The Scottish Government has published its Hydrogen Policy Statement. The hydrogen sector will receive GBP 100 million over the next 5 years to support a green recovery and Scotland’s just transition to net zero.
Scotland is set to become a leading hydrogen nation, with an ambition to generate 5 GW of renewable and low-carbon hydrogen by 2030 – enough to power the equivalent of 1.8 million homes.
Economic impact research suggests the industry has the potential to be worth up to GBP 25 billion a year to the Scottish economy by 2045.
Scotland’s Energy Minister Paul Wheelhouse says, “We are the first country in the UK to publish a Hydrogen Policy Statement that sets out how we can make the most of Scotland’s massive potential in this new sector. Hydrogen is rapidly emerging across the international community as a sustainable solution for the decarbonisation of the economy and a key element of the energy transition picture. Scotland is prepared to play its full part together with other European nations – that’s why we’re publishing this key policy statement today and investing GBP 100 million of Scottish Government resources to stimulate the sector and its supply chain.”
“Scotland has, in abundance, all the raw ingredients necessary for the production of low-cost hydrogen as well as one of the largest concentrations of offshore engineering expertise in the world that can harness Scotland’s renewable energy potential in technologies like wind, wave and tidal power, to produce green hydrogen. Indeed, Scotland is one of the best placed nations anywhere in the world to develop competitively priced hydrogen for our own economy’s needs and to generate a surplus in supply to export to other European nations with emerging demand, but insufficient supply to meet their own needs,” he continues.
“No one fuel or technology is, by itself, the solution to climate change, but hydrogen has the potential to be a very important part of a progressive, decarbonised energy system supporting our transition to net zero in transport, heating and industrial decarbonisation. We are committed to supporting this emerging sector to deliver a transformation in how we produce, store and utilise energy and to maximising the economic benefits that the production of hydrogen can bring,” Wheelhouse adds.
Chief Executive of the Scottish Hydrogen and Fuel Cell Association Nigel Holmes says, “We welcome this Hydrogen Policy statement which underlines the opportunity for Scotland to be the leading hydrogen nation and puts us on the right path to deliver net zero by 2045. This ambition builds on the experience and lessons learned with projects in Aberdeen, Fife, Orkney, and the Western Isles. Islands and ports will be hubs for energy innovation, bringing together large-scale renewables for green hydrogen production.”
“The identified capacity of 25 GW of electrolysis by 2045 will produce 126 TWh per year of green hydrogen across Scotland, with 32 TWh to deliver Scotland’s net zero target and 94 TWh of green hydrogen for export,” adds Holmes.
Green hydrogen opportunity
Xodus Group’s Scottish Offshore Wind to Green Hydrogen Opportunity Assessment was commissioned by the Scottish Government, Scottish Enterprise, Highlands and Islands Enterprise and a consortium of industrial partners led by EMEC.
Xodus conducted a supply chain survey and developed a database of Scottish companies active in the green hydrogen sector. Modelling three hydrogen demand projections and also the levelised cost of hydrogen production (LCoH), Xodus’ analysis supports a long-term outlook of price competitiveness by 2032 and highlights the potential to create significant high value jobs to enable production over the next decade.
Scott Hamilton, Renewables Division Manager at Xodus Group says, “The commitments set out in the Scottish Government’s Hydrogen Policy Statement send a clear vote of confidence in the potential of green hydrogen from offshore wind. We are pleased to have contributed through our assessment on the scale of the opportunity. It shows the potential to unlock a massive clean power generation resource, creating a clean fuel for Scottish industry and households and a valuable export commodity, supporting the supply chain and creating high value jobs. Green hydrogen will help abate the emissions of historically challenging sectors such as heating, transport and industry. Modelling three hydrogen demand projections and also the levelised cost of hydrogen production (LCoH), our analysis supports a long-term outlook of price competitiveness by 2032.”
Hamilton continues, “A decade of serious action is now required to realise the full potential and strategic investment in hydrogen transportation and storage will be essential to unlock the economic opportunity for Scotland. The supply chain is well positioned to support green hydrogen development, however gaps in the areas of design, manufacture and maintenance of hydrogen production, storage and transportation systems will need to be addressed. Today’s funding commitment provides a welcome catalyst for plugging the technology gaps. Support including apprenticeships and reskilling will be required to develop indigenous skills and capabilities in these areas.”
“As Scotland gets set to host COP26 next year, the latest hydrogen commitments demonstrate the world-leading position the country is taking on a net zero transition and enabling new sources of energy production,” says Hamilton.