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Hydrogen Sector

Volume 808: debated on Monday 30 November 2020


Asked by

To ask Her Majesty’s Government what measures they are taking to support private investment in the hydrogen sector in the United Kingdom.

My Lords, we have announced that, working with industry, the Government are aiming for 5 gigawatts of low-carbon hydrogen production capacity in the UK by 2030—a clear signal of intent. We will support this through a whole range of measures seeking to stimulate private investment, including a £240 million net zero hydrogen fund and provision of a revenue mechanism to be delivered by hydrogen business models on which we will bring forward details early next year.

My Lords, I had the great pleasure of coming to Parliament this morning in very beautiful, absolutely silent hydrogen-powered car. I assure noble Lords that the hydrogen economy is well and truly with us. UK-made, world-first hydrogen boilers, fuel cells, buses, planes, ships and trains all exist—and, importantly, they are safe—and are in use and supporting UK jobs. With hydrogen as point 2 in the Prime Minister’s 10-point plan, can the Minister say a bit more about what action the Government are taking now to bring forward policies to unlock the £3 billion of shovel-ready private investment for UK hydrogen projects?

The noble Baroness is right to point out the positive moves that the whole country, the industry and the Government are making in this area. The UK is ideally positioned to benefit from the potential of low-carbon hydrogen, which could unlock up to 100,000 domestic and export jobs by 2050. We have set out a clear ambition and are developing a strong policy package to support it, including the £240 million that I have mentioned, which will speed up deployment of low-carbon production as well as hydrogen business models and the revenue mechanism behind them. It is these initiatives that will stimulate the billions of pounds of private investment that the noble Baroness referred to.

My Lords, given that the Hydrogen Taskforce estimates that the UK hydrogen economy can create and sustain 75,000 jobs—I note that the Minister mentioned 100,000 jobs just now—what new training programmes are being developed to ensure that there are sufficient highly-qualified people to take these jobs?

I cannot answer that question in specific terms. All I can say is that the money being invested in apprenticeship programmes across industry will help to develop that. If I can get some further information for the noble Baroness, I will write to her with more details.

Does the Minister recognise that leaving it to the market alone to choose between blue and green hydrogen will not deliver the step change in production that is required? Will the Government now set a specific target for the UK’s green hydrogen capacity by 2030, as many countries across the world have already done, in order to stimulate private sector investment, drive down costs and deliver on the Government’s overall net-zero target?

I think I have answered the bit of the noble Lord’s question about what we are doing to stimulate private investment. The Government are reluctant to set targets for the split between blue and green hydrogen, in case that limits the investment in either side; we need both in order to reach zero carbon. The 10-point plan has set out a clear ambition for new low-carbon hydrogen and the UK is ideally placed to bring forward both blue and green hydrogen production methods to grow a strong, resilient UK hydrogen economy. This twin-track approach will enable production to be brought forward at the necessary scale during the 2020s. The noble Lord will be aware of the Gas Goes Green initiative, which will promote and advance the use of green gases such as hydrogen and biomethane in the gas grid.

My Lords, I refer the House to my entry in the register. While I very much welcome the Prime Minister’s 10-point plan for a green industrial revolution, is my noble friend aware that the accelerating shift to electric vehicles is being interpreted by many as an outright ban on the internal combustion engine? This is concerning. Is it, in fact, Her Majesty’s Government’s intention to ban the internal combustion engine? Is my noble friend aware that the internal combustion engine can be operated very efficiently with zero-carbon, green hydrogen, and thus contribute to zero emissions? Fossil fuels are the enemy, not the internal combustion engine.

My noble friend speaks with great authority on this point. He is right that various modes of transport are already able to use hydrogen fuel cells to provide zero emissions at the tail-pipe. He will be aware of hydrogen pumps sited alongside petrol pumps at some service stations already. However, while hydrogen can also be combusted in internal combustion engines without greenhouse gas emissions, it does produce nitric oxide, so would not count as zero emission. My noble friend can be reassured that the Government’s intention is to phase out new petrol and diesel cars by 2030 and for all new cars and vans to be zero emission at the tail-pipe by 2035. Every effort is being made to support innovation and scale-up of low-carbon hydrogen across the value chain.

I draw the attention of noble Lords to my entry in the register. There remain significant technical risks with the use of hydrogen. For example, capture rates of carbon capture and storage technology used in the production of hydrogen could result in high residual carbon emissions. Therefore, does the Minister agree that mature, low-carbon heating technologies, for example heat networks and heat pumps, should be deployed at a rate commensurate with the 2050 target, in case hydrogen does not prove viable at scale?

I do agree with the noble Lord. He is right that proving the safety case through rigorous testing and trials is critical to the success of any new technology or fuel source. That is why the 10-point plan sets out plans for a series of incremental trials, potentially leading up to a hydrogen village by the end of this decade. Alongside this, it also sets out plans to implement the future home standard in the shortest possible time, so that new buildings can have high levels of energy efficiency and low-carbon heating, including the aim for 600,000 heat pump installations per year by 2028. The truth is that we need all these technologies to be developed at scale.

Last week’s announcement of the scattergun 10-point plan as a global template for delivering net-zero emissions, amounting to only £500 million for low-carbon hydrogen production by 2030, contrasts with the €7 billion hydrogen investment announced by the German Government. What kind of hydrogen, and the split, will this involve? The key issue is to create a UK hydrogen gas production and supply network, utilising excess wind power at times of low demand to produce green hydrogen energy-dense power. When might the Government have answers to these real questions?

The ambitious figures propounded by other EU countries which the noble Lord mentioned often have no actual policy underpinning. The point of the 10-point plan, and of the hydrogen strategy that will be announced in January, is to add some meat to the bones of these initiatives. The UK has already committed £240 million, and some of these carbon capture and storage and hydrogen manufacturing plants will indeed be sited near green energy sources such as offshore wind.

My Lords, the UK has the opportunity to become a true world leader in the manufacture of hydrogen buses. Last week, the Chancellor committed to purchase 800 zero-carbon buses. How many of these will be hydrogen? Can the Minister tell the House when funding will be made available for the rest of the 4,000 UK-made buses that the Government promised last February?

My Lords, the noble Baroness is right to point out the progress that we have made on buses. The Government have supported the use of a range of low-carbon bus technologies, including the deployment of 62 hydrogen buses and supporting infrastructure. Our £23 million hydrogen for transport programme is increasing the uptake of other fuel cell electric vehicles and growing the number of publicly accessible hydrogen refuelling stations. We have also been supporting public and private sector fleets to become early adopters, through the £2 million fuel cell electric vehicle fleet support scheme. This initiative is very important to the Government in trying to provide a number of different strategies and support mechanisms, not just financial ones.

My Lords, I welcome the reference to hydrogen in last week’s 10-point plan. The Minister will be aware that the energy sector has a long track record in Gwynedd and Ynys Môn. Can she give some indication of how the 10-point plan will help the many relevant industries in Wales play their part in supporting the UK’s commitment on net zero?

I reassure the noble Lord that great interest and activity have already been shown across Wales in low-carbon hydrogen production and use, from research all the way through to application. Low-carbon hydrogen could play a key role in decarbonising heavy industry, particularly in Wales. I know that this is being actively looked at through the Welsh Hydrogen Reference Group. I point the noble Lord particularly towards the net-zero hydrogen fund, which will provide £240 million of capital support alongside industry investment to increase low-carbon hydrogen production right across the four nations of the United Kingdom.