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Tom Collins (Worcester) (Lab)
I beg to move,
That this House has considered hydrogen supply chains.
It is a pleasure to serve under your chairship, Mr Betts, and a great pleasure to see my hon. Friend the Minister in his place. I congratulate him. It is good to see him back at the Dispatch Box, renewing his already well established work in our Government’s mission for growth and change. I thank my hon. Friend the Member for Rushcliffe (James Naish) for securing this debate. Unfortunately, there has been a switcheroo and I am taking his place, but I am very glad to be doing that and very grateful to him for the opportunity.
This is of course a very important topic. We have faced an overly warm summer this year and we keep seeing the weather reminding us of the urgent need for change. The global energy system is also rapidly transitioning, and the UK needs to respond to that. With our ambitious mission for growth, looking to have the highest growth in the G7, it is vital that we are competitive and, indeed, that we lead in the energy space, as well as renew ourselves industrially. The UK has shown great leadership in hydrogen supply chain development and hydrogen technology development. We have been leaders, but we have also navigated and illustrated the technically complex, multi-sector, internationally charged difficulties in decarbonising our economy. It has been unclear which technologies will win, but although there is still some small uncertainty associated with how the mix of technologies will play out, the questions of how we will produce, transport and store energy at that macro scale are now finding firm answers, so we are at a turning point. The transition is no longer being led by technology, but by economics, and it is time for us to respond to that shift.
The wider picture is beginning to resolve into clear focus, especially for hydrogen. In the future energy system, the UK will be more independent. It is quite likely that it will still be a net importer of energy but with a very strong position in Europe, given our incredible assets in renewables. Hydrogen and ammonia are likely to replace oil as the vector for intercontinental energy transport, and electrification will be common, especially in well-developed societies. The competitive economic battlefield will be for these fuels.
Just as that crystalising picture informs our context, it informs the UK energy strategy. We know that we will electrify what we can—and that will require a huge expansion of our electricity system across the board, from production to transportation, storage and end use—but it is also vital that we go big on hydrogen, as this is critical for reindustrialisation, for heavy transport and for us to maximise our country’s strengths. That all points to hydrogen if we are to reindustrialise the UK, which is vital for economic growth and national resilience.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
The hon. Member is making an excellent speech on a very important subject. He mentioned the production of ammonia. The fact is that fertiliser is made from ammonia and right now our farmers are facing increasing prices for a number of world reasons. Does the hon. Member agree that one of the strategic purposes of creating hydrogen is to support hard-pressed farmers all over the UK?
Tom Collins
The hon. Member is entirely right. Ammonia is a very important part of the future energy mix. It is interchangeable bidirectionally with hydrogen and it is a very compact energy carrier. It is a liquid—it is relatively easily handled and stored—but it also, vitally, provides direct injection into the agricultural fertiliser chain. That makes it a vital asset in our future energy system, as agriculture currently plays a very large role in our total carbon emissions.
How we get to the future energy system is similar to how we got to this point: economics is overtaking technology as the driver for change. It is not about choosing technologies; it is about choosing these key energy vectors and then facilitating markets to grow around them. If we look more closely at that challenge and at the current UK energy system, we have seen electricity decarbonising, but if we look at electricity use in comparison with other vectors in the UK, it plays a relatively modest role. If we look at our energy use over the course of a year, our daily electricity consumption is pretty flat, but if we overlay on to that the amount of gas we use as a country—remember, gas is providing a vital part of our electricity production, and indeed the responsive part—and we see waves with peaks in the winter and troughs in the summer. The peaks of those waves are three times higher than our day-to-day electricity use. Gas is doing the lion’s share of moving energy around the UK and supporting our electricity system, and oil, which is primarily used for transport and is our main vector for transport, sits at about the same level as electricity. That is the picture of how energy is split across the UK energy system.
What we can learn from that is that UK energy demand is peaky. It varies very rapidly, seasonally and throughout the day, especially for heat applications. As we move into a renewable world, we need to recognise that renewable production is also subject to these synchronous peaks and troughs. The UK is a small enough country that one weather system can influence the production of all our renewables. We are therefore subject to fluctuations both in the supply of renewable energy and in demand. We also know that global prices for energy will continue to fluctuate, and part of our Government’s strategy to make the UK rightly more energy independent is informed by our vulnerability to variations in international energy prices.
Whatever our vector mix, and however we cut up the pie of our future energy system, we absolutely will need storage to navigate these variations. The transition has rightly been described as a chicken-and-egg problem: how do we build a new energy system out of an existing one? We are led by economics, which means that we need a price for the new system. We need a price that breaks the cycle by providing producers with a way to sell their energy and by providing people decarbonising at the end-use point with the ability to buy the energy they need for decarbonisation and to make long-term investments. That price enabler is made stable by storage. The crux, therefore, of building this future energy system is to build transmission and storage of the key vectors that we want to use in the future. Therefore, it would be very valuable for the UK to develop a plan to commission and build out a strategic national clean energy reserve. That can be left to markets, but the Government need to drive it with an extremely strong and firm grip and with a clear vision. I urge the Minister to look at the ways that we can build on our current work in storage, while expanding it with a very clear and ambitious vision.
We can also start blending. Blending is sometimes misunderstood. There are currently investigations into blending hydrogen into our natural gas supply. That has a small benefit for decarbonisation, but it has a huge benefit for allowing us to build out production of hydrogen, because it gives producers a large and available sink for their hydrogen to be produced and sold and it allows them to build large-scale production with the certainty of a market. Blending is therefore a key enabler not of decarbonisation but of building production for a future energy system with hydrogen playing a major role.
It is also vital that we take action to fill the remaining gaps. Through my experience as an engineer working in research and development I have seen personally how powerful it is when the Government set goals and work in partnership with industry to try to meet those goals. Goal setting cuts through the noise of the usual business of research and development and the competition for investment, and it allows us to move forward. It has put the UK in an incredibly strong position.
The UK is already the leader in hydrogen standards, and with the publicly available specifications 4444 series, it is leading the way in establishing technical standards. We have an opportunity to build those out up to the norms of the British Standards Institution and the International Organisation for Standardisation. The UK has led and is leading that. The UK has led on technology with a series of first-in-the-world projects in hydrogen over recent years, and we have an opportunity to lead through our geography with a well-established oil and gas industry ready to transition with fantastic geology for salt cavern storage.
Mr Gregory Campbell (East Londonderry) (DUP)
The hon. Member refers to geography. In Northern Ireland, particularly in my adjoining constituency of North Antrim, hydrogen buses have become a phenomenon that was unheard of 15 or 20 years ago. This week, with the tube strike taking place, buses are being used inordinately in London and are making very slow progress through the congested streets. Hydrogen buses emit much less pollution than diesel or petrol vehicles. Does he agree that we need to promote hydrogen in all aspects, but particularly transport, whenever difficult times come?
