Scotland outlines hydrogen policy to 2045

Author: Jake Stones

2020/12/22

LONDON (ICIS)--On 21 December the Scottish government released a hydrogen policy statement, with plans on how to incorporate the fuel for use in heating, transportation and industry.

The inclusion of heat is important as it shows that Scotland aims to use gas-based rather than power-based heating systems in future – something most mainland European countries are moving away from.

Hydrogen as a back-up fuel source for power generation was also mentioned.

The inclusion of heating, transport and industry is key to Scotland’s decarbonisation plans. The country aims to reduce annual emissions by 75% from 1990 levels by 2030, and be completely carbon neutral by 2045 – five years ahead of the UK government target.

Scotland’s power generation is already predominantly low-carbon, with 83% of coming from renewable sources in 2018, according to the hydrogen policy statement.

BLUE OR GREEN?

The policy statement confirms that Scotland will be adopting both blue and green hydrogen going forward.

This is because Scotland has a wealth of renewable energy potential, aiming to have 11GW of installed offshore wind capacity by 2030. This means it will be readily able to generate significant quantities of green hydrogen.

In addition, the policy statement notes Scotland’s potential for tidal power generation, outlining that the country has an estimated third of the UK’s tidal stream resources and two-thirds of wave resources.

Scotland is already home to a major blue hydrogen project, Project Acorn, which is located at St Fergus.

This plant will generate blue hydrogen from UK continental shelf (UKCS) and Norwegian imports, converting natural gas to hydrogen before it enters into the UK gird.

In 2019 13.36 billion cubic metres (bcm) of the UKCS production beached at St Fergus, around 36% of UK output.

The UK Oil and Gas Authority outlined that the UKCS can sustain production for another 20 years or more.

FUTURE EXPORT AND TRADE

The devolved Scottish administration supports the UK government’s recently released plan for the green industrial revolution, which also specifies 5GW of low-carbon hydrogen production capacity by 2030.

Further along, the Scottish government aims to work with the UK government to create business models, market mechanisms and carbon pricing.

A key component to the Scottish plan is its clear identification of export potential.

The policy statement notes the potential to build a pipeline for hydrogen export, connecting the country to mainland Europe by the 2040s.

According to the policy statement, Scotland will be able to contribute a substantial amount of hydrogen for export by 2045. The policy document outlines production potential for 126TWh/year of renewable hydrogen, of which 94TWh will be produced for export.

The Scottish government will release its Hydrogen Action plan in 2021, which will specify key points for developing production.

PRODUCTION CAPACITY

The plan targets 5GW of hydrogen production capacity by 2030 and 25GW by 2045.

The latter target is a rarely seen reach beyond 2030, with Germany one of the few EU countries to specify 5GW of new production capacity between 2035-2040.

There remains an uncertainty about how much of Scotland’s capacity will be dedicated to green or blue hydrogen.

To support the production of hydrogen, the Scottish government has outlined £100m for research, innovation and development between 2021-2026.