Asked by: Richard Thomson (Scottish National Party - Gordon)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, whether his Department has a preferred option for securing cost-effective UK hydrogen storage; and what assessment it has made of the potential merits of (a) repurposing existing salt caverns, (b) repurposing depleted gas fields and (c) building new storage capacity.
Answered by Greg Hands
The Hydrogen Strategy, published on 21st August set out that hydrogen storage, for example in salt caverns or depleted gas fields, can support the hydrogen economy in a range of ways that position it as a strategic asset as part of a fully decarbonised, net zero economy.
The Strategy made clear that there is still much work to do to understand, develop and scale up hydrogen storage infrastructure as both supply and demand grow. It committed to a review of systemic hydrogen storage requirements in the 2020s and beyond.
The Government’s review will assess the need for hydrogen storage and what form this might take. It will also consider whether funding or other incentives are needed, and whether further government regulation might be required to ensure that hydrogen storage infrastructure is available when needed.
This work, in addition to other work we are undertaking with technology developers, regulators and other industry stakeholders will help inform future Government policy on hydrogen storage. Government intends to provide an update on its review in early 2022 to facilitate further discussions with stakeholders.
Alongside its Hydrogen Strategy, the Government also published the Hydrogen Business Model consultation. The consultation includes specific questions on the treatment of small-scale storage within the Hydrogen Business Model, as well as on the potential need for a separate Government intervention to facilitate investment in future larger scale storage. Responses to these questions will also help inform our hydrogen storage review.
Asked by: Richard Thomson (Scottish National Party - Gordon)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what assessment his Department has made of the need for hydrogen storage to manage fluctuations in (a) production and (b) consumption in supporting the Government’s pathways to net zero.
Answered by Greg Hands
The Hydrogen Strategy, published on 21st August set out that hydrogen storage, for example in salt caverns or depleted gas fields, can support the hydrogen economy in a range of ways that position it as a strategic asset as part of a fully decarbonised, net zero economy.
The Strategy made clear that there is still much work to do to understand, develop and scale up hydrogen storage infrastructure as both supply and demand grow. It committed to a review of systemic hydrogen storage requirements in the 2020s and beyond.
The Government’s review will assess the need for hydrogen storage and what form this might take. It will also consider whether funding or other incentives are needed, and whether further government regulation might be required to ensure that hydrogen storage infrastructure is available when needed.
This work, in addition to other work we are undertaking with technology developers, regulators and other industry stakeholders will help inform future Government policy on hydrogen storage. Government intends to provide an update on its review in early 2022 to facilitate further discussions with stakeholders.
Alongside its Hydrogen Strategy, the Government also published the Hydrogen Business Model consultation. The consultation includes specific questions on the treatment of small-scale storage within the Hydrogen Business Model, as well as on the potential need for a separate Government intervention to facilitate investment in future larger scale storage. Responses to these questions will also help inform our hydrogen storage review.
Asked by: Richard Thomson (Scottish National Party - Gordon)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what assessment his Department has made of the potential effect of hydrogen storage on (a) price volatility and wholesale natural gas prices, (b) the liquidity of the gas market, (c) security of supply and dependency on gas imports, (d) regional economies and integration and (e) the cost of mothballing and/or decommissioning existing depleted gas fields.
Answered by Greg Hands
The Energy White Paper sets out that natural gas has an important and on-going role to play in the future as we decarbonise our energy system. Even as work progresses with the move to a low carbon economy, energy security remains an absolute priority and Government will continue to engage with industry to ensure supply is balanced with demand.
BEIS is working with industry to explore the future role of hydrogen storage in meeting the net zero target. The UK Hydrogen Strategy provides Government’s thinking around the role of hydrogen storage, and its plans to assess whether further regulation or support mechanisms are needed.
Though it is still too early to establish the role hydrogen storage will play, and the impact the production of hydrogen and the potential need for hydrogen storage facilities might be leading to 2050, BEIS continues to work with stakeholders to determine the future of the gas system, the market and any consideration around costs in meeting the net zero target.
Asked by: Richard Thomson (Scottish National Party - Gordon)
Question to the Department for Business, Energy and Industrial Strategy:
To ask the Secretary of State for Business, Energy and Industrial Strategy, what steps his Department is taking to help ensure that industry in Scotland has access to (a) carbon capture and storage and (b) hydrogen production infrastructure required to meet Scottish and UK decarbonisation targets by 2045 and 2050.
Answered by Anne-Marie Trevelyan
Last month, Government accepted the Committee on Climate Change's Carbon Budget 6 recommendation; this is a significant step in the UK's global climate leadership and CCUS and hydrogen will be critical to meeting these important commitments.
In May this year, the Department for Business, Energy and Industrial Strategy set out the details of the Carbon Capture, Usage and Storage (CCUS) Cluster Sequencing Process. Through this process, government will look to identify at least two CCUS clusters whose readiness suggests they are most naturally suited to deployment in the mid-2020s, as part of our efforts to identify and support a logical sequence of deployment for CCUS projects in the UK. Projects within the clusters will have the first opportunity to be considered to receive any necessary support under the government’s CCUS Programme including access to the £1bn CCS Infrastructure Fund, business models for Transport & Storage, power, industrial carbon capture and low carbon hydrogen. Further details on the revenue mechanisms to bring through private sector investment via these business models will be set out later this year.
We will continue to engage with each of the devolved administrations to develop our approach the delivery of CCUS across the UK. In order to facilitate this work, we continue to be open to any CCUS projects across the UK identifying themselves to us.
The UK has expertise and assets to support both electrolytic (green) and Carbon Capture Utilisation and Storage (CCUS) enabled (blue) hydrogen production. Our twin track approach will drive cost effective supply volumes in the 2020s in line with our 2030 ambition, whilst scaling up green hydrogen. This ambition will be supported by a range of measures, including a UK wide £240 million Net Zero Hydrogen Fund, and our hydrogen business model. We will be consulting shortly on these measures, alongside the publication of the Hydrogen Strategy. We are working closely with the Devolved Administrations, including the Scottish Government, to help realise the economic and decarbonisation benefits that a UK hydrogen economy will bring.
We have also supported the development and deployment of projects within Scotland’s industrial cluster that will deliver low carbon technologies and enabling infrastructure. Through the Industrial Decarbonisation Challenge, Scotland’s Net Zero Infrastructure Programme (SNZI) received £31.3m in March this year from the Industrial Strategy Challenge Fund.