Tom Collins
I thank the hon. Member for his point—he is entirely right. Hydrogen is a key enabler for industrial processes that need high temperature, high power and reducing atmospheres. It is a vital feedstock for a large part of our materials supply chain, and it is a key enabler for future heavy transport, with buses being an excellent example. I share his passion—my constituents will be the first to tell everyone how important buses are to me, and I desperately desire our current oil-fuelled buses to be replaced by some form of electrified transport, be that energised by batteries or by hydrogen and fuel cells.
So, what next? There are quick wins available in the space of hydrogen. Reviewing some of our safety regulations, which are slightly outdated for a world where hydrogen will become more commonplace, could make a big difference, particularly on exclusion distances and ammonia, which is currently treated as a chemical for storage. Introducing regulations that treat ammonia as a fuel and allow its storage under simplified guidance would make a huge difference. I have already mentioned blending. It is time for the Government to work in an agile and innovative way with other Departments—as they are doing—to build out this capacity.
A longer-term road map for heavy transport and for heat would be very helpful. These are hard-to-abate sectors. I would like to see recognition that heat has proven one of the hardest areas of our economy to decarbonise. It is important that, while we have ambitious targets to electrify heat, we keep the door open to hydrogen providing that fallback, as gas does now for many electrified projects, to allow us to get there with confidence, rapidity and depth of decarbonisation.
Our planning reform is doing fantastic things for the energy transition, allowing us to build out our electricity transmission system and future storage. There are opportunities for us to echo that in gas and liquid fuel transport and storage, alongside electricity, for hydrogen and ammonia in particular. As I have mentioned, innovation support is vital as we work cross-Department to bring this transition. I have seen at first hand how powerful it can be when Government set goals and work in close partnership with industry, but I have also seen where there is room for us to strengthen our innovation offer around hydrogen to make this transition even more successful.
There has never been a more important time for the agile, mission-led approach of our Government. There is a need for ambition in this space. Investment is currently following vision, and the UK has an opportunity to present a powerful vision. We have seen some of our work around hydrogen and the investment rounds slipping. This is the time for Government to be agile, mission-led and work in partnership with industry to accelerate that, bring shared focus and work in closer partnership with industry, with a goal-setting approach, to cut through the administration and bureaucracy and, with confidence, build out the future economy that we can start to more clearly envisage. With ambition and decisive action, the UK can prosper, and a vital part of that is our hydrogen supply chains prospering.
Several hon. Members rose—
Mr Clive Betts (in the Chair)
Six Members are indicating that they want to speak. We have about 45 minutes, so that means a maximum seven minutes for each speech from Back Benchers. I call Wera Hobhouse.
Wera Hobhouse (Bath) (LD)
Thank you, Mr Betts; it is a pleasure to serve with you in the Chair. I congratulate the hon. Member for Rushcliffe (James Naish) on securing the debate—I supported the application—and the hon. Member for Worcester (Tom Collins) on introducing it so competently.
The UK has established strong foundations for a domestic hydrogen industry, which already contributes £8.4 billion to our economy. Improving hydrogen supply chains could benefit the economy by £18 billion in gross value added and 60,000 new highly skilled jobs by 2050, according to research from Hydrogen UK. Sixty thousand new jobs and £18 billion in gross value added for our economy are not something to ignore.
Sustainable, or green, hydrogen has the potential to drive job creation, economic growth and decarbonisation across sectors currently reliant on high-carbon fuels, and particularly the aviation sector. There is enormous potential for hydrogen in aviation. According to the International Energy Agency, 65 million tonnes per year of low-emission hydrogen must be produced globally by 2030 to meet our net zero targets. Domestically, Hydrogen UK has made it clear that we need 10 GW of hydrogen production capacity by 2030, alongside urgent investment in storage, to more than treble our capacity between 2030 and 2035. We need this infrastructure to reach a final investment decision.
A significant portion of the UK’s hydrogen storage will be for aviation. On a recent visit just north of my constituency, I saw the extraordinary work of ZeroAvia. Its business model is currently built on retrofitting relatively small aircraft, but it has the ambition to expand to medium-sized aircraft. It is absolutely fascinating to see what ZeroAvia has achieved. Backed by the likes of Airbus, British Airways and the UK Infrastructure Bank, ZeroAvia has already achieved world-first flight demonstrations of hydrogen electric engines. It has raised more than $250 million and employs more than 200 people.
ZeroAvia’s hydrogen electric engines are not a distant dream. Airlines are already pre-ordering more than 3,000 units, with commitments from American Airlines, United Airlines and UK operators. These engines can cut aviation’s climate impact by more than 90%, with only water as a by-product. Again, the real beauty of this is that ZeroAvia is retrofitting planes, so we do not have to build new ones. That in itself is an emission reduction. Of all modes of transport, aviation is perhaps the best suited to hydrogen. It is energy-intensive and weight-sensitive, making hydrogen’s high-energy density and efficiency critical. Unlike road or rail, aviation has more limited alternatives.
Hydrogen is not just desirable, it is essential. But we can achieve these things only with better storage solutions, as the hon. Member for Worcester mentioned, lower operational costs and a secure, consistent supply. Producing green hydrogen is extremely energy-intensive and requires a large amount of renewable energy. On average, producing 1 kg of hydrogen consumes around 50 kWh of electricity. This high energy demand means that to produce more green hydrogen, we must drastically accelerate our renewable energy capacity.
That is why I am a little concerned that some renewable energy projects are being pushed out of the grid connections queue, because they are not seen as immediately necessary. That seems a short-sighted approach, and it could hinder our ability to scale green hydrogen production. What we should be doing is oversupplying renewables so that we have a surplus that allows us to not only produce enough green hydrogen but potentially become a net exporter of renewable energy across Europe.
The hon. Member for Worcester also mentioned the need for stronger regulation for the wider applications of hydrogen. The Government must set clear standards for sectors such as domestic heating, where hydrogen boilers still lack the necessary regulation for home use. I know that the Government are a little slow on hydrogen in home heating.
Tom Collins
Before coming to this place, that was my exact area of work, and I can assure the House that the current regulatory framework has enabled the certification of these products. They have been shown to be safe; in fact, they are soon to be trialled up in Scotland, in Fife. So some of these barriers have recently been mitigated and reduced very quickly by UK innovation. The opportunity is there now to push forward into delivery.
Wera Hobhouse
I am glad the hon. Member clarified that. He also made a point about mixing hydrogen. Hydrogen is possibly not the end destination for heating in this country, but it will be extremely important to continue looking into it as a transition and to ensure that the Government do not miss an opportunity. In a recent meeting with Wales & West Utilities, which manages the gas grid in my constituency and beyond, it was explained that hydrogen remains a highly viable option for household heating, particularly if we look into blending.
We should take inspiration from the University of Bath, a national leader in research and innovation. Bath is a key partner in pioneering hydrogen aviation projects such as the hydrogen fuel cell-powered double-decker bus and liquid hydrogen pump technology.
Hydrogen is not a silver bullet, but in aviation it is the fuel of the future. If we back it with the urgency it deserves, Britain can lead the world in hydrogen supply chains, deliver cleaner, cheaper energy, and ensure that our journey to net zero is also a journey towards prosperity and fairness.
