Market analytics firm, Aurora Energy Research, has published a report highlighting the role of hydrogen as a key enabler to the decarbonisation of our energy system.

In order for the UK to meet its challenging Net Zero targets, hydrogen must be explored as a vital tool in reducing emissions across all sectors with direct applications in heat, transport and industry.

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The report Hydrogen for a Net Zero GB: An integrated energy market perspective builds on an analytical framework that integrates the entire market-based energy system and includes different types of production, transportation and storage technologies.

The report provides a wide range of plausible Net Zero market outcomes by assessing various scenarios and sensitivities, reflecting alternative pathways for low-carbon power and hydrogen adoption.

Report findings include:

  • Hydrogen could meet up to half of the UK’s final energy demand by 2050, providing a total of more than 500TWh of hydrogen demand in a high adoption scenario.
  • The scale of hydrogen demand across the economy is an important factor that will shape the relative share of blue and green hydrogen.
  • Widespread adoption could mean the deployment of up to 14 million hydrogen boilers and more than 75% hydrogen penetration in heavy-goods vehicles.
  • The relative share of green and blue hydrogen will also depend on the availability of cheap power. Deployment of green hydrogen will be driven by the amount of surplus low-carbon generation and cheap power available for electrolysis, which will depend on the policy direction and other developments in the power sector.
  • All Net Zero scenarios require substantial growth in low-carbon generation such as renewables and nuclear, and electrification upon which hydrogen benefits are complementary in challenging sectors.
  • Falling technology costs and gas prices will drive a steady reduction in the market hydrogen price.
  • Hydrogen storage in salt caverns can provide security of hydrogen supply in most years, but additional strategic reserve capacity of up to 7GW will be required to ensure system adequacy during extended scarcity periods.
  • All Net Zero scenarios require intensive policy development and investment across all energy sectors, which amounts to over £450 billion in net present value terms.
  • A hydrogen pathway could boost the UK’s industrial competitiveness, with economic benefits in areas where there are fewer economic opportunities.

Click here to download the full report

Finally, the report identifies multiple policy options to anticipate challenges and tackle key uncertainties in the short term, including setting decarbonisation targets and promoting hydrogen demand in key sectors, deploying CCS in strategic locations and advancing energy efficiency and network standardisation efforts. In the medium and long term, policy focus would need to shift to harmonising markets and accelerating cost reductions.

Felix Chow-Kambitsch, Head of Commissioned Projects – Western Europe at Aurora Energy Research, commented: “Stimulating the development of hydrogen infrastructure in the UK could facilitate the low-carbon energy transition as part of the UK’s efforts to hit its Net Zero target and unlock opportunities across UK industry and transport. Hydrogen could eventually meet up to 50% of total energy needs – across power, heating, industry and transport.

“The accelerated deployment of low-carbon power generation will enable utilities to create hydrogen from surplus power, while carbon capture technology enables the decarbonisation of natural gas and provides the required scale to the hydrogen sector. Unlocking the benefits of a hydrogen economy will require early support from Government, systematic changes to our energy system and significant investment by the private sector,” concludes Chow-Kambitsch.