UK sees role for nuclear in hydrogen economy

The UK's first-ever Hydrogen Strategy drives forward the commitments laid out in Prime Minister Boris Johnson's ambitious 10 Point Plan - announced in November 2020 - for a green industrial revolution by setting the foundation for how the UK government will work with industry to meet its ambition for 5GW of low-carbon hydrogen production capacity by 2030. This level of hydrogen production could be equivalent to the amount of gas consumed by over 3 million households in the UK each year.

By 2030, the government says, hydrogen could play an important role in decarbonising polluting, energy-intensive industries like chemicals, oil refineries, power and heavy transport like shipping, trucks and trains, by helping these sectors move away from fossil fuels. By 2050, 20-35% of the UK's energy consumption could be hydrogen-based. It says hydrogen could be critical in meeting the UK's targets of a 78% reduction in emissions by 2035 and net zero emissions by 2050.

The Hydrogen Strategy outlines how the UK will rapidly and significantly scale up production and lay the foundations for a low-carbon hydrogen economy by 2030, as well as how government will support innovation and stimulate investment in the 2020s to scale up low-carbon hydrogen.

It outlines a "twin track" approach, supporting both "green" electrolytic and "blue" carbon capture-enabled hydrogen production, and commits to providing further detail in 2022 on the government's production strategy. The government says it will collaborate with industry to develop a UK standard for low-carbon hydrogen giving certainty to producers and users that the hydrogen the UK produces is consistent with net zero while supporting the deployment of hydrogen across the country.

The government will also undertake a review to support the development of the necessary network and storage infrastructure to underpin a thriving hydrogen sector. It says it will work with industry to assess the safety, technical feasibility and cost effectiveness of mixing 20% hydrogen into the existing gas supply. This, it says, could deliver a 7% emissions reduction on natural gas. The government will also launch a hydrogen sector development action plan in early-2022 setting out how it will support companies to secure supply chain opportunities, skills and jobs in hydrogen.

The Hydrogen Strategy also contains details on different ways to produce hydrogen and the government's technical cost projections of each technology up to 2050.

Role for nuclear

The Energy White Paper, published in December 2020, sets out how the UK will expand renewable generation while decarbonising power sector emissions further, including through its ambition to quadruple offshore wind capacity to 40GW by 2030 and pursue new large-scale nuclear while investing in small-scale nuclear technologies. "This low-carbon electricity will be the primary route to decarbonisation for many parts the energy system, and will also support electrolytic production of hydrogen," the Hydrogen Strategy says.

"From the 2030s onwards, we may see a wider range of production technologies coming to the market including more hydrogen from nuclear, using low-carbon heat and power from small modular and advanced modular reactors, as well as bio-hydrogen with carbon capture, utilisation and storage that can deliver negative emissions," it adds. "A dynamic market will include multiple sources and end uses for hydrogen."

The UK government has also today launched a public consultation on a preferred hydrogen business model which - built on a similar premise to the offshore wind Contracts for Difference - is designed to overcome the cost gap between low-carbon hydrogen and fossil fuels, helping the costs of low-carbon alternatives to fall quickly. In addition, the government is consulting on the design of the GBP240 million Net Zero Hydrogen Fund, which aims to support the commercial deployment of new low carbon hydrogen production plants across the UK.

"We have developed the first ever UK Hydrogen Strategy to set out clearly the key steps we need to take in the coming months and years to deliver against the promise that hydrogen presents - an exciting moment for technology providers, energy companies large and small, investors, innovators, and government at all levels," said Business & Energy Secretary Kwasi Kwarteng in a foreword to the document.

Tom Greatrex, Chief Executive of the Nuclear Industry Association, welcomed the recognition by government of the important role nuclear will play.

"The Strategy confirms that nuclear reactors - large, small, current and advanced - have a critical role in producing low-carbon hydrogen," he said. "Nuclear is the only source of energy that can produce clean power and clean heat, making it a vital component as we decarbonise sectors beyond electricity.

"Whether labelled as 'green' or 'low-carbon', it's only hydrogen from zero emissions sources like nuclear and renewables that can make a meaningful long-term impact on decarbonisation. The government must now swiftly implement a new financing model for nuclear to cut costs, move forward with Sizewell C, and continue to support the development of modular reactors, to ensure nuclear is part of a strong low-carbon hydrogen mix."