Luke Myer (Middlesbrough South and East Cleveland) (Lab)
It is a pleasure to serve with you in the Chair, Mr Betts. I congratulate my hon. Friend the Member for Rushcliffe (James Naish) on securing the debate and my hon. Friend the Member for Worcester (Tom Collins) on opening it so well.
The Teesside region already produces much of the UK’s hydrogen, in an economy built on the legacy of ICI, and it continues today with BOC’s Teesside hydrogen carbon capture, usage and storage project. We have the pipelines, the port and the skills, and now the prospect of a new £4 billion net zero Teesside CCUS project linked to the Endurance saline aquifer beneath the North sea. With projects across our industrial cluster, we are well equipped to deliver perhaps a quarter of the Government’s 2030 target.
The potential is huge, representing thousands of construction jobs in the short term, with long-term roles in energy, transport and manufacturing, and the chance to give our young people skilled work close to home. This is about livelihoods and whether young people in Middlesbrough, Redcar, Cleveland, Stockton—my hon. Friend the Member for Stockton North (Chris McDonald) is in his place—Hartlepool and Darlington can find skilled, unionised work in the industries of the future, rather than having to leave home to find opportunity elsewhere.
That shift will not happen by accident and needs Government to back British supply chains, to ensure that we build the infrastructure and elements we need here, not overseas. It means putting in specific sector support for industries such as steel manufacturing and construction to adopt hydrogen where it is needed—for example, hydrogen for direct reduced iron. It means ensuring that contracts come with conditions on fair pay, skills and apprenticeships. And it means putting local communities in the driving seat, devolving power and investment so that the people of regions such as Teesside can shape this transition, not just watch it happen from the sidelines.
Given the outsized role the north of England is already playing through the three major clusters, the Government should perhaps establish a regional body—an acceleration forum—to draw together existing work and drive hydrogen development in the north. In any case, pioneering businesses, research partners and regional governments are driving the work forward, and co-ordinating that investment and innovation is important.
I am slightly more cautious about domestic heating, which has been touched on in the debate. That is purely because our region saw the unsuccessful trial in Redcar in 2023, when the public opposed the project in the end. It is important that people are brought along in the process. That is not to say these things are not safe or possible—there are areas of the country where blending works well—but it is about doing this with communities.
Wera Hobhouse
I already made the point that we need to take the public with us, but that would be the same for any hydrogen application. Where would we be if people were so concerned about hydrogen that they did not want to be on a hydrogen bus or a hydrogen-powered aeroplane? Is there not a case for educating the public better, rather than abandoning projects altogether?
Luke Myer
I can only speak to the public shift we saw in our region. The public are fully behind projects such as hydrogen fuels for public transport, which we are seeing trials of in Teesside. But, for whatever reason, there was much more reluctance over the Redcar trial, and it was not without significant investment in educating people on the benefits.
Tom Collins
Once again, I intervene only because I have painful personal experience of this situation. The Redcar trial was subject to a distinct, explicit and targeted campaign seeking to bring about its failure. It was extremely frustrating to experience, as the trial was testing both electrification of heat and conversion to 100% hydrogen—two key pathways for decarbonising heat that need to be validated. It was very frustrating to see that, and it was the result of a targeted campaign, but we have also seen that where the engineering is well explained and consumers are able to understand that this is just a different gas—in fact, a gas that already circulated in UK gas pipes prior to the conversion of the 1960s—these things can be done successfully. It is therefore important that we show positive ambition for hydrogen and help the public to feel secure about a problem where the engineering has been solved.
Luke Myer
Having tried to make many of the points that my hon. Friend made during that experience, I am more sceptical about whether that shift will happen quickly or easily. There is certainly huge potential for industrial use and for transport.
In any case, our region helped to power Britain’s industrial revolution, and we can do the same today through the age of clean energy. Hydrogen can anchor a new era of good jobs and pride in our communities if we have the ambition to make it work for working people.
Jim Shannon (Strangford) (DUP)
As always, it is a real pleasure to serve under your chairship in Westminster Hall, Mr Betts. I thank the hon. Member for Worcester (Tom Collins) for leading the debate and for the many conversations in recent years surrounding the need for alternative methods to fossil fuels. There is no doubt whatever that hydrogen is a much talked-about method, so it is great to be here today to discuss these matters. I believe that we must commit ourselves to the net zero targets, and we must meet them, or try to. To do so, we must have a strategy that encompasses all of the United Kingdom of Great Britain and Northern Ireland.
I am pleased to see the Minister, who has a passion for this issue, in his place. Maybe the fact that he is still here today tells us just how good a job he is doing. He is a safe pair of hands and a friend to us all, for he has a deep interest in this matter. I am also pleased to see the shadow Minister, who brings a spark to this debate in every way, as he does when he speaks in the Chamber.
Northern Ireland wants to play a role. We have strong potential for green hydrogen production, due to our significant offshore and onshore wind resources, especially surrounding the Antrim coast in the Irish sea. There are also interests in blue hydrogen, but for Northern Ireland specifically, green hydrogen is the focus for sustainability. Queen’s University has been to the fore in trying to promote the issue; I spoke to the hon. Member for Worcester beforehand and I know that he knows that, but maybe the Minister does not, although he is a regular visitor to Northern Ireland, and why not? What better place to go for work or indeed for a wee trip? It is important to have connections between universities and business, and the partnerships that come from that. Perhaps Government could focus on that as well. I know that the Minister does that regularly.
There have been discussions throughout Northern Ireland about hydrogen storage and the potential need for development. Northern Ireland’s main hydrogen storage development is the Islandmagee energy storage project, a unique salt cavern facility in County Antrim, in the constituency of my right hon. Friend the Member for East Antrim (Sammy Wilson). That is just an example of what we can use to move this development forward in the direction that it needs to go. That unit was initially planned for natural gas, but it has the potential to transition to hydrogen, supporting net zero goals.
We have heard of many developments in relation to hydrogen and transport over the last couple of years—my hon. Friend the Member for East Londonderry (Mr Campbell) referred to that in his intervention, and the hon. and learned Member for North Antrim (Jim Allister) will do likewise in a few moments. The great thing about Wrightbus is that its net of employment applies not only to North Antrim; many people across all constituencies work for it and have helped to develop the project there through their work on the shop floor. Some of the UK’s companies have taken part in a project to inject millions into the economy and create thousands of jobs, and Wrightbus in Northern Ireland is one of them. It is a leading producer of hydrogen buses, which provide safe, reliable and cost-effective transport.
My hon. Friend the Member for East Londonderry was right to make the point about the travel chaos in London yesterday. What should have been a 15 or 20-minute journey took an hour and 20 minutes; the lady who works in our office had to leave home two hours earlier to try to get the bus connections—or even to get a bus. These are things that we should be looking at, not just because of this week but because of their ability to reduce the impact on the atmosphere and environment.
The progression to net zero will also bring countless jobs, offering great opportunities in terms of apprenticeships. My query to the Minister is what has been done to encourage apprenticeships. There was a great defence development strategy statement yesterday, which was good to hear, and out of that was coming jobs—but were apprenticeships coming out of that as well? Could the Minister tell us about apprenticeships within the hydrogen sector?
