Long in gestation, the UK’s hydrogen strategy[1] gives the strongest possible sense of a country heading rapidly in the wrong direction. Where most countries and regions are pushing the development of hydrogen from green electricity, the UK has committed to a future dominated by the conversion of natural gas with carbon capture. Most strikingly, the UK is projecting costs for hydrogen vastly greater than anywhere else in the world.

Always sceptical about hydrogen made from electrolysis, the government has exceeded its normal standards of myopia. Below, I compare the estimates just provided by the UK government and by the EU in June 2020, 14 months ago.[2]

These figures show jaw-dropping differences between the EU’s and the UK’s estimates of the cost of hydrogen made from renewables in 2020 and 2025 respectively.

Estimates for the cost of hydrogen from electrolysis of renewables (2025 or 2020)

2025 (UK) £112/MWh

2020 (EU) £64-£114/MWh[3]

These figures say that the EU saw the cost of hydrogen in 2020 as lower than the UK forecasts it will be in 2025. In the lowest cost locations, it was little more than half the price. The mid-point of the EU’s range is over 20% cheaper then than the UK forecasts for four years’ time. (It may be worth saying that nobody, but nobody, sees anything but the price of green hydrogen falling sharply in the next few months and years).

The differences widen. The EU estimates for the cost of renewable hydrogen in 2030 are up to 60% below the UK’s costs for 2050, twenty years later.

Estimates for the cost of hydrogen from electrolysis of renewables (2030 or 2050)

2050 (UK) £71/MWh

2030 (EU) £28-£62/MWH

And it’s is also worth noting that the US is targeting a hydrogen price of $1/kilogramme by the end of this decade. That’s equivalent to a price of just under £22/MWh, or 70% below the UK’s estimate of costs twenty years later. The world’s largest electrolyser manufacturer, Norway’s Nel, aims for $1.50/kilogramme by 2025 (£33/MWh), less than half the UK’s 2050 estimates.

What is going on? Why is the UK so jaw-droppingly less optimistic about renewable hydrogen than other entities? The suspicion must lie with the country’s devotion to the future of hydrogen from natural gas. It does very much look as though the policy-makers have determined that green hydrogen must remain more expensive than traditional routes of hydrogen manufacture using natural gas.

Estimates for the cost of hydrogen from different technologies (UK 2050)

Renewable electrolysis £71/MWh

Steam methane reforming

of natural gas £67/MWh

Autothermal reforming £65/MWh

As an aside, it’s notable that the the UK strategy paper talks of ‘small projects expected to be ready to build in the early 2020s’ using renewable electricity but ‘large scale projects expected from mid 2020s’ for those employing natural gas and carbon capture. In other words, renewable electrolysis is still a toy. Even by 2050, the typical project seems to be expected to use a 10 MW electrolyser, when everybody else is talking of schemes today of one hundred times this scale.

Nowhere else in the world expects hydrogen to be cheaper to make using natural gas with carbon capture than electrolysis by mid-century. The UK government numbers are truly staggering.

But, of course, there’s no reference that I could find in the UK strategy paper to any data or opinions from abroad. That’s despite many major economies publishing their own policies over the last year.

All one can say is this: if green hydrogen made in the UK does cost £71/MWh in 2050, there’s absolutely no point in trying to build an industry here. It will be vastly cheaper to import the gas from Spain or Portugal by pipeline or Chile by liquid hydrogen carrier. The whole UK strategy will come to nothing, using a lot of taxpayers’ cash in the next four decades.

[1] https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1011283/UK-Hydrogen-Strategy_web.pdf

[2] https://ec.europa.eu/energy/sites/ener/files/hydrogen_strategy.pdf

[3] €2.5-5.5/kg, using the Lower Heating Value and an exchange rate of €1.17/£.