the growth of the hydrogen economy through a funding mechanism based on one already used to promote the construction of offshore wind farms.
Hydrogen producers would receive payments that make up the difference between their cost and the price they want to sell at, protecting them from volatile wholesale prices.
However, Ground Source Heat Pump Association Chair Laura Bishop said that while she welcomed the ambitions to develop a UK hydrogen economy, she doubted the plan would be feasible in the given timeframe.
“Heating people’s homes with green hydrogen is certainly an option, albeit a costly one, but very optimistic given the short timeframe we have to tackle net zero and the climate emergency,” she said.
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John Mullen, Director of Ramboll’s UK Energy Market, also expressed doubts about ministers’ claims that hydrogen could account for more than a third of UK energy consumption by 2050, suggesting 5 to 10% is more likely.
And Mullen criticized the plan for supporting blue hydrogen, a form of the gas that produces carbon in production that would need to be captured and buried.
He said, “Blue hydrogen and carbon capture are incredibly inefficient processes right now and the only justification for using them is to facilitate the transition to a green hydrogen world.
“Blue hydrogen could be used to support business cases to implement a new hydrogen infrastructure; However, the government must limit the greenhouse gases produced and set a deadline for ending all blue hydrogen production in the next 10 to 15 years. “
The hydrogen strategy is one of a series of strategies published by the UK government in the run-up to the COP26 UN climate summit in Glasgow in November.
An industrial decarbonization strategy, a transport decarbonization strategy and a North Sea transition agreement have already been published, while the government has confirmed that its heat and buildings and net zero strategies will be published later this year.