The UK renewable hydrogen investment opportunity could be worth £23bn by 2030 to meet an annual demand of 10 terawatt hours (TWh), according to Cornwall Insight.
The analyst outfit has used the capital expenditure values for electrolysers and offshore wind from the Department for Business, Energy & Industrial Strategy (BEIS) and International Energy Agency (IEA), to estimate investment to establish infrastructure for supplying 10TWh of hydrogen demand in 2030.
The demand could increase to 37TWh by 2050, Cornwall Insight also forecast.
Cornwall Insight’s report examines industries that consume hydrogen today or have the potential to increase the use of low carbon hydrogen.
The report found that he largest demand (36TWh) is expected from high-temperature industrial processes hydrogen substituting natural gas and other fossil fuels.
Deva Devaraj, modelling analyst at Cornwall Insight, said: “UK industry, while contributing £331bn towards GDP (17%), also accounts for 18% of carbon emissions, which can be reduced via multiple decarbonisation pathways.
“For example, industrial processes using fossil-based electricity and heat generation can be switched to renewable sources, and processes requiring fossil fuels for heat generation can also be electrified. However, there is a substantial role for hydrogen in industrial decarbonisation.”
Hydrogen can be used as a feedstock, reducing agent and to generate heat and using low carbon hydrogen in industries “would be a catalyst” to scale up its production and lead to hydrogen technology adoption in other end-use sectors.
Devaraj added: “It should be noted that the low carbon hydrogen intake would be dictated by the rate of decarbonisation and their production capacity.
“Therefore, even though chemical manufacturers account for less than 1% of the total hydrogen demand, they are definitive offtakers with very little variability.”
The industrial heat process exhibits the greatest hydrogen demand potential (98%) and is “greatly influenced” by the penetration rate of low carbon hydrogen, thereby subjected to high variability, he added.