Part 1 – Hydrogen Economy: Route Map to 2030 and 2045
The Hydrogen Economy Journey
Early 2020s (2021-23)
- 1-20MW scale electrolyser projects co-located with demand ( 2021-23)
- Scotland’s EETF and UK’s NZHF launched (early 2022)
- Continued use of hydrogen in transport trials and demonstrator projects
- UK Hydrogen business model finalised (2022)
- UK Low carbon hydrogen standard finalised (2022)
- UK Government’s decision on blending up to 20% hydrogen in the gas network (2022-23)
- Consortium established for hydrogen in Scottish transport
- Framework for a Scottish network of hydrogen multi-modal refuelling stations to support the adoption of hydrogen vehicles across all appropriate modes of transport.
- Crown Estate Scotland awards 10GW of ScotWind projects in 2022 - a potential catalyst for hydrogen production as many applicants have outlined their intention to incorporate aspects of hydrogen production into their development plans Scotland’s first Hydrogen Energy Hub is operational: Aberdeen Hydrogen Hub (2023)
- H100 Fife –world first 100% hydrogen gas network operational
- MoU agreements with international partners secured to support information sharing on hydrogen technologies, production and explore the foundations for possible export markets
- 2021 commence industry/public sector funded studies exploring hydrogen export opportunities between Scotland and German regions.
- Explore the use of hydrogen to assist the integration of renewables on the grid and address the issues of intermittency and explore the potential for hydrogen to be deployed in an energy storage role.
- Assessment of advantageous locations for hydrogen electrolysis to reduce electricity constraints and deliver maximum value (2022)
- Net Zero Technology Centre Transition Programme and the Hydrogen backbone Link project commences (2021)
- Deep analysis report of site requirements for early renewable and low carbon hydrogen production plants and hubs in Scotland completed in Q1 2022
- Commence Scotwind 2 leasing round
Mid 2020s (2024-26)
- Innovation and Targeted Oil and Gas Decarbonisation (INTOG)(4 GW’s) offshore leasing round projects in construction and operation
- Renewable hydrogen production, linked to onshore wind, increasing in scale
- Hydrogen used by industry and some transport applications and domestic heat trial in H100 Fife
- A number of Regional Hydrogen Hubs now in development - FEED
- UK Government decision on the gas network to enable planning for delivery beyond 2030 (2026)
- Hydrogen storage beginning to be deployed
- Scottish Hydrogen Export Plan developed
- ScotWind 3 process begins
Late 2020s (2027-29)
- Large-scale CCUS-enabled low carbon hydrogen production developments in operation
- Renewable hydrogen production, linked to onshore wind developments, supporting management of constrained electricity
- Multiple regional hydrogen hubs in construction and operation
- Offshore wind developments including floating offshore wind projects linked to large-scale renewable hydrogen production
- Progress on cost reduction leading to a broad range of off-takers including industry, transport and initial export contracts
- Scotland’s first floating offshore wind hydrogen production in operation
- 5 GW renewable and low carbon hydrogen production capacity in Scotland
- Increasing commercial roll-out of hydrogen options in heavier duty transport modes
- Whole system energy strategy ambitions realised
- [100% renewable electricity; ambition for 8-12 GW onshore wind and 11 GW offshore wind; over a million homes and the equivalent of 50,000 non-domestic properties converted to zero or low emissions heating]
- Export of hydrogen to UK and Europe increasing in scale
- Economies of scale and technology innovation driving significant reduction in produced cost of hydrogen
- Large-scale hydrogen storage deployed
- 25GW production capacity ambition
- Scotland established as an enduring and reliable key exporter of hydrogen to Europe
Learning by doing
Over the past few years, the Scottish Government has supported a variety of projects which have helped demonstrate the use of hydrogen in the decarbonisation of key sectors, such as transport, through our funding of hydrogen buses, for heat through our funding for the H100 Fife project and in using hydrogen production to overcome the perennial problem of grid capacity constraints at the edges of our energy system on our islands, remote and rural communities.
The portfolio of projects is exemplified in our Orkney Islands where our initial funding of hydrogen projects at the European Marine Energy Centre (EMEC) has helped to accumulate a £65 million portfolio of projects. Working closely with Highlands and Islands Airports Limited (HIAL) and EMEC we have funded the introduction of a hydrogen- powered Combined Heat and Power unit to help meet the additional energy needs of Kirkwall Airport as it moves forward with its decarbonisation agenda. We are working with HIAL and key stakeholders to explore how this innovative technology can be replicated in other airport environs. Likewise, our initial funding of hydrogen buses in Aberdeen has helped establish the infrastructure to support an ecosystem of over 60 hydrogen-fuelled vehicles, which has in turn been a catalyst for the development of the North East of Scotland into one of the key model hydrogen regions in Europe.
