Scotland has a £25B hydrogen plan

In order to make Scotland a global leader in the production of hydrogen, ministers have devised a strategy that they claim could generate up to £25 billion annually and create more than 300,000 employees.

The plan, which was released yesterday, outlines the steps they would take to help achieve the goal of producing 5 Gigawatts, or about a sixth, of the nation’s electricity needs from hydrogen by 2030.

The Scottish Government wants the country to be net zero by 2045, therefore another objective is to produce 25 Gigawatts of hydrogen by that year.

According to ministers, if the second goal is accomplished, the Scottish economy could gain £5 billion to £25 billion annually, protecting or generating 70,000 to more than 300,000 jobs.

“Hydrogen could give Scotland’s largest industrial potential since oil and gas were discovered in the North Sea,” said Michael Matheson, Secretary for Net Zero and Energy.

“The technology has great promise to support our transition to net zero while realizing significant economic benefits for our energy sector.

“While other countries are looking outside their boundaries for countries that can create and provide hydrogen at scale, Scotland has tremendous natural resources that we can use to become global leaders in renewable hydrogen production and export.

“Our Hydrogen Action Plan underscores the Scottish Government’s unwavering commitment to supporting the expansion and prosperity of our hydrogen sector. To fully realize the advantages of hydrogen, we are willing to work with partners from around the globe.

The Scottish Government is supporting the proposal with £100 million in funding for new initiatives in the industry, including a £90 million Green Hydrogen Fund that will launch at the start of next year.

According to ministers, Scotland has the talent, the workforce, and the will to dominate the global market for green hydrogen.

However, a report released in June of this year by the environmental group Friends of the Earth Scotland was more dubious. It was discovered that while producing hydrogen requires “vast amounts” of renewable energy, it is less efficient than other sources, such as electrification.

It further emphasized that heat pumps outperform hydrogen boilers by a margin of 168% to 342%.

Mr. Matheson stated in the Hydrogen Action Plan that hydrogen might be employed in sectors of the economy that are challenging to electrify.

“Electrification will do the heavy lifting in our march towards net zero,” he declared. “But there are parts of our economy and energy system that are very difficult to electrify. Hydrogen could provide a solution for sectors like heavy-duty on and off-road transport, shipping, aviation, and industrial high-temperature heat.

“Scotland has a wealth of renewable energy resources,” he continued. We have a potential pipeline of more than 40 GW of offshore wind generation projects, subject to decisions on planning and permitting as well as finding a route to market.

This might make it possible to produce low-cost, renewable hydrogen using extra electrons. Our country now has the potential to become a major producer and exporter of renewable hydrogen thanks to this generating capacity.

With Germany, the EU, and the UK Government all raising their respective hydrogen production targets in 2022, there is an increase in the demand for hydrogen on a global scale. Nations that can create and supply hydrogen on a large scale are now being sought after by those that require it.

The development of a hydrogen economy in Scotland could result in between 70,000 and over 300,000 jobs being protected or created, with potential Gross Value Added (GVA) impacts of between £5 billion and £25 billion a year by 2045 depending on the scale of production and the extent of exports, according to Mr. Matheson’s statement on the sector’s potential economic impact.