UK-Germany Hydrogen Partnership: A Step Towards a Greener Future

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In a significant move towards bolstering renewable energy cooperation, UK Prime Minister Rishi Sunak and German Chancellor Olaf Scholz have agreed to a formal feasibility study on the trade of renewable and low carbon hydrogen between the UK and Germany. This initiative aims to explore the infrastructure, regulatory, technical, and commercial aspects necessary to facilitate hydrogen export, mirroring the ambitious NeuConnect electricity pipeline project.

Scope of the Study

The feasibility study will evaluate various infrastructure options, including potential pipeline locations and the necessary steps to enable future hydrogen trade. This comprehensive assessment will consider the regulatory, technical, and commercial perspectives essential for establishing a robust hydrogen export framework. Just as the £2.4 billion NeuConnect project connects the UK and Germany with 700 kilometres of subsea electricity cables, the hydrogen pipeline project aspires to create a similar connection for hydrogen, enhancing energy security and addressing climate change challenges.

Expected Outcomes

The primary outcome of this study is to enable both the UK and Germany to scale up their hydrogen economies, aligning with their Net Zero ambitions and decarbonising industries. The study aims to support:

  • Closer business collaboration.
  • Development of hydrogen trade and transport infrastructure.
  • Establishment of a regional hydrogen market.

Together, the UK and Germany are leading Europe’s shift away from Russian hydrocarbons, developing alternative energy sources to enhance energy security. As Politico aptly put it, "Russian gas is increasingly off the menu."

Global Impact of UK-Germany Hydrogen Collaborations

The Joint Declaration of Intent (JDoI) underlines the commitment of the UK-Germany Hydrogen Partnership to:

  • Accelerate the deployment of hydrogen projects for industry and consumers.
  • Establish international leadership in hydrogen markets.
  • Advance research and innovation, promoting hydrogen trade and investment along the entire value chain.
  • Deliver joint market analysis to support planning and investment.

A working group comprising representatives from Germany's BMWK and the UK's DESNZ is actively developing these initiatives, consulting with industry and hydrogen advisory councils from both nations to ensure comprehensive and effective strategies.

Opportunities for Investors in UK Hydrogen Policies

The UK aims to achieve up to 10GW of low carbon hydrogen production capacity by 2030, with more than half derived from electrolytic hydrogen. By 2025, the UK intends to have up to 1GW of electrolytic hydrogen either under construction or operational. This ambitious target supports energy security and the country’s net zero goals by 2050, while presenting substantial economic opportunities for investors across the UK’s industrial regions.

The UK’s Hydrogen Strategy outlines a holistic approach to promoting the hydrogen economy, encompassing production, demand, transport, and storage. This strategy aims to provide maximum clarity on government support, fostering private sector investment across the value chain. By 2030, the UK's hydrogen sector could support over 12,000 jobs and attract up to £11 billion in private investment, highlighting the significant economic gains from investing in the UK’s energy transition.

The UK as a Key Hydrogen Exporter

With established energy trading frameworks and geographic proximity to continental Europe, the UK is well-positioned to become a leading exporter of hydrogen and related goods and services. The UK Government’s announcement in December 2023 of 11 major new hydrogen projects, adding 125MW of capacity and over £400 million in investments over the next three years, underscores the country’s commitment to this goal. The second Hydrogen Allocation Round (HAR2) is now open for applications, aiming to support up to 875MW of low carbon hydrogen projects.

In Conclusion

The UK-Germany hydrogen partnership represents a pivotal step in the global energy transition. By fostering closer collaboration, enhancing infrastructure, and driving innovation, this initiative not only supports the Net Zero ambitions of both nations but also sets the stage for a greener, more sustainable future. Investors and stakeholders in the hydrogen economy stand to benefit significantly as the UK positions itself as a central player in the global hydrogen market.

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