There are also numerous hindrances preventing hydrogen from emerging. There is the opportunity to establish strong supply chains, but there are some challenges, for example the high cost of producing and using low-emission hydrogen compared with fossil fuel alternatives. There is also some uncertainty surrounding the future applicability of hydrogen in different sectors. Globally, we need to be aware that there is so much competition. It is good to have this hydrogen debate, and to have a hydrogen strategy, but we also need to be competitive. We must take advantage of the opportunities that we can while we have the capability to do so. I ask the Minister, how we can keep those costs down and make it competitive for the future.
As we look to the future of energy, hydrogen offers one of the most promising, yet complex, paths to decarbonisation. It presents us with a clear opportunity to create cleaner industries, decarbonise transport and build a more resilient energy system across Northern Ireland and the rest of the United Kingdom. I always think that the United Kingdom of Great Britain and Northern Ireland with all the regions together, can do it better, and I think the Minister will reinforce that in his summing up.
I look to the Minister to engage further with his counterparts in the devolved nations. I know he does so regularly, but it is always encouraging when the Minister says he has been in touch with Queen’s University Belfast, or with Wrightbus in Ballymena or wherever it might be, to ensure that we are doing things to progress and move forward as a collective—a collective that is better together in relation to our net zero supply chains.
Jamie Stone (Caithness, Sutherland and Easter Ross) (LD)
It is a pleasure to serve under your chairmanship, Mr Betts. I congratulate the hon. Member for Worcester (Tom Collins) on a very timely debate indeed; he knows his subject, and that is to the benefit of us all. Touching on the contribution made by my hon. Friend the Member for Bath (Wera Hobhouse), if we had mentioned hydrogen aviation prior to about 1940 it would have had people screaming in fear, because that was the era of the Hindenburg and the R101. The hon. Member for Worcester is absolutely correct that the potential for air transport is massive; the fact that when hydrogen and oxygen are combined we get water means that it is the cleanest of all forms of energy.
I made mention in my intervention of the production of ammonia. If my chemistry lessons have stuck, I think it is NH4, which can then be turned into fertiliser. Our farmers are very worried by the increase in fertiliser prices, and it looks as if they are going up again this year. That can play merry hell with their farm accounts as they try to forward guess what their profitability will be. We know that EU tariffs on Russian fertiliser mean an increased price for EU countries. My point is a simple one: the more we can promote the manufacture of fertiliser out of ammonia from hydrogen produced in the UK, then the better that will be for this country. We have a great export opportunity.
I give great credit to the previous and present Governments—my constituents are very grateful to them—for having had the courage to go for Cromarty Firth and Inverness green freeport. The idea producing hydrogen was part and parcel of formulating that bid to the previous Government, and of the way we talk to the present Government. The experts in the field have been telling me that the potential for bulk hydrogen to be sailed across the North sea from the north of Scotland to very keen markets in Europe is huge, and that there is real money to be made here. When the bids were put together, the production of green hydrogen was part of that bid.
The Minister, whom I, like the hon. Member for Strangford (Jim Shannon) am very glad to see in his place, knows full well that the issue of the grid we are proposing—where the pylons and lines go, whether they are sub-sea or above the ground, the batteries and all that—is a controversial and hot topic. However, I give him his due; in his previous incarnation he was as helpful as he could possibly be.
When the grid improvements were initially proposed, and yes we of course have to do that if we are serious about getting to net zero, I wrote to the then Prime Minister and the First Minister of Scotland to ask whether the proposals matched the production of green hydrogen that we are keen to do in the north of Scotland. I may or may not have got the formula for ammonia right but, if I remember my physics correctly, the longer the distance one has to send electricity down a wire or a cable, the more energy is lost. Is it I2R? It is something like that; I have probably got it wrong, and the Minister probably knows it better than I do, but the point is that the longer the cable, the more resistance, and energy is lost because heat is produced and radiates off it.
I earnestly say to the present Government, looking at the production of green hydrogen in the north of Scotland, “Would it not make sense to produce an awful lot of that as near as possible to where the energy is actually being created?” We have a plethora of wind farms in the north of Scotland. We have the Beatrice wind farm off the coast of my constituency and there are many others up and running or projected for Scotland. It seems to me that the manufacture of hydrogen as near as possible to that source of energy would make enormous sense.
Tom Collins
The hon. Member is entirely right. One of the key questions often asked about green hydrogen is cost. There are many projections showing cost coming down dramatically in future, and part of that comes from the fact that hydrogen production is able to utilise renewable electricity that would otherwise be constrained or not used. He is entirely right that geographical and time constraints on when energy is produced are vital, but create a low-cost source of energy for the production of hydrogen, which brings the cost of hydrogen down, so I thank him for his point.
Jamie Stone
I thank the hon. Member for his helpful intervention.
I want to conclude with two points. First, I am optimistic that this is a subject that will enjoy cross-party support—I cannot see anyone rocking the boat on this one; it would be madness to do that—and sometimes, when things have cross-party support, they really can happen. There is a great opportunity in this country.
Secondly, to make an unashamed, blatant advertisement for my constituency, as Dounreay decommissions, we have sites and skills particularly near to where the energy is being created. If the His Majesty’s Government would look at the creation of hydrogen in my patch, I would be most awfully grateful. With that blatant touting for business, I conclude my contribution.
Jim Allister (North Antrim) (TUV)
It is a pleasure to serve under your chairmanship, Mr Betts. I have the privilege of representing North Antrim, which has the success story of Wrightbus. One of Wrightbus’s many claims to fame is that it produced the first hydrogen double-decker bus in the world, and has been a leader in the technology in the evolving success story that hydrogen can be.
The fundamental problem for our nation in fully exploiting hydrogen is the mismatch between the technology and the infrastructure. The ability to refuel hydrogen buses is curbing their potential production. From talking to Wrightbus, I know that it could and would produce a lot more hydrogen buses, but for the fact that customers are restrained by the lack of infrastructure for servicing them and keeping them on the road. Despite the remarkable range of the Kite Hydroliner bus that Wrightbus produces—it can do up to 1,000 km—it needs to be refuelled. That is what is holding us back in the United Kingdom, including in Northern Ireland.
It is not without significance that, although Germany is a major player in hydrogen production, Wrightbus has been able to sell it a large number of hydrogen buses. Why? Because Germany, through a Government programme, has advanced its focus on synchronising with the infrastructure that is needed. There is also a considerable German programme to actively support the hydrogen bus market. That is why it is possible. China, of course—as in most things—is also a big player when it comes to hydrogen. In particular, it has advanced the production of hydrogen from organic waste; in that regard it is probably well ahead of most of the rest of us.
There are multiple opportunities in relation to how hydrogen is produced, because we now have the leading technology to use it in transport, particularly in buses. However, the one area in which I think we are failing is in providing the infrastructure, which must be there to make it succeed.
