UK Minister bundles up £390m in mostly hydrogen innovation

An interesting debate in the UK parliament back in July on supporting British steel making has leaked out into the real world via a government press release which initially appeared to be about making environmentally friendly gin this week.

It was issued by the Department for Business, Energy & Industrial Strategy, and said among other things that it would spend £250 million from the Clean Steel Fund to eliminate emissions from the UK steel industry which is supposed to account for 15% of industry emissions, by transitioning it to using hydrogen.

But wait a moment there is no such thing as the Clean Steel Fund, so this, in effect, was the UK promising to create it. But it turns out that the UK already spends €250 million in an EU research fund for coal and steel, which is paid for by industry levies. This will be returned to the UK if and when it leaves the EU and this is its new name. Somewhere in there the Euro sign became a pound sign.

In July in Parliament the BEIS Minister said that a practical use for that money would be investment in the UK’s steel sector’s future. Of course that could all change if the UK fails to leave the EU without a deal, something which most UK political parties are planning to stop, and also if it leaves with a deal, that money is likely to continue to be paid into EU initiatives for the next two years, so the funding genuinely would be new in that case.

It is in affect one of the many promises Boris Johnson’s UK government is making right now, seen widely as evidence of its intention to go to the polls and a full scale election any week. Not to mention the fact that the main UK manufacturer of steel, British Steel, is currently in the hands of the public receiver, which is slowly selling off the more profitable parts right now, and this money is clearly aimed at British Steel.

But for what it’s worth the spend referenced yesterday amounted to £390 million, including the £250 million to convert UK Steel production to being hydrogen based, and a further £100 million to stimulate the hydrogen economy. The release looks at the potential for the UK to lead in a new hydrogen economy, likely to be a multi-billion pound industry and the release says that this and other clean energy initiatives will create 2 million jobs.

The headline act was the HySpirits project which will convert one gin distillery in the Orkneys in Scotland from using liquid petroleum gas to using hydrogen, which will come from the third fund, a £20 million fund each for hydrogen manufacture and another for switching to it as a fuel. This are a real funds which already exist and this release is really about spending that money.

Another pilot project in this fund will use floating wind turbines to produce hydrogen and is called the Dolphyn project, where electrolysers will be mounted next to floating wind farms to produce hydrogen. This amounts to £427,000 awarded to Environmental Resources Management to prototype this.

It says that a further 7 projects have been selected to develop concepts towards commercialization relating to steel production, food and drinks, nickel, cement, and glass.

The government statement is notionally from Ian Duncan who heads the Department for Business where he blithely informs us that he has also recently invested £26 million into 9 separate carbon capture schemes, highlighting one in Cheshire which is expected to become the UK’s largest CCUS projects. These 9 carbon schemes have all been announced back in June, and the Cheshire plant is a Tata owned chemical Plant, and is perhaps a backhander to the previous owner of British Steel, which it says will capture “more than 100 times the carbon dioxide trapped by an existing trial at the Drax power plant in North Yorkshire.”

The Drax power station is really a very small partial carbon capture scheme that is touted widely as successful, but appears to have cut emissions by around 10%.  The government has awarded Tata Chemicals Europe a £4.2 million grant towards the project, but then again it also gave Drax a £5 million government grant for a pilot to extend its carbon capture. In total the government plans to spend £26 million to spur nine carbon capture projects and £170 million to create a net zero carbon “industrial cluster” in the UK by 2040.

The current UK government has formed a fated policy which suggests shifting to 30% renewables, 30% carbon capture with fossil fuels, and 30% nuclear and 10% other, for UK electricity. Since that policy statement nuclear has become an albatross around its neck, with the Hinkley Point C reactor which was only signed in the early says of Theresa May’s Prime Ministership, and which is already reported to be years behind schedule with massive cost overruns. Since it was signed up, 2 further Nuclear power stations have been cancelled in the UK – so that 30% has already gone up in CO2 (smoke).

But it seems determined to push ahead with carbon capture as a way forward and the entire energy economy switch to Hydrogen. The release listed all the awards in the Hydrogen Supply and Industrial Fuel Switching competitions which related to creating hydrogen at scale; handling it safely; carbon capture in gas pipelines; a hydrogen gas generation plant, and of course a mass scale steam reforming plant to take CO2 out of natural gas; a distribution system for hydrogen for domestic heating; an ethanol reformer for hydrogen manufacture; and a hydrogen from waste system. These are all exceptionally useful ideas to push pilots in and it will be interesting to see if the UK government can survive long enough to bring them to fruition, as they seem genuinely innovative. Certainly if it can convert steel manufacture to hydrogen, and make enough of a hydrogen market to supply it, it will be quite a transition.