Chasing Zero
Energy Transition
1 May 2024
Insight
What's the aim of the Hydrogen Energy Association (HEA) and what are the challenges you hope to address?
Our overall mission is growing the hydrogen sector in the UK. One pillar beneath that is promoting our members in the sector, in the UK and overseas. The other aspect is helping ensure we have the right policies. We have over 120 members. It's a crowded space now, so a couple of years ago we set up the Hydrogen Coordination Forum, which brings together half a dozen national bodies with hydrogen-related interests, like Energy UK and RenewableUK. There's also a growing number of regional bodies, particularly where there is an industrial cluster. It's a powerful group for looking at where we can come together and have a louder voice with government but also share among ourselves.
We're active across the whole hydrogen value chain as our membership reflects that. One of our key themes for this year is how we extend the conversation beyond the industry. Hydrogen touches many areas – transport, power, heat, renewables, transitioning from fossil fuels – so there are many companies hydrogen could be relevant for but they don't know it. For industrials, fleet operators and investors, it's relevant.
Where are we now in developing a global hydrogen market?
Government and the Department for Energy Security and Net Zero have worked hard to get some foundations in place for low-carbon hydrogen production. It's complicated but we can see the reasons why things are put in place. There are things we're having conversations around with government because we feel they're not quite right for what we need. But it's a comprehensive approach and industry knows what it needs to do.
The areas we now need to look at are offtake and demand. There was a view of 'build it and they will come', which hasn't quite worked out. It's all about cost and risk. When you have funding streams that require offtakers to sign up to multi-year contracts, that is scary when we don't know how the price of hydrogen will evolve. How we de-risk on the demand side will be increasingly important.
There is a supply chain and skills piece. We want the UK industry growing and providing solutions for the UK and exporting. Looking at how we can anchor manufacturing and underpin key technologies with companies in the UK is important. Rooting a supply chain in the UK would be very powerful.
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Getting hydrogen production cost down is key. That makes everything else easier in terms of demand, supply chains and infrastructure.
Celia Greaves
Chief Executive, Hydrogen Energy Association
Celia Greaves
Chief Executive, Hydrogen Energy Association
Do you see a consensus in hydrogen's role in the energy transition or is that still being established?
We would never say hydrogen is the silver bullet. A decarbonised future will involve an array of different technologies. Hydrogen plays its part best when it is delivering over and above the alternatives. Hard-to-abate areas like industry it has a role, we think transport too – HGVs, aviation. Once we start to ramp this up and get scale up and cost down, that opens doors. As hydrogen becomes more available and cheaper, that will provide more opportunities for use. It won't be the answer to everything, but it will have a substantial role to play.
What would you like to see develop at a policy level in the UK?
The support has been good as a starting phase. However, sometimes more recently the high-level political commitment has been less clear with pushback from government about certain elements of the green agenda. With hydrogen, it's not just about decarbonisation – it's about energy resilience and clean growth. Having ongoing political signals from government that it's still enthusiastic at the highest level is important.
What do you make of existing UK Government support for the hydrogen industry?
The Green Industries Growth Accelerator Initiative [a government fund announced last year to support clean energy supply chains] could be helpful in terms of capex funding to develop manufacturing. There are issues with that, it's over a five-year period so once you've split it up over the target sectors and five-year period you’ve gone from £1.1 billion to a much smaller fraction of that. How that plays out in terms of impact given the level of funding is something to consider.
We'd like to see targets. In Europe, they have targets for replacing grey hydrogen with low-carbon equivalents. They also have targets on the hydrogen mobility side. Some of those things with policy frameworks around them would be helpful. It's been encouraging to see the work on transportation and storage, although we need to accelerate progress. Obviously, we can't have production and use if we don't connect them.
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It's different to previous transitions where timeframes were longer. We don't have the luxury of defining regulatory frameworks and then putting projects down over years – we're trying to do it all at once.
Celia Greaves
Chief Executive, Hydrogen Energy Association
Are there projects which stand out as particularly significant?
I'd point to our projects map. We published the first free access hydrogen projects map here in the UK. The thing that is encouraging is the number of projects and we expect these to grow as the map is regularly revised. All projects are either post-feed or in receipt of government funding, and we have coverage across the hydrogen value chain.
HEA brings together a wide network of industry stakeholders. Based on these interactions, what are the common hurdles in project development?
Many hurdles are because a lot of our members are at the vanguard of this space, and we're in a different situation to previous transitions where the timeframes were longer. This time it's all at triple speed. We don't have the luxury of defining regulatory frameworks and then putting projects down over months or years – we're trying to do it all at once. There are bottlenecks associated with that. Planning is a prime example. It takes a long time and the requirements for hydrogen are complex. We're seeing similar things in terms of regulations, where frameworks, requirements and training are struggling to keep up. Our work is about teasing those things apart and getting them out the way.
Is there a single development that would give you the most confidence in hydrogen prospects?
Getting hydrogen production cost down is key. That makes everything else easier in terms of demand, supply chains and infrastructure. Some of that might be about innovation, some about economies of scale and getting projects up and running.
What are you expecting for hydrogen in the next three years?
We've been talking for years about a whole system approach. There's been an increased recognition that you can’t consider hydrogen in isolation, you need to look at how it interfaces with the wider energy system. What happens with electrification is also important for hydrogen. If we build new electrical grids that also impacts what we can do with electrolysers. We need to be on top of all of it.
I'd like to see significant progress on the demand side, the supply chain and the skills. If we can get those sorted while maintaining momentum on transportation and storage, that'd be very significant.
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