Sadik Al-Hassan (North Somerset) (Lab)
Does the hon. and learned Member agree that to provide certainty for long-term investment and strategic infrastructure development, and to support robust supply chains, we must invest in changing regulatory environments by working with and funding regulators—such as, for example, the Civil Aviation Authority—to enable a long-term, clear road map for hydrogen development, production, supply chains and use? Does he also agree that £16 million for a four-year road map offers great value for money?
Jim Allister
Yes, I am happy to agree with that. It feeds into this point: the Government talk about their industrial strategy, which is good, but that strategy needs to energise the infrastructure in synchronisation with the technologies we are using. When it comes to hydrogen, part of that industrial strategy needs to focus more on ensuring that we have the supply infrastructure to enable the deployment of the buses and other vehicles that we can readily produce to use of hydrogen.
Jamie Stone
We all want to see electric vehicles being used as much as possible, because that is part of getting to net zero. However, in a far-flung constituency such as mine, it is significant that a hydrogen-powered car has a greater range than an electricity-powered car. That backs up the argument the hon. and learned Member is making.
Jim Allister
The range for hydrogen is excellent, but when drivers get to the end of that range, they need somewhere to refuel it readily. The refuelling is quick: a hydrogen bus can be refuelled in 10 minutes. It is not a lengthy process, as it sometimes can be for electric buses. The technology for hydrogen is good and is developing at pace, but the infrastructure is the drawback. That is what is holding us back.
I say to the Government: let us do it in tandem. Let us of course continue to develop the excellent technology that we have, and the world leaders that we have in it, but let us synchronise that with ensuring that the infrastructure is there to match it.
Mr Clive Betts (in the Chair)
Back-Bench speeches must finish in time for the Front-Bench speeches to begin by 10.28 am. Thank you everyone so far for your co-operation.
Dr Roz Savage (South Cotswolds) (LD)
It is a pleasure to serve under your chairmanship, Mr Betts. I thank the hon. Member for Rushcliffe (James Naish) for securing this debate, and the hon. Member for Worcester (Tom Collins) for leading it with such competence and aplomb.
Hydrogen has long been talked about as the fuel of the future, and we are beginning to see how it can be the fuel of the present. If we are serious about net zero, energy security and building the industries of tomorrow, hydrogen must play a central role. Electrification is advancing rapidly but, as we know, about 80% of global energy demand is still for molecules, not electrons. Heavy industry, transport and heating remain stubbornly difficult to decarbonise. Hydrogen offers us a way forward. It is flexible, storable and able to integrate with existing infrastructure. Hydrogen can be partnered with offshore wind in tanks under the water, reducing the need for pylons. It could reduce the need for oversized solar farms on agricultural land, which reduce the land available for food production. But if the UK is to reap the benefits, we must act with urgency. The Hydrogen Innovation Initiative has calculated that securing just 10% of the global hydrogen technology market could deliver £46 billion per year to our economy by 2050 and support over 400,000 jobs. That is a huge opportunity, but it will not wait for us. Other countries are also moving fast and if we are too cautious, we risk being left behind.
In my constituency of South Cotswolds, we see a glimpse of what that future could look like. In just three years, a start-up called Wild Hydrogen has grown from a small lab team to employing 18 skilled people. It is exploring ways to turn waste into clean hydrogen and biomethane, with the added benefit of capturing carbon. The company’s aspiration is bold: the idea that Gloucestershire could possibly host the world’s first carbon-negative town before the decade is out.
Another exciting young company, which is clearly hosting numerous MPs, is ZeroAvia, based at the Cotswold airport in my constituency. As already described by my hon. Friend the Member for Bath (Wera Hobhouse), ZeroAvia is developing hydrogen-powered planes with enormous potential to disrupt the aeronautical industry.
Whether or not those specific goals are realised, the principle stands: innovation is happening already here in the UK. What is missing at the moment is the scale of investment and policy certainty to move from promising prototypes to production at pace. This debate is extremely timely. We have a chance to shape the supply chains, the regulatory framework and the financial environment that will allow British firms to thrive and lead in this vital sector. If we succeed, the prize is not only economic but environmental: cleaner air, lower emissions and a more resilient, self-sufficient energy system. I echo the hope expressed by my hon. Friend the Member for Caithness, Sutherland and Easter Ross (Jamie Stone) that this technology enjoys genuine cross-party support. Let us match the boldness of the innovators in my constituency and beyond with equal boldness in our policy. That means backing domestic supply chains, ensuring the right market signals are in place, and providing the certainty that investors and communities need. If we truly seize this moment, the UK can lead the world in clean hydrogen.
Mr Clive Betts (in the Chair)
I thank all hon. Members for their co-operation. I said to one hon. Member, quite rightly, that if you come late to the debate, you do not really expect to get called. Equally, if hon. Members speak in the debate, I expect them to stay and listen to other Members’ contributions. I shall be making that point to at least one hon. Member at the end of the debate. We shall move on to the Front Benchers. You can probably each have 12 minutes or so, but please make sure a bit of time is allowed at the end for the mover of the debate to wind up.
Claire Young (Thornbury and Yate) (LD)
It is an honour to serve under your chairship, Mr Betts. I thank the hon. Member for Rushcliffe (James Naish) for securing the debate, and his able substitute, the hon. Member for Worcester (Tom Collins), for opening it.
With good access to offshore wind resources, the UK is ideally placed to scale up green hydrogen production, and I can see the benefits of that locally. At IAAPs—the Institute for Advanced Automotive Propulsion Systems—which is just outside my constituency, work is being done on green hydrogen production and its uses in the aviation, marine and heavy transport sectors, and in June 2023 I attended the Western Gateway hydrogen conference.
The wider south-west and Wales could offer abundant renewable energy—the Celtic sea has huge offshore wind potential—which can anchor green hydrogen production alongside connected industries that can use the hydrogen. For example, in aviation, progress is being made by companies such as Airbus and GKN Aerospace, which employ hundreds of my constituents, and ZeroAvia, as highlighted by my hon. Friends the Members for Bath (Wera Hobhouse) and for South Cotswolds (Dr Savage).
I recognise the importance of the green hydrogen industry for growth and the high-value jobs that it brings for local people, as expanded on so well by, among others, the hon. Members for Middlesbrough South and East Cleveland (Luke Myer) and for Strangford (Jim Shannon). It brings huge decarbonisation benefits for things such as buses, as highlighted by the hon. and learned Member for North Antrim (Jim Allister), and adjacent benefits such as the production of fertiliser, as highlighted by my hon. Friend the Member for Caithness, Sutherland and Easter Ross (Jamie Stone).
However, we are not realising the potential for the UK to be a world leader for a number of reasons, as set out in the September 2024 report by Hydrogen UK on the hydrogen supply chain. The level of capital funding that the UK currently provides the hydrogen supply chain does not match the level in competitor regions. It has been slow to respond to a rapidly developing market and has not made the investment in infrastructure or skills needed to take advantage. As the Hydrogen Innovation Initiative has highlighted, the UK must act now.
Wera Hobhouse
Since there is a bit of a south-west mafia here, it might be worth mentioning those at the south-west hydrogen hub and to urge the Government to engage with them, because they are doing great work on the provision of hydrogen across the region and the sectors.
