The UK Government’s Ten Point Plan and British Energy Security Strategy have set the direction of travel to 2030; alongside other technologies, there is to be a major ramp up of offshore wind and hydrogen production via electrolysis. Together, these will have a significant effect on the energy system. Although there is some uncertainty around the manner in which these new targets will be reached, they have great potential to deliver positive outcomes for the country. Among the numerous hydrogen production routes, offshore wind powered electrolysis is looking increasingly attractive for the UK and Europe. High gas prices are pushing the cost of blue hydrogen to around £5.70/kg. Against this backdrop, the costs of green hydrogen from offshore wind are projected to fall substantially; numerous research groups expect it to be competitive with, or even fall below this blue hydrogen cost by around 2025, then fall further to between £1.50 – 3/kg by 2050.

Results from numerous energy system modelling studies support investment in hydrogen technology. Investment group CLSA Limited have reviewed findings from five organisations: Bloomberg New Energy Finance, the International Renewable Energy Agency, the International Energy Agency, the Hydrogen Council and the Energy Transitions Commission. These five organisations have estimated that the world needs at least 500 million tonnes of hydrogen per year by 2050. CLSA, writing after the ongoing crisis in Ukraine, have estimated that this quantity is now required by 2040. CLSA have observed that the five studies expect hydrogen will provide between 12 to 22% of final energy demand by 2050, with another study from DNV estimating that 15% is required to meet the Paris Agreement goals. CLSA thinks this could be 15 – 20% by 2040. On average, the five studies predict that only about a quarter of this supply comes from blue hydrogen, which emphasises the importance of green hydrogen.