Meeting of the Parliament 01 May 2025
This sort of debate can sometimes be frustrating, because some people are very keen on particular types of technology when there is a myriad of technologies. If SGN wants to prove the concept by investing in that project, for which we have given it a small amount of assistance, there will be learnings not only for Scotland but for the whole of the UK and for Europe, which is no bad thing.
I will talk about some of the other areas of work that we have given funding to. Projects in Orkney, Dumfries and Galloway, and Perth and Kinross are among 11 to be awarded a share of £3.4 million to develop the hydrogen supply chain. Further Scottish and UK Government investment, alongside private capital and privately funded innovation, continue to drive the establishment of a thriving hybrid sector and should mean that we will see fruits.
However, certainty and pace are also key to seizing the benefits of hydrogen, and, if we are to maintain momentum, we really need to see the UK Government setting out a clear timetable for the future hydrogen allocation rounds, because many projects want to bid for those. We must also confirm how GB Energy and the national wealth fund will help to boost hydrogen development across the whole of the country, so I am grateful for the conversations that I have been having with the UK Government on both of those points.
It is increasingly clear that realising Scotland’s hydrogen potential and delivering a balanced decarbonised system will require a national hydrogen network with integrated storage infrastructure and a national market for nitrogen, along with recognition of the international market for hydrogen. There is uncertainty about how, where and when network and storage infrastructure will be supported, which is one of the barriers hampering private sector investment in green hydrogen production.
Once built, a national hydrogen network is likely to deliver significant advantages for hydrogen producers located close by. The strategic spatial energy plan that is being developed by the national energy system operator—NESO—will identify the optimal locations for future energy generation and storage, as well as hydrogen infrastructure across the whole of Great Britain. That important work will be completed as soon as possible.
Scotland’s natural resources are not only vital to our own transition, but can and will contribute, and are contributing, significantly to energy security and decarbonisation goals in the UK and Europe. One important context, which I alluded to earlier, is that Europe’s largest manufacturing economy, Germany, is going through a massive energy shift from gas to hydrogen but is unable to produce hydrogen domestically at the scale that it requires and will need to import it from nearby or further afield. Germany is very interested in what is happening in Scotland and among our near neighbours, so we share a huge potential for the production of hydrogen and could play a significant role in helping our neighbours to decarbonise.