Claire Young
I thank my hon. Friend for her intervention, and I am grateful for the support of the wider south-west mafia.
Hydrogen UK has reported that unlocking storage infrastructure investment is urgently needed as the sector could require 3.4 TWh of large-scale hydrogen storage by 2030, which could increase to 9.8 TWh by 2035. Projects in the UK are currently smaller and lack visibility so project developers and off-takers stick with their international suppliers, and there is the ever-present problem for all small businesses of navigating the so-called valley of death as they grow.
The Liberal Democrats want to see investment in research and development of new green energy sources, which will be vital for developing new green hydrogen technologies and breaking our dependence on fossil fuels. We support a transition to clean, home-grown renewable energy sources to reinstate the UK as a world leader in renewable energy, to improve energy security and to bring down consumer energy bills: the importance of long-term storage to achieve that was highlighted in the introduction. Disappointingly, the previous Conservative Government failed to act with anything close to the speed or ambition that this challenge demands, and Putin’s barbaric and illegal invasion of Ukraine has exposed the risks of relying on countries that may seek to exploit dependence on fossil fuels and use it to their advantage.
Britan can lead the way on hydrogen innovation with our history of expertise, pioneering businesses and research institutions, but the Government have been criticised for failing to invest comparable amounts of capital funding in hydrogen to the level that other regions do. Hydrogen UK has called on the Government to support business-led innovation programmes, which would anchor supply chain growth into the UK and support collaboration with private business investment into key areas of the hydrogen supply chain. It has also called for a nationwide supply chain programme to leverage private investment into UK supply chains and key supply chain technologies, and to support both existing companies to pivot and new companies to enter the hydrogen market.
We want the Government to commit to winding down the oil and gas industry, but that must come hand in hand with a detailed plan for the redeployment of skills and local jobs. The economic impact assessment done by Hydrogen UK estimates that hydrogen can deliver significant economic benefits, including 30,000 jobs annually and £7 billion of gross value added by 2030. Trade unions in the industry are united in calling for substantial funding to build domestic renewable manufacturing but, disappointingly, the Chancellor did not commit to that in her most recent spending review. We urge the Government to invest in upskilling the existing workforce in adjacent sectors such as oil and gas, and to secure the investment that is needed to realise the job-creating potential of the green just transition.
Another key mechanism would be to link the UK emissions trading scheme with the EU’s, implementing a UK carbon border adjustment mechanism, making the business case stronger for low-carbon hydrogen in domestic supply chains, and adopt green procurement policies that support clean supply chain development. Finally, my right hon. Friend the Member for Kingston and Surbiton (Ed Davey) has repeatedly called for a sovereign green wealth fund to reinvest wind-generated revenues into green industries including hydrogen, promoting decarbonisation and manufacturing job creation across the UK.
To conclude, we urge the Government to put in place a comprehensive plan to support low-carbon technology for industries and homes, in particular to make the UK a world leader in hydrogen.
Mr Clive Betts (in the Chair)
I have had a note from the hon. Member for Strangford (Jim Shannon) explaining why he had to leave the debate. I fully accept his explanation and apology, and thank him for giving it to me.
Andrew Bowie (West Aberdeenshire and Kincardine) (Con)
It is a great pleasure to serve under your chairmanship, Mr Betts. It is also a pleasure to take part in a debate on energy in which there is such a cross-party consensus. It is very rare in debates on energy these days to get such agreement on the way forward and on what we should invest in. I congratulate the hon. Member for Rushcliffe (James Naish) on securing the debate and the hon. Member for Worcester (Tom Collins) for his very able opening speech. It is also rare that we actually learn something in these debates, but I have learnt quite a lot this morning, which is a surprise.
The hon. Member for Worcester talked about the vitally important part played by gas in our energy system both today and moving forward, as well as blending, which is something we need a resolution to in the very near future, as I have heard in my discussions with National Gas and others. I urge the Government to make their decision on what the future might be as quickly as they can. That would be good for everybody.
The hon. Member for East Londonderry (Mr Campbell) spoke about hydrogen buses. He was followed by the hon. and learned Member for North Antrim (Jim Allister) in talking about Wrightbus and the issues around refuelling hydrogen buses. That is something that my constituents know about only too well. The city of Aberdeen was the first city in the United Kingdom to have a fully hydrogen bus fleet. However, it has been off the road since July 2024 because of issues with the refuelling station and the lack of available alternative supply. Although there are significant issues that need to be resolved, the future could and should be very bright indeed for hydrogen-fuelled buses.
The hon. Members for Bath (Wera Hobhouse), Middlesbrough South and East Cleveland (Luke Myer) and Strangford (Jim Shannon) spoke about the opportunities across our United Kingdom of Great Britain and Northern Ireland. They are absolutely right: every community, I suspect, has some industry, business or body involved in the development of hydrogen as a technology and energy source of the future. The hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) raised the important point about ammonia and fertiliser, which is not spoken about enough in these debates. We focus far too often on the energy use of hydrogen and not its added benefits.
I often speak about my own experience of the energy industry. Coming from Aberdeenshire, I have been surrounded by those working directly or indirectly in the oil and gas industry—it is inescapable. Where I am from, the importance of supply chains and economic value to local communities is obvious: everybody knows it, sees it in their high streets and hears about it from their family and friends employed in the sector. However, the oil and gas industry has not succeeded in telling that story beyond the north east of Scotland. In reality, 200,000 jobs across the United Kingdom are reliant on the oil and gas sector and supply chains. The industry touches every constituency in the country.
All that is to say that the conversation around the significance, impact and resilience of supply chains is vital. The future of hydrogen in this country is central to our decarbonisation is central to our decarbonisation ambitions and sustainable future, as well as our industrial future, but it is also shrouded in uncertainty. The commitment and investment in using hydrogen as a solution in hard-to-abate industries, heavy manufacturing, long-distance transport and high-temperature processes began under the last Government.
When we were in government, we kick-started the world-leading hydrogen economy and launched a hydrogen strategy and a 10-point plan. We recognised the significance of hydrogen to decarbonising and the importance to the economy of the supply chain across the country. That supply chain—from utilities to manufacturers, transport, distribution and storage, and from monitoring and control to the fabricators of fuel cell components, end users and decommissioning—plays a vital role in securing a future for hydrogen in the UK and adding value to local economies. We identified attractive opportunities for the UK supply chain on electrolysis package manufacturing, electrical equipment, materials manufacturing and more, with the UK supply chain capable of attaining a market share valued between £4 billion and £5 billion.
If the UK aspires to be a world leader in green technology, as I think we in this House agree we should, we must underpin that aspiration with a strategy to bring down industrial prices. The Government—indeed, any Government—should be ambitious for UK industry, as the Government say they are, in order to make industry in the UK great. This cannot be achieved without cheap energy and energy abundance, which can be secured with hydrogen. British industry cannot be competitive with expensive electricity and with businesses and manufacturers suffering under the burden of levies, as they currently are. We should bring down industrial prices, build new nuclear, eliminate levies on manufacturers and embrace energy abundance. Let us all agree to aspire to manufacture, innovate and export technologies that will drive the world closer to global climate solutions. Hydrogen is at the heart of that.
