Sustainable Scotland: DeCarbScotland hears green hydrogen is critical element in country’s future energy mix

Advertisement feature: The DeCarbScotland conference, held last week in Edinburgh, heard that utilising the fuel source is imperative for hitting our 2045 net-zero target, writes David Lee

Green hydrogen can be a central part of Scotland’s energy mix by 2030 – but there is work to do to reduce costs and risks, develop markets and increase public acceptance.

The DeCarbScotland conference, held last week at BT Murrayfield in Edinburgh, heard about the potential use of green hydrogen by industry as a fuel source to help it decarbonise. Reducing industrial emissions is key to Scotland meeting its 2045 net-zero target – five years ahead of the rest of the UK.

Hydrogen is a clean energy source, produced by splitting water by electrolysis. The process only emits water vapour and leaves no residue in the air, unlike coal and oil. Green hydrogen is the name given to hydrogen produced using renewable power, such as wind or solar.

DeCarbScotland conference told the adoption of green hydrogen is imperative for hitting the country’s 2045 net-zero targetDeCarbScotland conference told the adoption of green hydrogen is imperative for hitting the country’s 2045 net-zero target
DeCarbScotland conference told the adoption of green hydrogen is imperative for hitting the country’s 2045 net-zero target

Richard Cockburn, a partner at law firm Womble Bond Dickinson, believes the adoption of green hydrogen could be an important part of Scotland’s energy future.

Also important to Scotland’s energy mix would be an early “green light” from the UK Government for the Scottish Cluster – a coalition set up to address industrial decarbonisation. The event heard how the cluster’s plans to capture and store carbon could prevent five million tonnes of carbon dioxide entering the atmosphere.

As part of this effort, the UK Hydrogen Strategy wants to increase low carbon hydrogen production capacity to 10GW by 2030 – with the Scottish target being 5GW by the same year.

Cockburn said this aspiration was supported by the publication in late 2022 of an updated green hydrogen business model – “effectively a 15-year contract with revenue support” – while the announcement of which applications to the Net Zero Hydrogen Fund have been successful, expected soon, would show which kind of hydrogen projects are emerging and would get revenue support.

NECCUS Decarb Scotland Conference 2023 held in Edinburgh was told: Reducing industrial emissions is key to Scotland meeting its 2045 net-zero target – five years ahead of the rest of the UK.NECCUS Decarb Scotland Conference 2023 held in Edinburgh was told: Reducing industrial emissions is key to Scotland meeting its 2045 net-zero target – five years ahead of the rest of the UK.
NECCUS Decarb Scotland Conference 2023 held in Edinburgh was told: Reducing industrial emissions is key to Scotland meeting its 2045 net-zero target – five years ahead of the rest of the UK.

Molly Iliffe, global head of hydrogen at Baringa, outlined what needs to happen in order to move forward, saying: “The development of the hydrogen economy can be accelerated by reducing uncertainties and addressing missing links regarding commercial business models.”

Iliffe added that creating a clear demand for hydrogen was “absolutely critical” and industrial decarbonisation work led by event sponsor NECCUS was at the heart of this: “There are enormous opportunities to share facilities and infrastructure, between a number of partners, and this can reduce the cost and risk for everyone.”

Most developers required an “anchor demand” for hydrogen, generally located very close to where the hydrogen was produced, if a project was to succeed, she added, although this is expected to change as a global market for hydrogen develops.

Large-scale storage of hydrogen, transport infrastructure, financing and public acceptance were all important factors for future success, Iliffe explained: “For early-stage projects, initial grant funding has been critical to success. Looking ahead, we can see a route to commercial viability for large-scale projects, but we have a gap in the middle for pre-commercial projects, and it’s uncertain that sufficient funding will be made available. That’s a gap in the market.

“We’re expecting rapid growth and maturation of the industry over this decade, but at the moment, only about 5 per cent of projects have reached a final investment decision.”

