Investing in hydrogen: Ready, set, net zero
How we can help
Looking to invest in hydrogen?
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Achieving the UK's net-zero target by 2050 will be a challenge. Hydrogen can make a substantial contribution, but it needs investment and policy support to establish demand, increase the scale of deployment and reduce costs. The Ten Point Plan for a Green Industrial Revolution confirms the government’s commitment to drive the growth of low carbon hydrogen in the UK through a range of measures. This includes publishing its hydrogen strategy; setting out revenue mechanisms to attract private investment in hydrogen energy; alongside allocating further support for hydrogen production and hydrogen applications in heating.
We have created a bespoke model to help understand the cost of hydrogen in the UK across the value chain under different pathways. Our analysis highlights areas for cost reduction and identifies factors that could make hydrogen a more attractive investment proposition.
The role of hydrogen
The UK will need to replace all fossil fuel energy sources to meet the net-zero target by 2050. Hydrogen can help boost decarbonisation efforts across a number of sectors.
The cost of hydrogen
Building a hydrogen economy will require substantial and targeted investment. The chapter sets out the findings of our bespoke model that shows the levelised cost of hydrogen in each segment of the hydrogen value chain – production, conversion, storage and transport. The model also helps estimate the investment needed for production technologies and highlights the need for minimising the cost of production, conversion and transport to improve hydrogen’s commercial competitiveness.
Making hydrogen investing more attractive
Considering the size of the challenge and the urgency to make decisions, investors need to be confident that there will be demand for low carbon or carbon-free hydrogen and that investing in hydrogen energy will deliver a good return. Therefore, there is a pressing need for targeted policy interventions that are summarised in the final chapter of the report.
Five questions executives should be asking
- What hydrogen investing opportunities should your company explore?
- What role could the government play in supporting hydrogen in the future and how could this drive investment?
- How can hydrogen help oil, gas and chemicals companies progress against their decarbonisation targets?
- What impact could the developing hydrogen market have on power and utilities companies?
- What solutions could industrial companies offer the growing energy transition space?
