Hydrogen in North East Scotland

Sector and market opportunity

The urgent transition to a clean economy is driving demand for low-carbon hydrogen. The UK’s twin-track approach, supporting blue and green hydrogen, will allow the hydrogen sector to develop both supply and demand ahead of its competitors.

Perfect for capital and foreign investment, Scotland has massive production, distribution and export potential in this emerging sector. It also has significant opportunities on the demand side through hydrogen for transport, hydrogen for heat and feedstock for the chemicals industry.

Growth prospects

The global hydrogen market is expected to grow substantially in both the near and long-term. Demand for hydrogen has already grown more than threefold since 1975 and, by 2050, the sector could have a potential global revenue of $2.5 trillion, with some estimates up to $11.7 trillion.

UK hydrogen demand is expected to reach 38 terrawatt-hours (TWh) by 2030, rising to 165TWh in 2035 and 460TWh in 2050.

Location

Scotland is perfectly placed to meet a significant proportion of Europe’s hydrogen demand, which could reach 700 TWh annually by 2050. Strategically positioned on the North Sea, Scotland has strong clusters of offshore and onshore wind, oil and gas, maritime, chemicals and gas distribution.

The North Sea also has enough CO2 storage capacity to support the UK’s demands for hundreds of years. These assets provide the necessary expertise and infrastructure for Scotland’s hydrogen sector to flourish.

Connectivity

You can easily travel anywhere in the world from Scotland, with flights to major cities in the UK and globally accessible via international airports in Aberdeen, Glasgow and Edinburgh.

Rail and road networks connect the northernmost reaches of Scotland to its main cities and the rest of the UK, while ports line the coastline. Ports include high-potential areas for hydrogen in Aberdeen, Peterhead, Shetland, Grangemouth, Cromarty Firth and Kirkwall.

Local talent and skills

There are 115,000 people working in the oil and gas industry in Scotland and 46,500 in low carbon, 2 areas with transferrable skills into hydrogen.

Over 1,100 companies in Scotland are either already involved in, or have indicated an interest in, the hydrogen sector. 697 of these are in the north-east.

Research is aimed at delivering energy and cost-efficient processes for blue and green hydrogen production. It’s also focused on the feasibility of blending 20% hydrogen into the gas grid, which will potentially help create 100% hydrogen networks.

Sector support includes the Scottish Hydrogen and Fuel Cell Association, Scottish Enterprise, Highlands and Islands Enterprise and South of Scotland Enterprise.

Research and expertise

Scotland has highly-regarded universities and research opportunities, giving access to a skilled current and future workforce, as well as technological innovation. The Energy Technology Partnership is a collaboration of 11 Scottish universities that is currently driving research and innovation focused on hydrogen.

World-leading innovation is also taking place in demonstration projects including H100, Acorn, Dolphyn and the Zero Emissions Train Programme, plus test sites such as the Energy Transition Zone and Cromarty Firth.

Enabling clean growth

The UK’s commitment to net zero is driving national hydrogen demand. Recent technological advancements and the scale-up of renewable energies are also leading to cost reductions and facilitating the production of electrolytic green hydrogen.

These factors – alongside hydrogen’s versatility in storage, transport and applications – have generated an announced pipeline of around 18.7 gigawatts (GW) of low-carbon hydrogen capacity in Great Britain through 2037, much of it across Scotland.

Local and national government support

Scotland was the first UK nation to set out a policy statement on hydrogen, outlining an ambition for 5GW of installed clean hydrogen production capacity by 2030 and 25GW by 2045. It is supporting the sector with £100 million through government funding and the upcoming Hydrogen Action Plan.

The UK government has launched numerous initiatives including the Hydrogen Strategy, Net Zero Hydrogen Fund, Hydrogen Business Models Consultation and the Ten Point Plan.

Success stories

HydraSun

Based in Aberdeen, Hydrasun is a recognised market leader in the provision of integrated fluid transfer, power and control solutions to energy, original equipment manufacturer (OEM), marine, renewables and defence industries worldwide.

With expertise and experience developed in the offshore oil and gas industry, Hydrasun has successfully moved into the green energy sector, offering a diversified range of products and services.

Arcola Energy

Arcola Energy is one of the fastest-growing hydrogen technology companies in the UK. It is establishing a significant base at the Michelin Scotland Innovation Parc (MSIP) in Dundee and works with some of the most progressive local authorities, fleet operators and OEMs to meet their zero-emission targets.

It does this by delivering hydrogen fuel cell technologies for buses, HGVs, trains and clean energy systems. Arcola Energy has secured government funding to lead the Scottish Hydrogen Fuel Cell Freight Trial (ShyFT).

Howden

Howden is a global leader in compression technology. Headquartered in Scotland, the company plays a key role across the hydrogen value chain with its industry-leading broad compression technologies and solutions.

Howden has been involved in many hydrogen projects globally, including the world’s largest hydrogen refuelling station Hypower in China.