Alongside this portfolio of demonstration projects sits a suite of investments in crucial research and development. Our funding of the Hydrogen Accelerator, hosted by the University of St Andrews, is supporting the implementation of hydrogen technologies into Scotland, and we are also working with partners including the Michelin Scotland Innovation Park and the University of Strathclyde to develop testing facilities to support the development of hydrogen vehicles through Scotland's vehicle supply chain.
The foresight to invest in these early projects has allowed the public and private sector in Scotland to work together to demonstrate these technologies and very importantly to 'learn by doing'. This approach has been a big part of the success story not only for our technical partners in these projects but from the public sector side too and indeed much of the learning takes place before a single molecule of hydrogen is even produced – as we gain valuable knowledge of how to work with others to assess, approve, consent, regulate and manage the contractual relationships necessary to deploy these projects, and how best to address constraints and challenges, including high production costs.
Our approach to cost reduction has been informed by the knowledge base developed through these early demonstration and research projects. The actions included in this plan will support a decrease in the cost of hydrogen production by increasing the scale of hydrogen production, supporting the growth of regional hubs that will provide a cost-effective model in the short term, and by supporting technology innovation.
Regional Hydrogen Energy Hubs
The creation of regional hydrogen energy hubs this decade will help to achieve our ambition of maximising the emissions reduction and economic benefits from the developing hydrogen economy. They will also support Scotland's ambition to become a global leader in the emerging renewable hydrogen market enabled by our abundant offshore renewables resources.
Hydrogen hubs are geographic locations where hydrogen producers are co-located with multiple users and potential exporters. This aggregation of cross-sectoral demand and co-location of the whole-hydrogen value chain minimises the cost of essential supporting infrastructure and makes the hub model an efficient pathway to producing hydrogen at scale and increasing demand.
There are a number of characteristics that might determine the suitability of a location for a hydrogen energy hub, including their proximity to energy supply and feedstock for production, high local demand, connectivity to onshore and offshore transportation infrastructure and networks, as well as in many cases proximity to port facilities to enable access to export markets.
Overlaps and linkages are emerging between the location of Scotland's current hydrogen development and the sites of Scotland's main industrial emissions. We also know that low-cost production of hydrogen is a key consideration underpinning transition planning – the transportation and storage of hydrogen adds to the overall cost per unit and therefore it make sense to co-locate production with multiple off-takers.
A Regional Hydrogen Energy Hub is a geographic location (region, city, island, industrial cluster) that is host to the entire hydrogen value chain, from production, storage and distribution to end-use. Regional Hydrogen Hubs will include multiple end-users with applications ideally covering more than one sector.
Led by industry, and the private sector, several regional hydrogen clusters or 'hubs' are forming. Some are already producing renewable hydrogen and supporting demand for hydrogen fuels, e.g., Aberdeen, while others are advancing to renewable hydrogen production, such as the Hydrogen for Glasgow project that links to hydrogen production from the renewable energy generated by the Whitelee Wind Farm operated by Scottish Power.
Additional areas and projects, from the North of Scotland and Islands to the South of Scotland, are rapidly developing as potential future centres of hydrogen production and demand including the Grangemouth industrial cluster. Scottish Power and Storegga are also developing the Cromarty Distilleries Project as part of the North of Scotland Hydrogen Programme. The Phase 1 project aims to have a 35MW electrolyser facility operational by the end of 2024, producing up to 14 tonnes of renewable hydrogen per day to meet local distillery demands and prove the technology at this scale. The project will initially supply renewable hydrogen to local distilleries operated by Diageo, Glenmorangie and Whyte and Mackay and the supply chain supporting those distilleries before expanding into a broader Cromarty regional solution for heat and transport needs whilst also enabling hydrogen export via the Port of Cromarty Firth.
Our islands also benefit from many of the characteristics that would enable them to develop as hubs of hydrogen production and demand. The Outer Hebrides, Orkney and Shetland Islands have some of the best wind conditions in Europe and have the potential to develop significant onshore and offshore wind generation through both community-owned and commercial renewable energy generators. This renewable energy could be used to produce renewable hydrogen via electrolysis that supports the location of Hydrogen Energy Hubs with large scale local demand ambitions, for example the Outer Hebrides Local Energy Hub, which is among the projects being supported via the UK and Scottish Government Islands Growth Deal and the Scottish Government's Green Growth Accelerator.
