A new UK and German agreement
could accelerate the development of an international hydrogen industry, with
the two countries at the cutting edge of its development. Germany has requested
the UK to consider the construction of a 400-mile hydrogen pipeline under the
North Sea to provide it with hydrogen as Europe’s largest economy searches for
ways to break its dependence on fossil fuels.
A Joint UK and German Declaration of Intent was signed on 26 September 2023 that will see the two countries work together to underpin the
international trade in hydrogen. They will also accelerate the use of hydrogen
within their respective energy strategies, leading the world in understanding
how to expand new, net zero-friendly markets.
Both countries are committed to
advancing groundbreaking renewable hydrogen technologies to support increased
jobs through low-carbon investments. The collaboration follows significant
investment by both countries in developing hydrogen as an alternative fuel.
In the UK, the government supports
new low-carbon hydrogen production with capital from the revenue support within
its Hydrogen Production Business Model and a Net Zero Hydrogen Fund of £240M.
The German government supports
implementing the National Hydrogen Strategy with funding from their Climate and
Transformation Fund to emphasise the ramp-up of a hydrogen market.
The signing of the declaration will
lead the two countries to jointly develop the European and international
markets for hydrogen, not just involving the trading of hydrogen but also its
derivatives allied with increased cooperation on technologies and innovation in
hydrogen use, to the benefit of Germany and the UK.
Hydrogen is of the highest
importance for Europe to meet its goals regarding carbon emissions reduction.
The declaration emphasises five pillars of collaboration that were agreed upon
by both countries:
- Accelerating the deployment of hydrogen for
industry and consumers.
- Establishing leadership to develop hydrogen
markets and safety regulations.
- Research and innovation in the use of
hydrogen, from production to end-user.
- Promoting trade for hydrogen, plus related
goods, technologies, and services.
- Market analysis to support planning and
investment in hydrogen use.
The collaboration aims to make
hydrogen technologies cheaper and more accessible, intending to lower consumer
energy costs. The collaborative agreement will assist the UK and Germany in
reaching their goals of net zero emissions by 2050 and secure a reliable energy
supply for economic and energy security purposes, recognising the shifting
geopolitical landscape.
In
Germany, the country’s climate strategy strongly emphasises using hydrogen fuel
as it grapples with decarbonising its vast industrial sector, including
processes that do not lend themselves to electrification. The Russian invasion
of Ukraine has also raised new questions about energy security and reliance on
gas from the east.
The proposals for a hydrogen
pipeline from the UK are at an early stage, with ideas under consideration,
including a direct route under the North Sea to Germany or via Norway. The
German government is keen to move to a feasibility study for the project.
At the same time, the UK's
Department for Energy Security and Net Zero states that it is eager to become a
hydrogen exporter and wants to understand the options available better.
Under the economic model
envisaged, the UK would harness its vast offshore wind reserves to make the
hydrogen and then pump the product under the North Sea to fuel the industry of
its continental neighbour. With current technology, sectors like steelmaking,
chemicals, and cement are challenging to electrify at scale.
Germany is betting on hydrogen to
do much of the heavy lifting. Germany and Norway have already agreed to build
such a pipeline by 2030, a study for which is being considered a blueprint for
work on a UK link.
With its vast potential to
generate green electricity through offshore wind, Scotland could be a significant
beneficiary of the plan. It is a potential site for the UK end of the pipeline.
In October, the Scottish government allocated £200K in funding to the Net Zero
Technology Centre in Aberdeen for a study investigating the feasibility of an
export route from Scotland to Germany.
The centre estimates that a
new-build hydrogen pipeline would cost £2.7B, meet 10% of European hydrogen
import demand, and could be online by the mid-2030s.
The natural gas industry is
increasingly promoting hydrogen as a promising path to preserve its business
model while meeting demands to cut emissions, which emit no greenhouse gas
(GHG) emissions when burned. The trend is accelerating, with more than 25 hydrogen
development projects proposed since 2020.
The natural gas industry's vision
is to blend hydrogen with natural gas, utilising existing pipe networks before
switching entirely to hydrogen or combining it with other low zero-carbon
fuels. However, there are complications, as using hydrogen in domestic and
industrial buildings is fraught with logistical, economic, and safety concerns.
While the natural gas industry
generally passes fuel costs on to its customers, it profits by investing in
infrastructure to entice private investors to invest their financial resources
to provide the funds for the capital required to support a decarbonisation
strategy centred around maintaining, retrofitting, and building new pipelines
to increase hydrogen use, thus making these companies more valuable.
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