Hydrogen and the updated draft energy national policy statements

United Kingdom

Further to our recent LawNow giving an overview of draft EN-1 (available here), this follow-on piece gives more of a direct insight to Hydrogen and how the Government envisages that it will contribute to decarbonisation.

Draft EN-1 repeats the targets for hydrogen from BESS, with 10GW targeted by 2030 and with at least half of that being from electrolysis (i.e. ‘green’ hydrogen). The government’s commitment to design new business models for hydrogen transport and storage infrastructure by 2025 is also re-iterated in draft EN-1. This is against the backdrop of the Impact Assessment for CB6, which showed an illustrative range for low carbon hydrogen of 85-125TWh in 2035 and 250-460TWh in 2050. The recognition of the urgent need for low carbon hydrogen infrastructure is welcome. EN-1 notes that the Government considers a twin track approach of developing both ‘green’ and ‘blue’ hydrogen will be needed in order to meet necessarily levels of production to be in line with net-zero targets.

One particularly important development is the fact that the Secretary of State will expect applicants to consider foreseeable future demand when considering the size and route of their investments. There is an express recognition that applicants may therefore propose pipelines with a greater capacity than demand might suggest at the time of consenting. Given the potential for a new hydrogen network to facilitate the Government’s objectives, this is an important policy development and should allow for delivery of scenarios of least regret.

As noted in our previous LawNow (referenced above), the Government has re-stated their commitment to reaching a decision on blending in 2023, but draft EN-1 contains recognition that the Government see hydrogen playing a different role, specifically decarbonising end users who may not be able to decarbonise through electrification. It is clear that the Government does not want blending of hydrogen into the gas network to prejudice this and it is emphasised that any design of potential financial support for hydrogen producers will reflect this more specific intention for hydrogen production.

It is also important to note that there are numerous other references to hydrogen throughout the suite of NPSs. For example, there is recognition in draft EN-3 that associated infrastructure may include both energy storage and electrolysers associated with the production of low carbon hydrogen.