From steelmaking to shipping, hydrogen’s versatility makes this fuel an exciting prospect and component of our future energy mix. Yet major uncertainty is hanging over the system when it comes to whether hydrogen will be used for home heating. With a decision not due until 2026, the future of hydrogen remains somewhat in limbo. Regardless of the outcome when it comes to hydrogen for domestic heating, the gas grid remains essential. It could be repurposed to transport hydrogen to industrial clusters, power stations and transport hubs. We cannot and must not abandon this vast, valuable national asset. When it comes to distribution, pipelines, road tankers and even ships will be needed to move hydrogen. The existing gas grid could play a transformative role, if it is repurposed effectively.
From production to storage and from distribution to utilisation, hydrogen in the UK heralds a wealth of opportunity. It is incumbent on this Government—and, indeed, on any Government—to create a landscape where the manufacturing industry can thrive and profit and where domestic production capacity can grow. The hydrogen supply chain does not exist in a vacuum; it builds on the legacy of the oil and gas supply chain—the infrastructure, engineering expertise and global logistics that have powered the UK for decades. With the right approach from the Government, it will do so for many decades to come.
The Minister of State, Department for Energy Security and Net Zero (Michael Shanks)
It is a pleasure to serve under your chairship, Mr Betts—and to still be here as the Energy Minister. It is the only Government job that I wanted to do, which is perhaps just as well given how the reshuffle has landed, so it is genuinely a pleasure.
As I have often said, these debates are a great example not only of how we come together to talk about quite complex topics relating to the energy system, but of how this part of Parliament works. I always come out of these debates having learned something, as the shadow Minister said. Sometimes it is quite a niche fact that I am not quite sure what I will do with. I always learn a huge amount from my hon. Friend the Member for Worcester (Tom Collins), given his detailed knowledge of the industry and its practical application, which is often lost in our debates. I thank him and my hon. Friend the Member for Rushcliffe (James Naish), who also worked in the energy sector, and whose constituency was home to Britain’s last coal power station, the closure of which I attended last year. His understanding of the importance of the transition and the potential of future clean energy technologies is hugely welcome.
It has been an interesting debate not least because, as the shadow Minister said, we have had a degree of consensus. We once had consensus on quite a lot of things in respect of the future of our energy system, but that has somehow changed in the last few months. I will leave it to others to judge why that is, but it is really important that, given the huge opportunities for the future of the country and for thousands of jobs, there is a degree of consensus. As the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) said, we get things done when there is a degree of consensus, and that is hugely welcome. The hon. Gentleman referred to Joule’s law on the loss of power, which I think, if my standard grade physics holds up, is P = I2R,. I am sure people will correct me when that is typed up in Hansard.
Let me say a bit about our commitment to hydrogen before I respond to some specific points. We have been clear that hydrogen will play a fundamental role in the future of our energy system. Not only is it a crucial part of how we decarbonise heavy industry and transport, which are among our most energy-intensive and hardest-to-decarbonise sectors, but it is, as many Members have pointed out, part of our work to provide large-scale storage for our baseload of year-round clean power. As the Government have set out in everything we do, our mission to achieve clean power by 2030 and to maintain that relates to tackling the climate crisis, delivering energy security and reducing our dependence on unstable, volatile fossil fuel markets. How we take back control of our energy supply and storage will clearly be a critical part of that. It can also help us to reduce system costs as both electricity demand and renewable generation increase.
There are other great other examples of the use of hydrogen. The hon. and learned Member for North Antrim (Jim Allister) made the really interesting point that the world’s first hydrogen double-decker bus was made in North Antrim, which I had not realised. As the shadow Minister pointed out, there are challenges around how we maintain such innovation and make sure that it continues to work in the future. Last week I was in Denmark to meet European Energy Ministers. It was really interesting to see examples there, as well as at the port of Amsterdam in the Netherlands, of where infrastructure is being rolled out, while facing some of the same challenges about how we achieve the scale that makes it competitive. That is part of the work we will have to do.
We are acting now to seize the economic and industrial benefits of the hydrogen sector, which is why we have been not only pushing forward on our policy framework but trying to make clear our ambition. There is much more to be said about that, but there has been industrial and investor interest in our hydrogen allocation round programme. The first HAR1 projects are now putting spades in the ground, with the first wave expected to access more than £2 billion over the next 15 years in revenue support from the hydrogen production business model, and over £90 million in capital from the net zero hydrogen fund. Over £400 million of private capital has been committed up front for 2024 to 2026, with more than 700 direct jobs created in construction and operation. Those are among the first commercial-scale hydrogen projects in the world to take a final investment decision, and we expect them to become operational between this year and April 2028. That will kick-start our green hydrogen production at scale.
Following the success of HAR1, we expect to announce successful projects in the second hydrogen allocation round in early 2026. The current shortlist includes innovative projects that could support ammonia production in Shetland, produce new clean energy at Grangemouth and decarbonise lime kilns—one of the first steps in cement production—in the Humber area. Moving forward, in June this year we published our industrial strategy, which set out plans for the further hydrogen allocation rounds, HAR3 and HAR4, for our first regional hydrogen network, and for the launch of the hydrogen-to-power business model in 2026.
My hon. Friend the Member for Worcester talked about the crucial role that storage will play in the renewable energy we are building. The question of how we store that for when we need it is crucial. We laid out our plans in the industrial strategy, backed up by the spending review, with £500 million for hydrogen infrastructure, partly to look at how we unlock hydrogen’s potential for clean power and provide home-grown energy and good jobs. We also have an ambition to deploy the first regional hydrogen transport and storage network, to become operational from 2031, which will aim to connect producers with vital end users such as power for the first time. This will unlock hydrogen’s role in clean power and help to realise the potential of large-scale hydrogen storage in maximising renewable energy use to support the transition to a decarbonised energy system. We are also currently designing a hydrogen storage business model, alongside a hydrogen transport business model, with the intention of providing investors with the long-term revenue certainty that many Members have raised in the debate.
There is no doubt that the clean energy transition is the economic opportunity of the 21st century. This is about not just our energy security but, as many hon. Friends have pointed out, how we deliver the good, well-paid, trade-unionised jobs of the future. It is about how we reindustrialise communities that have for too long been left behind. The UK is well placed to be a global leader not only in hydrogen deployment but, crucially, in making sure that we capitalise on the supply chains, which is where we get the jobs, given the shared skills, experiences and qualifications in the existing oil and gas sector, our strengths in advanced manufacturing and innovation, and the policy environment we have set out.
We have taken significant steps to attract inward investment, and the public finance tools set out in the clean energy industries sector plan will play a crucial role. We have also looked at the question of skills, which a number of Members raised earlier. The Lib Dem spokesperson, the hon. Member for Thornbury and Yate (Claire Young), made the point very well. The hydrogen skills framework, which we published just a few months ago in April, is an open-source framework to try to enable the development of new qualifications and training programmes, in conjunction with industry, to make sure that we are bringing forward the apprenticeships and the skilled workers of the future.
