Focusing on the key question of the transitional role of hydrogen blending, Regen’s response to the UK government’s consultation argues that limited and temporary blending could be used to provide an off-taker of last resort to address the issue of hydrogen demand risk and thereby encourage hydrogen production investment. However, blending is likely to be more complex and costly than currently assumed and may not be available at all locations and times without some risk of injection curtailment.
There may be better options available that would entail less regret cost and would be aligned with the long-term development of the UK hydrogen value chain. This would include providing more support and policy intervention to:
- Develop higher value demand applications within industrial clusters and in strategic industries that are most likely to require hydrogen in the future.
- Build more hydrogen storage to address both supply and demand balancing risks.
- Accelerate the use of hydrogen for power generation and long duration system balancing by supporting the conversion of existing generation plants to run on a fuel blend as well as new hybrid or 100% H2 turbines that are coming to market.
- Establish a low carbon hydrogen offtake obligation for users of grey hydrogen to use low carbon hydrogen if it is available.
- All of the above.
If you would like to learn more about Regen’s insights and analysis on the hydrogen sector, please contact Johnny Gowdy, Director, at jgowdy@regen.co.uk.