Hydrogen to bring £124bn and 1.6 million jobs to the UK – PwC Report.
A hydrogen heating industry can financially benefit every region of the UK, a new report by PriceWaterhouseCoopers (PwC) suggests.
The ‘Economic Value of Hydrogen for Domestic Heat in the UK’ report sets out how, in the period between now and 2035, the use of hydrogen for domestic heat could contribute £15bn and 189,000 jobs to the UK economy.
A wider hydrogen supply chain – producing and supplying hydrogen for transport, power generation, and commercial and industrial use – could lead to a total of £124bn of economic value with 1.6m jobs created or retained by 2050.
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Most of the UK’s emerging hydrogen projects are outside of London. The North-West of England is poised to benefit the most, with the potential to grow by £13bn in the period to 2050, and 75,000 jobs created or retained.
This is closely followed by South-East England, with £7bn economic benefit and 80,000 jobs, Scotland (£5bn and 51,000 jobs), and Yorkshire and The Humber (£4.5bn and 64,000 jobs).
To meet the Government’s commitment to reach net-zero by 2050, the UK power grid needs to move away from a reliance on fossil fuels. Questions remain over the best combination of power sources to continue to meet the UK’s demands.
Hydrogen is a low carbon alternative to gas which can be created here in the UK and stored, ready to be used during peak demand for energy. It can be pumped through existing gas pipes, with limited disruption and additional cost. Using hydrogen for heat will offer an option to those who are unable to electrify, either due to financial or space constraints.
The US and Europe are increasing their hydrogen supply chains at pace and scale, and the international hydrogen economy is worth an estimated US $11.7tn by 2050. Today’s report underlines that the UK is third in Europe for how attractive it is to hydrogen investors – with good supply, policy and regulation, demand, and infrastructure – bringing with them more money for the UK economy.
In terms of sectors that are set to feel the benefits of the hydrogen economy, construction and manufacturing are likely grow the most, sparking a new UK-led green-industrial revolution. The PwC calculations estimate around 300,000 jobs and over £22bn injection into these critical sectors that drive and sustain the UK economy.
The full report is available here. It finds that:
- Hydrogen can be used as a solution for the ‘hard to decarbonise’ homes found throughout the UK: The Energy and Utilities Alliance (EUA) estimate that 37%-54% of homes in the UK are ‘hard to decarbonise’, due to space constraints and other factors. This is supported by an independent report commissioned by the Climate Change Committee and produced by Element Energy in 2019 which estimated that 18%-37% of UK homes could be considered hard to decarbonise due to space.
- The 140,000 existing gas boiler engineers could be easily and cost effectively reskilled: The report found that it would be easier to upskill gas engineers to work on hydrogen than to upskill them to work on other heating technologies. The Heat in Buildings Strategy published by BEIS stated that ‘Hydrogen boiler engineers and home retrofitters will likely require similar expertise and training as natural gas boiler engineers.
- The hydrogen for domestic heat economy could position the UK as a leader in international trade: the report notes the potential for the UK to take 7% of the global market – stated as £50bn of revenue by 2050.
Dr Angela Needle, Director of Strategy at Cadent Gas said:
With lots of challenges around how homes will be decarbonised in the future, this report confirms a positive impact of hydrogen for heating in terms of jobs and growth which is compelling for a nation which today has world class skilled engineers in home heating – enabling us to make best use of this home-grown talent.
“This is not only by aiding us all on the complex and challenging journey we collectively face as we travel the path towards net zero, but by future-proofing our economy with improved skills, new jobs, and a wide-reaching spread of benefits that can be felt right across the country.”
Oliver Lancaster, CEO, Institution of Gas Engineers & Managers said:
It is very helpful to see independent analysis from PwC, which itself has collated independent domestic and overseas research and analysis, to develop a comprehensive understanding of the opportunity for the UK in terms of GVA and jobs provided by the adoption of hydrogen to heat our homes.
Highlights:
- New PwC report sets out how a UK based hydrogen industry could create millions of new jobs and opportunities ahead of 2050.
- Hydrogen for domestic heat alone could contribute 600,000 jobs and almost £50bn of value in the UK.
- A wider hydrogen supply chain for the UK – producing and supplying hydrogen for transport, commercial and industrial use – could contribute £124bn to the UK economy, and 1.6m new or retained jobs as the UK moves away from fossil fuels.
Hydrogen to bring £124bn and 1.6 million jobs to the UK, September 2023
