Only 2% of British businesses investing in hydrogen

Just 2% of British businesses are currently investing in hydrogen technology despite almost two-thirds (59%) planning to explore hydrogen-based fuels and technologies in the future.

According to research from Centrica Business Solutions, the main barrier holding businesses back from investing in hydrogen is a perceived lack of technology maturity.

Despite the lack of investment, the research report – entitled How to tackle risks on the path to net zero – reveals that almost a quarter (24%) of businesses are working towards implementing hydrogen solutions by actively developing capabilities or putting contracts in place.

On the perceived lack of technology maturity, the report concludes that “the idea that the technology is not ready is a myth – and it is stopping too many organisations from acting”.

It warns that “organisations that don’t keep up-to-date with industry knowledge and technology upgrades will risk falling short of compliance and exposure to higher emissions costs”.

“Supply of blue and green hydrogen has not yet reached the cost and scale that would make them widespread, but CHP [combined heat and power] systems that currently run on coal, natural gas or biomass can be repurposed to use hydrogen blends,” the report adds.

The research – based on survey responses from 300 senior executives – also found that one in 10 businesses have started developing capabilities to adopt green hydrogen, where energy is derived from renewables, in their business.

Justin Jacober, director at Centrica Business Solutions, said that “it’s only a matter of time” before hydrogen becomes more widely deployed adding that there “is clearly an appetite among businesses to adopt a hydrogen pathway”.

“The transformative potential of hydrogen power systems is no secret. It will play a vital role in achieving a secure, decarbonised power system fit for the future,” Jacober added.

“It’s clear that there is still a long way to go before hydrogen can challenge traditional energy sources.”

Earlier this year, UK hydrogen champion Jane Toogood published a report that outlines recommendations on the steps to kickstart an industry in the UK. These include making a strategic decision to support the blending of hydrogen into the gas transmission network this year and confirm suitable arrangements for support.

In response a coalition of 20 organisations including Octopus Energy, E3G and the UK Green Building Council called on the government to reject Toogood’s recommendations, which they claim are “misleading” and would drive up consumer bills.

Since Toogood’s recommendations were published the government has moved forward with its consultation on blending hydrogen into the existing gas networks.

The consultation is seeking views on all aspects of hydrogen blending, from its impact on customer bills to potential support mechanisms.

The document adds that if the government does decide to proceed with blending then it does not anticipate it to be implemented at a commercial scale before 2025-26, at the earliest.

Should it decide to go ahead with blending, the government has also thrown its weight behind a Contracts for Difference-style framework to support its implementation.