Oct 28, 2021
Green hydrogen revolution needs £13bn private finance
Green hydrogen revolution needs £13bn private finance : Nearly £13 billion of private investment is required to carry out the government’s vision of a green hydrogen revolution.
That’s as reported from a new study from LCP, alleging that if this financing is not made, the hope of building 26GW of green hydrogen facilities by 2050 will not occur.
The research does warn about this with the fact government will have to supply further financial backing, as the market develops.
It shows that government help of among £500 million to £1 billion per GW of hydrogen electrolyser will be required to guarantee the technology can be distributed profitably.
The research evaluates that 15GW of electrolysers by 2040 will be conveyed & this amount will attain 26GW by 2050.
It estimates that 105GW of wind & solar energy capacity will be on the UK’s network by 2040 & that renewable generation will override need in 44% of the hours; leaving 57TW of extra renewable energy that can be used to make green hydrogen.
It says that if the appropriate levels of government & private investment are made in the following 2 decades, by 2040, most projects will turn into sustainable with no support.
Chris Matson, Partner at LCP, stated: “Green hydrogen is set to play a crucial role in the net zero transition but as more electrolysers are built & compete with each other, their profitability becomes susceptible to cannibalisation.
“Due to the high levels of excess wind & solar energy we expect to see over the coming decades, it makes sense for the industry & government to invest in large amounts of electrolysis to maximise system benefits and our analysis shows that 26GW by 2050 would be needed.
“This will need government support but will be more cost effective than building & supporting more renewable assets for similar outcomes.
“The government is quite rightly consulting on a future Contracts for Difference model to apply to the hydrogen sector. As our analysis shows, some electrolyser projects could need up to £1bn of support from the government over their lifetime. Investors will be keen to see how this support will play out so that a green hydrogen revolution can become a sustainable reality.”
Green hydrogen revolution needs £13bn private finance
