As the curtain rises on 2024, the UK’s hydrogen industry finds itself at a crucial juncture, poised on the precipice of either becoming a global leader in clean energy or facing challenges that could reshape its trajectory.
With the international hydrogen arena becoming increasingly competitive, the UK must prove the viability of its hydrogen sector against the backdrop of advancing electrification options.
In the past two years, both the United States and the European Union have unveiled ambitious plans to catalyze their hydrogen industries. US President Joe Biden, in a landmark move in 2022, allocated a substantial $750 billion for green energy initiatives, including tax credits aimed at bolstering clean hydrogen production. Across the Atlantic, the EU introduced its REPowerEU scheme, featuring €800 million for a European Hydrogen Bank.
In response to global initiatives, the UK government announced a £2 billion investment across 11 green hydrogen schemes in its first Hydrogen Allocation Round (HAR-1) in mid-December. This move, albeit comparatively modest, is projected to create over 125MW of capacity and 700 jobs, fostering what the Department for Energy Security and Net Zero envisions as a “world-leading hydrogen industry.”
Reflecting on the past year, Hydrogen UK CEO Clare Jackson acknowledges significant advancements in legislative and policy measures in 2023. Notably, the Green Industries Growth Accelerator (GIGA) plan, Hydrogen Allocation Round (HAR-1), and other strategic announcements position the UK as a potential global hydrogen superpower.
However, Jackson emphasizes the critical nature of decisions to be made in 2024. The next 12 months, she asserts, will set the trajectory for the hydrogen industry for the next decade. The stakes are high, and the industry must navigate challenges to solidify its role in the net-zero transition.
Joyce Grigorey, Director of Hydrogen at Westwood, highlights HAR-1 funding as the most significant movement in the UK hydrogen market in 2023. Winning projects now have the certainty needed to kickstart their initiatives. Looking ahead, HAR-2 in 2024 is expected to allocate funding to hydrogen projects with a total capacity of 750MW, fostering project realization and unlocking private funding.
Scotland emerges as a key player, with its North Sea location and renewable energy projects forming a crucial foundation for the UK hydrogen market. Offshore wind projects could provide additional flexibility, especially in managing excess electricity in the grid. The upcoming general election adds a layer of anticipation, with expectations that political nuances could shape the final decisions around hydrogen applications.
As the hydrogen industry in the UK stands at the cusp of a transformative year, the challenge is not merely about utilizing hydrogen but about leading in its development and export. The next 12 months will determine whether the UK emerges as a global leader in the hydrogen revolution or a participant in the broader energy transition. The prize at stake is the opportunity to create technologies, jobs, and innovations that position the UK at the forefront of the global energy landscape. Boldness, innovation, and strategic decisions in 2024 will define the UK’s role in the evolving hydrogen highway.