Iliffe also said more work was needed on stakeholder support: “There are some great examples [such as SGN’s H100 Fife project], but there is also negative publicity. I saw an article recently, where people in Whitby said they feared for their lives because of hydrogen being brought into [their community].”

The Inflation Reduction Act in the US had seen “a lot of developer interest and focus shift into that market”, Iliffe said. “Instead of stop-start grant funding arrangements in the UK and Europe, where it’s very difficult to have certainty over project timelines and available funding, you can shift focus to the US and have a lot of clarity at one stroke,” she explained. “But, in general, we expect the global market to continue to develop and a shift from local projects to hydrogen becoming a globally traded commodity. Rapid cost reduction is expected with several applications for hydrogen becoming economically competitive in Europe by 2030.”

However, volatile natural gas prices were an issue, as they comprise 60 per cent of the cost of blue hydrogen and so could affect the viability of blue hydrogen – which, unlike green hydrogen, creates CO2, which is then captured and stored – and could “change the dynamics in terms of whether blue and green hydrogen make commercial sense”.

Iliffe added: “The intermittency of green hydrogen is also a challenge. Although markets like transport are really important, the demand is very uncertain, and that introduces uncertainty for developers. For industry, the offtake is much more certain, but offtakers need firm supply and so projects must incorporate expensive storage. We don’t have large-scale hydrogen storage infrastructure in the UK, and storage for individual projects is extremely expensive.”

She highlighted a major opportunity for Scotland in creating green hydrogen from offshore wind, with production becoming increasingly viable as wind farms move further from shore. This could also help offshore wind in remote locations with high grid charges – and potentially no grid connection at all – get to market by generating hydrogen offshore, bringing ashore cheaply and converting it to a fuel vector or carrier to transmit energy.

Iliffe said: “Liquid organic hydrogen carriers could be really interesting solutions because they enable the repurposing of existing infrastructure for hydrogen storage and transport.

“A number of studies are looking into this. There will still be an important role for other carriers; for example, ammonia has early-mover advantage and an existing supply chain and market. Several European ports are developing large-scale import infrastructure for hydrogen, which is critical for Scottish projects as we look to develop bulk hydrogen production and export to markets in Europe.”


HYRO, a joint venture between renewables giant RES and Octopus Energy Generation, has pledged £3 billion investment in green hydrogen projects before the end of the decade. Three projects in the UK are well-advanced, said Tracy Scott, pictured, development director for green hydrogen at RES – at two paper mills and a distillery.

She told the DeCarbScotland conference: “The partnership will deliver home-grown, reliable, cost-competitive green hydrogen to decarbonise the industrial sector.”

Scott added that RES, which has developed 23GW of renewable energy globally, had always been a pioneer – building its first wind farm in 1992 (only the second to be built in the UK), and its first battery storage project in the US in 2014.

The company was also developing green hydrogen projects in Sweden, with two active projects in development, as well as the US, Canada and Australia. “We’re able to collaborate between our colleagues in our different geographies, to learn from what they’re doing and share knowledge and ideas.”

Scott said Octopus also brought real expertise to the HYRO joint venture as a “very knowledgeable and experienced” financer of renewable projects and “a very consumer-centric and technology-driven company”. She added: “Their approach to green hydrogen has been the same as the rest of the green energy portfolio. Do it, better and faster, and more reliably.”

Scott said that as a joint venture, RES and Octopus are well placed for structuring these deals because of access to new renewable energy assets coming from both businesses, providing “a big pool of green electricity to be able to tap into to power our electrolysers” [which split water into hydrogen and oxygen]. RES and Octopus are both technology-driven and have developed several tools to design and optimise green hydrogen projects: a hydrogen production calculator; a break-even price and efficiency calculator; a hydrogen optimizer, with hundreds of variables to streamline the design process; and a green electricity optimiser to ensure the green hydrogen produced complies with low carbon standards.

HYRO is working very closely with industrial partners in various sectors – including paper, steel, whisky, brewing, glass, and sustainable aviation fuels – looking at specific sites.

