Draft Hydrogen Action Plan

We would like to see more emphasis on Hydrogen for heat alongside the focus on Hydrogen for industry or transport. The Outer Hebrides Net Zero Hub is built around the opportunity to convert SGN's 1,700 consumer Stornoway Town Centre Gas Network from Propane to 100% Green Hydrogen by 2027. This conversion will build on learning from SGN's H100 project and there will be no consumer choice since Propane must be withdrawn. Work requires to be done on consumer acceptance, safety profiles, large scale H2 storage for network resilience and cost parity (consumers cannot be charged more for Hydrogen than they currently pay for Propane). We accept that Hydrogen for heat figures strongly in the 2030 to 2045 route map but first adoption at scale will be in the Outer Hebrides by 2027 and the Statement / Action Plan should provide explicit support for first adoption during this earlier period.
Also, because the Outer Hebrides Net Zero Hub will be producing large volumes of Hydrogen (and Ammonia) from ScotWind Offshore Wind deployments - far more than can be used on-island and incapable of disposal to Grid because the island network is closed to new connections - an early focus for us will be on export of Hydrogen / Ammonia to UK and European markets. The Action Plan should therefore allow for acceleration of support for bulk export of Hydrogen to an earlier stage than contemporary wisdom suggests.

Again, much of the work we will do over the next five years will be around the development of Hydrogen for heat. With the announcement of ScotWind lease options, there is now potential for a considerable volume of Offshore Wind generation to go into on-island production of Green Hydrogen. We are working with Norwegian partners to explore large scale Hydrogen to Ammonia systems to fuel ships locally and to export. A profusion of electricity generation and a limited island market will force us to look to Hydrogen export (to rest-of-Scotland, the UK and Europe) sooner than the Action Plan might anticipate and tailored support should be offered for this sort of early adoption. Successful delivery of the SGN network conversion could see the Outer Hebrides supplying, by subsea pipeline, a Hydrogen for heat backbone for town networks in the north west of Scotland mainland (Lochinver, Ullapool, Portree, Oban, Mallaig etc). We also require sustained focus on island workers exiting the shrinking Oil & Gas sector and looking for employment in the local Hydrogen sector. The seabed Hydrogen storage concept we are taking forward with Technip FMC will involve fabrication, assembly and installation processes similar to those used in Oil & Gas so synergies exist for cross-over skills.
We have come to expect in Government publications a focus on projects in Orkney, Aberdeen etc and a lack of recognition of what is going on in the Outer Hebrides. It is therefore no surprise to see detailed coverage of projects at EMEC and Aberdeen and just a passing reference to an Islands Deal and Green Growth Accelerator supported project in the Outer Hebrides. With project partners like SGN, EDF Renewables, Hynamics, BayWa r.e, Technip FMC, Crown Estate Scotland, Northland Power and Magnora Offshore and a solid demand portfolio for heat, industry and transport, the Outer Hebrides Net Zero Hub deserves more recognition.

The £100m available over five years will be insufficient to drive the growth of a new Hydrogen economy. The Outer Hebrides Net Zero Hub will cost £80m+ to fully develop and the Action Plan proposes ten Regional Energy Hubs across Scotland. Funding will have to match ambition if we are to meet Net Zero targets.
Publishing a rigid Road Map is not always helpful when the sector concerned is fluid and opportunistic in nature. Development of the Outer Hebrides Net Zero Hub has taken place through response to industry stimuli and not as a result of Government policy, Scottish or UK. The Outer Hebrides Net Zero Hub will include elements of the Road Map's 'Late 2020's' phase in its 'Mid 2020's' phase and, by necessity, international export could be a feature of the OHNZH years before mainland Hubs develop that capability.
There has to be flexibility to allow variations in pace in the development of these Hubs. The OHNZH will lead the way on Hydrogen for heat by a number of years and cannot afford to be constrained by externally imposed timelines.

Carbon must be priced to close the gap between high carbon fuels and Green Hydrogen. There should be more of a focus on cost reduction in Green Hydrogen production as opposed to Hydrogen with CCUS. The Outer Hebrides will be one of Scotland's main producers of Hydrogen and Ammonia going forward and has made a policy decision to focus only on Green Hydrogen produced from Onshore and Offshore Wind. Support available should be levelised across Blue and Green Hydrogen rather than Blue Hydrogen being presented as an early deliverable with Green Hydrogen a laggard technology. This perception will hamper the ability of Green Hydrogen to access current funding streams and will slow cost reduction in the potentially massive Green Hydrogen sector.
Green Hydrogen production in the Outer Hebrides will take place on community-owned land, driven largely by the not-for-profit public / community sector in the UK's windiest and wettest location. No area in the UK will be able to deliver Green Hydrogen at a production cost lower than the Outer Hebrides cost so the Outer Hebrides Net Zero Hub should be supported as a pathfinder project for Scotland and the UK.

Support for Regional Hydrogen Production Hubs is welcome but the scale of funding is insufficient (see above). Because surplus electricity generation cannot be dumped to Grid at the Outer Hebrides Net Zero Hub (the local network has been closed to new connections since 2016), every MW of electricity generation from Onshore or Offshore Wind will have to be matched with corresponding Hydrogen demand. The assembly of a suite of absolutely solid and credible Hydrogen demand is therefore essential as part of our Business Case and support for demand-linked Hydrogen production is therefore welcome.
Storage systems at the OHNZH will be highly innovative, featuring seabed storage to avoid the COMAH and land-take constraints surrounding above-ground storage of the scale required for SGN network resilience.

Development of Regional Hydrogen Production Hubs with parity between support for Blue and Green Hydrogen production.
Specific 'First Mover' support for facilities which innovate with Hydrogen for heat, seabed storage of Hydrogen and maximum community involvement.
A drive towards cost levelisation (with carbon fuels) of Hydrogen, again with parity between Blue and Green Hydrogen.
Support for Hydrogen export facilities with capability for Ammonia conversion for fuelling and export.
Support for innovation in Hydrogen storage and battery systems to equalise intermittent generation going into electrolysis.

Support with Hydrogen supply chain activation.
Seed funding commitment even if the project cannot be funded in full.
Knowledge exchange programmes with areas like Rotterdam Port, Bavaria, Western Norway.
Specific 'First Mover' support for facilities which innovate with Hydrogen for heat, seabed storage of Hydrogen and maximum community involvement.
Most island community generators have constrained Grid connections and routing that constrained generation to Hydrogen production could be a real growth area for the local community and help achieve Net Zero but, at the moment, constraint payments exceed the anticipated return on Hydrogen. The Government could support access for communities to Hydrogen production to address this issue and this could bring in wider investment.