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Government Commits £70m to Hydrogen Production

Boiler Guide Team
By: Boiler Guide Team
Updated: 21st July 2021

The Department for Business, Energy and Industrial Strategy (BEIS) has committed £90m of investment into renewable energy innovation and development with £70m of that fund allocated to hydrogen production.

Why is this announcement important?

The UK has an ambitious target of reaching net-zero carbon emissions by 2050 and to do this we need to find alternative sources of fuel to replace fossil fuels like natural gas, coal and oil. The Committee on Climate Change (CCC) has been advising the government on how best to decarbonise our energy and heating production with several possible routes, but the government has been slow to commit to a strategy.

This new announcement from the BEIS signals very clearly that the government is finally embracing hydrogen as an important source of clean energy for both heating and industry in the UK. The remaining £20m will be funding several different small-scale renewable energy projects. In total, a £500m innovation fund has been introduced by BEIS to better tackle factors influencing climate change.

The funding will be used to build two new hydrogen production plants which will provide 200,000 homes with clean heating energy. The first hydrogen production plant will be built on the banks of the River Mersey with the second planned for Aberdeen in Scotland. The £70m will also be used to develop technology which will harness offshore wind energy from off the Grimsby coast to power electrolysis in order to produce hydrogen.

Why produce hydrogen?

At the moment 84% of UK homes are heated by boilers which are fueled by the natural gas grid with the rest being heated with oil, LPG or electric heating systems. When we burn natural gas, carbon (a greenhouse gas) is emitted which is contributing to the planet's rising temperature.

Replacing natural gas with hydrogen could be an effective solution as hydrogen does not emit carbon when burnt and it would mean that we can keep much of the existing grid and boiler units in situ. This will minimise cost and upheaval as rather than replacing all of the UK's gas boilers with renewable heating such as heat pumps, we could change the gas they use instead. Hydrogen could be blended with the natural gas in the grid at a steadily increasing ratio, gradually moving to 100% hydrogen as production capacity and storage increases.

One of the obstacles in the way of a hydrogen grid is that the process of producing hydrogen emits carbon, so it is essential that we find a sustainable production method and/or a way of capturing the carbon before it enters the atmosphere.

For more information on hydrogen as a heating fuel, visit our article Is Switching to a Hydrogen Gas Grid a Viable Option?

Other renewable energy projects

While the majority of the fund is being focused on hydrogen production, £20m has been allocated to fund 10 innovation projects which will be more community-based to help local residents to reduce their energy usage and reduce carbon emissions. The BEIS estimates that 250,000 people could have their homes powered by local renewable energy as a result of the proposed projects. Projects include:

Demolishing a coal-fired power plant in Rugely, Staffordshire, to create a 2,300 home 'sustainable village' of properties using thermal storage units instead of traditional gas boilers. This would be done by technology which provides geothermal energy from nearby canals and disused mineshafts that can be stored and used to heat homes.
Creating a wind-powered micro-grid in Coleraine in Northern Ireland to power 100 homes.

Kwasi Kwarteng, Business, Energy and Clean Growth Minister, said:

"Cleaning up emissions from industry and housing is a big challenge but today's £90 million investment will set us on the right path as we develop clean technologies like hydrogen."

"This is an important part of our world-leading efforts in eliminating our contribution to climate change by 2050 while also growing our economy, creating up to 2 million green collar jobs across the country by 2030."

Boiler Guide Team

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Boiler Guide Team

Boiler Guide has been home to a host of heating experts who have helped millions of UK homeowners searching for advice and guidance. If you’ve got heating questions, we’ll have the answers.

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