“All three projects currently use natural gas boilers to provide heat for their process,” Scott said. “They are looking to decarbonise by replacing [them] with hydrogen-ready boilers. We want to develop hydrogen electrolysers on their land, with the electrolysers grid-connected to use green electricity to produce green hydrogen, and they will pipe the hydrogen from the electrolytic plant to the boiler room.”

The three projects will see planning applications submitted in the next few months. They range from 7.5-15MW of electrical input, but “a further portfolio of projects coming through are much larger, 100MW and beyond,” Scott said.She concluded: “The future for green hydrogen from an electrolytic source is really very interesting.”


The Highlands could be the pioneer of hydrogen rail transport in the UK, Luke Johnson, managing director of H2 Green, pictured below, told the DeCarbScotland conference.

H2 Green hopes to develop two sites producing hydrogen, in Inverness and Sussex, by 2025. “We’ll be producing two and a half tonnes a day and start expanding nationally,” Johnson said. He added that H2 Green is also looking at different forms of transport that could be suitable for hydrogen in the Highlands – buses, trucks, refuse collection vehicles and trains.

There are also opportunities with smaller vehicles in the region because electrification does not work as well in areas with cold climates, mountainous terrains and long travel distances. “That creates opportunities for hydrogen,” Johnson said.

There were challenges with the “different demand profile” in remote locations, he continued. “Unlike a liquid fuel, if we’re going to dispense [hydrogen], we need to know the scheduling of the customer pick-up. We can’t have a system where a [fleet of] trucks will all be back to refuel between 5-6pm, then not visit for the rest of the day – unless we have enormous storage and capability to dispense it all in one go. Understanding customer behaviour is essential.”He said the Highlands could pioneer the UK’s first hydrogen train because it was economically difficult to put in overhead electrification due to significant upgrades required to bridges and tunnel systems”.

Hydrogen offers an “interesting solution”, he told the event, and introduced the idea of a hybrid approach on the rail line between Inverness and Aberdeen – stretches of overhead electrification, alongside charging trains with onboard batteries.

H2 Green has worked with rolling stock company Eversholt to map train movements in the Highlands against projected hydrogen demand. Johnson explained: “Instead of a truck receiving 10-20 kilogrammes of hydrogen, a train would receive 200-300 kg, all of which needs to be dispensed within half an hour, which has a significant impact on the way we design that distribution system.”

Johnson said one of the challenges with green hydrogen was scale: “We could potentially reduce a lot of transport with [hydrogen], and produce it wherever we have a hose pipe and power point. But that’s not necessarily going to be particularly economic at small-scale. So we apply essentially the same technology I’ve used for many years as a geologist [working in oil and gas], where we layer all the components associated with infrastructure and costs – and customer movements – to identify and hone in on opportunities.

“We assess the different possible interactions to understand the optimum design, carry that through into planning and, ultimately, get to the point where we’re at an investment-ready position.

“In a very active industry like wind and solar, a developer like myself would exit at that point, essentially monetise that developer fee, and others will come in to buy into that project.

“With hydrogen, I think early-phase projects will see developers like myself carry through beyond the developer-exit option, at least in the early phases, before transactions start to occur, and mirror what we see in wind and solar. So we’re preparing to build, execute, and operate those assets.”

Johnson said H2 Green was heavily data-driven: “We create a geospatial economic model where we can see what the demand will look like, what costs and infrastructure upgrades are required, and how we interact with the grid.”He called for pragmatism in developing green hydrogen, as the “reality of industrial operations means green hydrogen won’t be as green as it possibly can be”.

H2 Green already has two employees in Europe, where the hydrogen market is much more mature, but Johnson is optimistic about the Highlands.

He said: “Working with Highland Council, we’re looking at providing hydrogen across a regional network. We believe that we’ll be able to create the first comprehensive regional hydrogen system – particularly for commercial transport – in the UK.”