We are also making sure that companies can access international markets and collaborate with global partners. We want to build a domestic success story by exporting hydrogen equipment and services across the world and reinforcing their role in global hydrogen supply chains, with the UK set to benefit from being right at the forefront of that work.
As the sector grows, we want to make sure that it benefits from the comprehensive public finance offers that we have set out. I will cover that briefly, because we have debated many of these things in the past. Part of that includes Great British Energy, with its £1 billion clean energy supply chain fund, which will be aligned with the clean energy industries sector plan to support companies that have the potential to grow in supply chains.
We have empowered the National Wealth Fund with a total of £27.8 billion in capital to enable it to take on higher-risk investments, including equity. It will invest in capital-intensive projects, businesses and assets, with at least £5.8 billion on carbon capture, low-carbon hydrogen, gigafactories, ports and green steel over the lifetime of this Parliament. We have also launched £4 billion in British Business Bank industrial strategy capital to scale up the financing package, and we introduced the clean industry bonus following the success in the round that we have just concluded. We are looking at whether we should expand that to hydrogen, and we will consult on that in due course.
We will continue to do all that we can to put the UK at the forefront of the global hydrogen revolution and thereby unlock billions of investment, create new-generation jobs, build the infrastructure and drive the clean growth that we—there seems to have been consensus today—all want to see. This autumn, we will publish the UK hydrogen strategy, which will be evidence-led, impact-focused and designed on the premise of fast-tracking delivery.
Since the publication of the last hydrogen strategy four years ago, the landscape has evolved significantly. Electrification technologies have moved on rapidly, pointing to a more focused and essential role for hydrogen, complementing the electrification that we will see in so much of our energy system. The new strategy will sharpen our priorities, deepen collaboration with industry, which is key to this, and seek to unlock the full potential of hydrogen over the next decade.
Jamie Stone
Does the Minister agree that we should at least check the proposed grid improvements against the possible strategic sites where hydrogen could be made?
Michael Shanks
My very next point was on the future of the network. It wasn’t, actually, but I will come to it now, because the hon. Gentleman made a very good point, which I meant to come back to. He is right, of course, that we need to invest in the grid—even if we were not embarking on this clean power mission, the grid is very much in need of upgrading—but we want to take the strategic planning of that much more seriously than it has been taken in the past.
We know that we need to build significant amounts of grid—the hon. Gentleman recognised the importance of that—but we also want to plan the future of the energy system strategically so that the grid follows a logical way to build out the energy system. His point about trying to make use of the abundance of clean energy to transfer it into hydrogen as an off-taker was well made. It will feed into the work on the strategic spatial energy plan. It is about how we best use all the energy system to our advantage. It is also about how we can reduce things like constraint payments and make use of it as efficiently as possible. That is an important point that we will take forward.
To conclude, our vision is clear: a thriving low-carbon hydrogen economy—one that decarbonises those hard-to-electrify sectors, strengthens our energy security and fuels good jobs and growth across the country—is at the heart of the Government’s mission.
Jim Shannon
I asked a question about the opportunity for apprentices. I know that the Government are committed to that; I have never had any doubt about that, but I want us to show where the opportunities may be. I know that the Minister is also committed to ensuring that all parts of the United Kingdom of Great Britain and Northern Ireland can take advantage.
Michael Shanks
A key part of my conclusion was the useful challenge that there always is from the hon. Member for Strangford (Jim Shannon) about ensuring that we represent all parts of the United Kingdom. He was right to point out earlier that it is a beautiful part of the country to visit. I confess I have still never been to Strangford, but there is still time.
The hon. Member is right on two other fronts. First, the skills strategy is all about unlocking the next generation of workers. We need to inspire people in school right now to see that we want them to be at the heart of the energy system of the future, and apprenticeships are crucial for doing that. We will create tens of thousands of jobs in the sector, but as part of that there has to be investment in apprenticeships. On his wider point, he knows that I enjoy the engagement with Ministers in devolved Governments across the country. We work closely with the Northern Ireland Executive. As I always say, the energy system is transferred in Northern Ireland, but there is a huge number of areas where we can learn from each other and work together to ensure that the people in Northern Ireland and Great Britain benefit from what we are trying to achieve, and we will continue to do that.
To conclude my conclusion, unless anyone else wants to intervene, we are firm in our commitment to working with industry. There is a huge opportunity here. This is an exciting moment for us to recognise—as we are doing with small modular reactors and with floating offshore wind—that we have the potential to be at the forefront of the next great thing in our energy system. It requires the strategy that we are putting in place and the long-term confidence for investment, and we will continue to work hand in hand with industry, investors, innovators, workers—
Michael Shanks
I will not, because I am just about to conclude. We will work with workers and trade unions to turn this vision into reality and ensure that every part of the UK benefits from the potential of growth and jobs in hydrogen and in securing our energy system for the future. I again thank all Members for this hugely constructive debate. In particular, I thank my hon. Friend the Member for Worcester for the way he introduced it and for the knowledge and experience that he brings to all these matters.
Tom Collins
Mr Betts, I will be brief. I am grateful for your generosity with time, and for the generosity of other Members in allowing me to intervene. I thank the Minister for his response. He reasserted the fundamental role that hydrogen will play in our future energy system and the vital need for storage. I really appreciate that. I am excited about the hydrogen strategy, and to see that built with our new Government’s approach to partnership and with a clear vision for our future hydrogen system. That was reflected in his speech when he reasserted our firm commitment to working in partnership with industry.
I again thank my hon. Friend the Member for Rushcliffe (James Naish) for securing this debate and for his continued championing of the energy sector and all our work in it. He is a strong and powerful proponent, and I am grateful to him for the opportunity he has given me today. The debate has reflected the huge opportunity that hydrogen presents for the UK in growing our economy and facing the challenges of decarbonisation and new energy systems. It has reflected the versatility of hydrogen, the importance of building a system where it is abundant, the need for us to support industry not just in classic industrial heartlands but in towns across our country, and therefore the need for us to transition the gas networks to hydrogen in the future as well.
The consensus that we have heard in the room today, for which I am very grateful—I am grateful for all Members’ fantastically knowledgeable contributions—shows that we are at the turning point where this transition is being led by economics rather than debates about technology. Electricity, hydrogen and ammonia form a pyramid of complementary energy vectors whereby we can provide sector coupling, flexibility and a dynamic future energy system that allows rapid and deep decarbonisation. I have had the opportunity to meet representatives of industry and hold workshops with a very diverse cross-section of industry, and the urge for the storage piece to be built urgently and in a decisive way, sponsored clearly by the state, is very clear, with that backed up by transition.
It is not often we hear industry asking Government to be more hands-on, but here they are. The need for that in building storage is very clear. They want Government to have a very clear vision and high ambition, and the Minister has been good today in helping to articulate that on the Government’s behalf. We are a Government of partnership, and now is the moment to build on that partnership and break down silos. In taking these steps, now is the moment when we can change gear, put our foot on the gas and bring about a rapid and ambitious transformation of our hydrogen supply chains.
Question put and agreed to.
Resolved,
That this House has considered hydrogen supply chains.