This October marked two years since the UK government announced its Net Zero Strategy: Build Back Greener, which followed only months after announcing its flagship Hydrogen Strategy in the summer of 2021.

The strategies laid out plans to secure 5 GW of low-carbon hydrogen production capacity by 2030 and a roadmap for the role of hydrogen in achieving net zero by 2050. The 5 GW target was then doubled in 2022 after some industry criticism that the original target was not ambitious enough, and so the UK currently has its sights set on being able to produce 10 GW of low-carbon hydrogen by the end of the decade.

However, as the initial fanfare of the introduction of a strategy for boosting the UK’s hydrogen sector has worn off, questions have increasingly emerged around how the government will actually deliver low-carbon hydrogen on the scale it has promised.

Securing financing for the infrastructure for hydrogen has been one of the key problems. For example, debt financing has been explored as an option for energy infrastructure, but projects often encounter difficulties in demonstrating that a final investment decision (FID) has been made. In turn, this stifles the project’s ability to move ahead, creating a Catch-22 that has seen the hydrogen sector struggle to truly lift off in the UK.

Nonetheless, hydrogen is firmly on the map in terms of sustainable energy sources that can have real practical uses. For example, the aviation industry has begun to consider the possibility of using hydrogen as direct fuel or in the production of hydrogen-derived e-fuels.

Similarly, in the shipping industry, technologies for hydrogen fuel cells and ammonia synthesis are in the development stage, as well as projects to demonstrate the feasibility of using hydrogen fuel cells to power cargo-handling equipment on ships themselves. 

Hydrogen certainly has a lot of potential for the energy transition, and there are some approaches to hydrogen infrastructure development that could prove effective in supporting the sector in line with the UK’s targets.

Making use of economic free zones 
Economic free zones are a well-established approach for attracting investment, as well as innovators and developers, and boosting the overall growth of a specific sector. This concept could be applied to hydrogen development.

Economic free zones work by identifying a suitable geographic area for development, and then introducing a specific package of legislation and economic benefits and incentives for businesses to operate within the zone. These can include tax break options for businesses, or credits for research and development costs to help encourage innovation and provide greater assurances to those financing developments.

Overall, economic free zones offer the potential to create a specifically designed and well-fitted eco-system around the hydrogen sector to support its growth and attract the scale of investment needed to see hydrogen play an increasingly important role in the transition to net zero.

Hydrogen certainly has a lot of potential for the energy transition, and there are some approaches to hydrogen infrastructure development that could prove effective in supporting the sector in line with the UK’s targets.

Hydrogen hubs 
In practical terms, the UK’s hydrogen sector could also benefit considerably from a ‘hub and spoke’ model of development, whereby economic free zones facilitate the clustering of hydrogen projects into a ‘hub’, and then wider national infrastructure planning creates routes for hydrogen to be distributed, such as pipelines to storage facilities or direct to ammonia production facilities, blending points or inlets to the national gas grid.

For example, within a hydrogen or renewable energy hub, green energy sources and solutions such as production, storage and power generation can be clustered in the same area. This clustering then sees businesses and individuals working in complementary sectors operating in close proximity, in turn fuelling greater cohesion and alignment in innovation and sustaining momentum for new solutions and technologies.

Successful creation of a hydrogen hub is reliant on access to a large and reliable volume of hydrogen, as well as proper planning to create infrastructure to transport it to demand centres and storage facilities. This is an especially pertinent factor given the challenges of transporting hydrogen. Transporting hydrogen frequently raises safety concerns given its flammability, and questions remain over the most cost-effective means of transporting the gas, whether by pipeline, conversion into ammonia, or using new liquefaction technologies.

When selecting appropriate sites to develop hydrogen hubs, it would be sensible to look at existing infrastructure, such as carbon capture and hydrogen production sites, that a hub could be developed around.

Overall, the success of UK’s plans for hydrogen remains highly dependent on attracting investment into hydrogen infrastructure development, and then executing this in an effective and workable way. Economic free zones and hubs provide a blueprint for how these can be achieved, and it now rests with the government to use them.

The views and opinions expressed in this article are strictly those of the author only and are not necessarily given or endorsed by or on behalf of the Energy Institute.