Scottish Government pledges £100m to help hydrogen sector

The Scottish Government is to commit £100 million to developing hydrogen as a greener form of power.

Industry bosses said Scotland had the opportunity to be a “leading hydrogen nation” – with ministers pledging to invest the cash over five years.

The funding was announced as ministers set the target of Scotland producing 5GW (gigawatts) of renewable and low-carbon hydrogen by 2030 – enough to power the equivalent of 1.8 million homes.

This could then be increased to “at least 25GW by 2045”, according to a new Scottish Government policy paper.

Ministers will set out more detail about how this could be achieved in a hydrogen action plan, to be published next year.

The UK Government will also produce its own hydrogen strategy in 2021, with ministers there having similarly set the target of 5GW of low-carbon hydrogen by 2030.

Ahead of next year’s action plan, the Scottish Government published a policy statement, setting out how developing hydrogen capacity could help with both meeting emission reductions targets and in “generating new economic opportunities in Scotland”.

Hydrogen can be used as an alternative to natural gas to transfer and store energy, delivering that energy in a form that emits no carbon dioxide when it is used.

According to the policy statement, Scotland “has in abundance all the raw ingredients necessary for the production of low-cost, clean hydrogen” and could produce enough to meet domestic demand to export some of the gas to Europe.

Energy minister Paul Wheelhouse said Scotland was the first country in the UK to publish a hydrogen policy statement that “sets out how we can make the most of Scotland’s massive potential in this new sector”.

He added: “Hydrogen is rapidly emerging across the international community as a sustainable solution for the decarbonisation of the economy and a key element of the energy transition picture.

“Scotland is prepared to play its full part together with other European nations – that’s why we’re publishing this key policy statement today and investing £100 million of Scottish Government resources to stimulate the sector and its supply chain.”

Mr Wheelhouse continued: “Scotland has, in abundance, all the raw ingredients necessary for the production of low-cost hydrogen as well as one of the largest concentrations of offshore engineering expertise in the world that can harness Scotland’s renewable energy potential in technologies like wind, wave and tidal power, to produce green hydrogen.

“Indeed, Scotland is one of the best-placed nations anywhere in the world to develop competitively priced hydrogen for our own economy’s needs and to generate a surplus in supply to export to other European nations with emerging demand but insufficient supply to meet their own needs.

“No one fuel or technology is, by itself, the solution to climate change, but hydrogen has the potential to be a very important part of a progressive, decarbonised energy system supporting our transition to net zero in transport, heating and industrial decarbonisation.

“We are committed to supporting this emerging sector to deliver a transformation in how we produce, store and utilise energy and to maximising the economic benefits that the production of hydrogen can bring.”

Nigel Holmes, chief executive of the Scottish Hydrogen and Fuel Cell Association, said: “We welcome this hydrogen policy statement which underlines the opportunity for Scotland to be the leading hydrogen nation, and puts us on the right path to deliver net-zero by 2045.”

At the same time as the policy statement was published, energy firm ScottishPower launched a new business division dedicated to delivering green hydrogen, signalling the company’s commitment to the rollout of the low-carbon technology.

Barry Carruthers, ScottishPower’s hydrogen director, said: “ScottishPower has a proven track record of exploring and investing in new, emerging technologies.

“We led the onshore wind revolution here in the UK over 20 years ago, we’ve been a significant innovator in offshore wind, helping to drive down the cost of the technology, and now we want to do the same for green hydrogen.”