Source · Select Committees · Business and Trade Committee
Recommendation 33
33
Deferred
Paragraph: 153
Confirm hydrogen storage project deliverability by 2030 and outline the achievement strategy
Recommendation
Whilst the Government’s commitment to delivering hydrogen storage business models by 2025 is welcome, it appears that this could be too late to allow the development of hydrogen storage projects so that they are in operation in time to meet the Government’s target for 10 GW of hydrogen by 2030, given possible lead times of seven to eight years. In response to this report, the Government should confirm whether it still believes that hydrogen storage projects can be delivered by 2030 and, if so, how that will be achieved.
Government response summary AI-generated
The government's response details Ofgem's RIIO-ED2 price control, funding for electricity distribution network upgrades to support electric vehicles and heat pumps, and Ofgem's consultation on future network regulation, completely failing to address the recommendation regarding hydrogen storage delivery by 2030.
Summary of the government's response below — read the verbatim text to verify.
Paragraph Reference:
153
Government Response
Deferred
HM Government · verbatim extract
Deferred
77. In the British Energy Security Strategy, the Government committed to designing a hydrogen storage business model by 2025, to support the growth of the hydrogen economy. 2025 is an ambitious but achievable timeline for designing a complex business model. The model needs to provide both investor certainty and value for money for government, so as to support critical transport and storage projects. In order to progress work to meet this commitment, the Government ran a consultation on the high-level design options for the hydrogen storage business model between August and November 2022. The Government response to this consultation is expected to be published shortly. The Energy Bill has been amended to provide a legislative framework underpinning the delivery of a hydrogen storage business model. It is estimated that a salt cavern purpose built for hydrogen storage will have a build time of 5–10 years, while a converted salt cavern will have a build time of between 3–5 years. Based on these timelines, it is feasible that some hydrogen storage projects could be operational by 2030 if a storage business model is designed by 2025. 78. Ahead of business model support being available, the Government has created several measures to support the development of storage assets through existing government programmes. For example, the Net Zero Hydrogen Fund and Low Carbon Hydrogen Agreement will provide limited funding for costs of associated storage infrastructure for hydrogen production projects. A new approach to strategic planning for hydrogen storage infrastructure is also being developed as a priority. This will help identify and prioritise early strategically significant projects, which will inform the allocation of the storage business model. 79. Hydrogen storage will be essential for the growth of the hydrogen economy. However, any projects that are awarded production contracts to be operational before a date when any storage facilities supported by a storage business model contract would be operational, will, by design, not need storage supported by the storage business model. We therefore do not anticipate that the current storage business model timelines will put the 10GW ambition at risk.
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