Meeting of the Parliament (Virtual) 11 February 2021
I thank Lewis Macdonald for his constructive approach. I recognise his long-standing interest in hydrogen, particularly in Aberdeen, and I welcome his interest in the matter.
Lewis Macdonald makes the important point that, if we learn successfully from the H100 project that there is potential for hydrogen to play an increased role in decarbonising the gas grid—through upping the percentage in the gas mix to perhaps 20 per cent initially, which I think is what industry players propose, or ultimately to 100 per cent—and then proceed with that, clearly, there will be conversion costs. I am encouraged by the fact that manufacturers such as Worcester Bosch are developing hydrogen-ready boilers that would be relatively simple to transfer to domestic properties to allow hydrogen-enabled heating systems to be used. Obviously, other manufacturers are interested in the area.
There is a great emphasis on minimising the investment that individuals and businesses will need to make. Obviously, there is potential for the development of heat networks, which could use hydrogen. The Government is carrying out work on the idea of heat as a service. In effect, that would take the problem of having to decide what kind of system to put in place out of householders’ hands. In effect, householders would commission, through their monthly bills, a service from a provider that would provide the heat at the contract price. Householders would not have to worry about the technology because, in effect, the investment decisions would be taken out of their hands and developed through commercial arrangements.
Mr Macdonald is right that offshore wind is an area of enormous potential and that we need to do better on supply chain opportunities. We need to learn from the difficulties with offshore wind in that regard. An integral part of our approach not only to hydrogen but to the heat and building strategy is to consider the supply chain opportunities.
As I emphasised in my statement, we are keen to work with industry stakeholders as part of the development of the action plan. We want to engage with industry to identify where we can achieve early wins. For example, can we be the manufacturers of electrolysers? By being an early adopter and early mover, can we get an advantage in the market? That would give us the ability not only to generate low-cost green hydrogen in the long term and blue hydrogen in the meantime but to develop an advantage in the supply chain. I am happy to engage with Mr Macdonald on that.
Mr Macdonald is right to identify Rotterdam as a good example of the great interest in hydrogen that there is in Europe. We have had strong interest from the port of Antwerp, the Dutch Government’s hydrogen envoy and colleagues in Germany, all of whom are looking to work with Scotland to source green hydrogen for industrial decarbonisation. That could apply also in Scotland, in locations such as Grangemouth and elsewhere.