Why You Should Consider a Place-Based Approach to Hydrogen

Hydrogen is very much on the agenda at COP27’s Energy Day today (15 November 2022). In today’s programme there are two separate sessions devoted to exploring hydrogen’s potential not only as a replacement for fossil fuels, but also as a source of green, inclusive, economic growth in Africa and beyond. 

As it happens, this is a conversation I can contribute to. As project lead on the CREDS funded project: Place-based business models for Net Zero I have been exploring how to develop hydrogen solutions that create value locally for your economy, communities and the environment.  As part of this project, my colleague (and fellow SEG member) Dr Giulia Mininni and I have reviewed 26 regional and national level hydrogen strategies to identify the key drivers and best practices you should consider when developing a hydrogen strategy for your region.  Here’s a short summary of what we found. 

Why a hydrogen strategy matters

Hydrogen is a very promising technology. It has the potential to help us achieve Net Zero, deliver green jobs and economic growth, and meet industry’s decarbonisation needs.

But incorporating hydrogen into your energy mix requires careful planning. If you want to generate, store and transport hydrogen you will need substantial investment in a lot of new infrastructure. At the same time, you will also need to consider how quickly the cost of hydrogen will drop in future – as this is crucial for ensuring there is sufficient local demand. 

After studying both regional and national hydrogen strategies from many different countries, we strongly recommend taking what is often called a place-based approach to hydrogen. 

What is a place-based approach?

A place-based approach is strategy that puts the specific circumstances of a particular place front and centre, and engages local people as active participants in decision-making. 

This is an approach many regions are taking to hydrogen. It involves identifying and developing place-based business models that can maximise local demand and seize opportunities which might not exist at a larger scale. 

5 pillars for a place-based hydrogen strategy 

In our report, we pick out five things you should take into account when developing a place-based approach to hydrogen. These are:

  1. Your region’s physical geography
  2. Your access to crucial infrastructure like ports, transport networks, and industrial or technological centres 
  3. Your political and institutional landscape
  4. The human resources you can draw from; and 
  5. Any distinctive opportunities and issues you might have

By building your hydrogen strategy around those five pillars, you will be in a better position to  maximise your region’s distinctive strengths, provide opportunities for future cost reduction, and deliver and retain value for local communities. 

What a good place-based hydrogen strategy looks like  

Our report also identifies some of the best practices for developing an effective place-based hydrogen strategy. Here are some of the most important of these. 

First, take a whole-systems approach. That means you should be thinking about how hydrogen would fit in with the existing economies, industrial systems, and infrastructure you already have. It also means considering what societal benefits for the region you can provide, and how hydrogen solutions will balance local resources and environmental objectives — such as Net Zero and biodiversity. A whole-systems approach is crucial for reducing costs and increasing demand, through creating strategic interdependencies and coordination between different parts of your economy. 

Second, embrace learning by doing.  Building an evidence base from pilots and studies is really important. This will allow you to identify where you can reduce costs as well as avenues for scaling up. But good learning by doing will also involve collaboration and knowledge exchange across different sectors making use of hydrogen and with other regions doing similar things. This is partly because pilot programmes are heavilydependent on global supply chains, which (as the last few years have taught us!) can be disrupted. Effective collaboration across both vectors and regions can minimise those disruptions. 

Third, work with industry and communities to create local benefits. It’s important to build trust with those groups, and engage them in the decision-making process. While many hydrogen strategies are developed through close engagement with local industry utilities, communities are often not given enough input in the decision making process. Place-based hydrogen solutions needs to be built through continued multi-stakeholder collaboration to create better outcomes for local communities and users.

Where you can find out more

More detail about all of this will be in our full report – which will be out soon! If you’d like to read more about what we are doing, you can find our project website here.

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The views and opinions expressed here are solely those of the individual authors and do not represent Sussex Energy Group.

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