In our Programme for Government we made a commitment to support Carbon Neutral Islands, including pilots for islands to run on 100% renewable energy, create circular economies, and explore more sustainable transport options. We will work with at least three islands over this Parliament to enable them to become fully carbon neutral by 2040, as forerunners to a net zero Scotland by 2045.
Aberdeen Hydrogen Hub
Aberdeen is one of Europe's most advanced hydrogen cities. The City has implemented a wide range of hydrogen initiatives including: a hydrogen fleet of over sixty vehicles, a renewed fleet of 25 double-decker hydrogen buses, a range of light duty fuel cell vehicles into Council fleets and a local car sharing club, trials of hydrogen-fuelled refuse trucks and road sweepers, and commissioning of a megawatt-scale stationary fuel cell as part of Aberdeen's recent new conference centre development, plus two public hydrogen refuelling stations operating since 2015.
Building on these successful deployments we are investing over £15 million from our Energy Transition Fund to continue our support of Aberdeen City to build their vision of the Aberdeen Hydrogen Hub.
The Aberdeen Hydrogen Hub is a broad programme of work to develop a comprehensive investment in infrastructure for the production of and use of renewable hydrogen, its distribution, storage, and refuelling across the region to support the growth of broader transport fleets and the deployment of new applications Aberdeen City's experience in both the developing hydrogen sector and the established, high-value energy and supporting services sector existing in the region will enable this initial public funding to leverage significant private investment into the expansion of hydrogen fuel supplies for both imminent and future requirements in the city and deliver on both economic benefits and the regional/national Net Zero and Energy Transition agenda.
The establishment of sector-coupling hydrogen production hubs capable of simultaneously servicing transport, heat and industry needs will provide an effective energy integration opportunity for hydrogen and a critical step in increasing the scale of the hydrogen economy in Scotland. Hubs will create economies of scale by aggregating local demand across multiple sectors, drive cost efficiencies and facilitate knowledge sharing. The Scottish Government will, over the next five years, continue to create a supportive policy environment and alongside private investment enable the creation of a network of renewable and low-carbon hydrogen production hubs near demand centres in towns and cities across Scotland.
We have developed an Interactive GIS Hydrogen Mapping Tool which maps, and charts all of the hydrogen activity and projects in Scotland. Our GIS hydrogen map has multiple levels of key information on the location of constrained renewables electricity, road, rail and ferry routes and nodes of activity and other key infrastructure important to the systemic development and integration of hydrogen production in Scotland. This GIS Interactive Hydrogen Mapping Tool will be developed further and launched in 2022 as a web-ready tool for public access. This free to access tool will support project development and planning. We will work with stakeholders to ensure it remains up-to-date and can be developed further in future to be of maximum benefit to industry.
Hydrogen Production – Detailed Site Selection Study
To be successful, the development of renewable and low-carbon hydrogen technologies and large-scale deployment will be paramount to the success of Scotland's ambition to achieve 5GW of hydrogen production by 2030.
Scottish Enterprise recently published a report by the Net Zero Technology Centre and Offshore Renewable Energy Catapult which examined the opportunities and challenges for Scotland in developing early, hydrogen production in Scotland.
This report sets out the key characteristics of a site to support the development of a large-scale renewable and low-carbon hydrogen production facility. This includes aspects relating to feedstock, power supply, size and suitability of the land, the ability of the local area to support the development, and export routes to market for the hydrogen.
We have commissioned further work to determine detailed site requirements for hydrogen production sites at 200MW, 500MW and 1GW scale and will include consideration of the site requirements for hydrogen export from Scotland, from both a storage and conversion perspective and a marine infrastructure perspective. Site requirements for offshore hydrogen production will also fall under the scope of this work.
This report will be concluded in Spring 2022 and will identify key consent and licensing requirements and inform policy and funding decisions.
Scotland's Renewable Hydrogen Potential
Scotland's ability to generate renewable hydrogen at scale was clearly demonstrated by the Offshore Wind to Green Hydrogen Opportunity Assessment and Scottish Hydrogen Assessment undertaken in 2020, which indicated Scotland's renewable hydrogen production potential as 35GW by 2045, dependent on market conditions. The rate of growth of renewable hydrogen production in Scotland will be influenced by a number of factors, including market demand and the cost of renewable hydrogen produced in Scotland. We are building on our existing evidence base by undertaking work to identify the expected cost-trajectory of renewable hydrogen produced in Scotland to 2030 and 2045. This will provide critical evidence to support our understanding of the extent of the role that renewable hydrogen will play in a domestic and global market.
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