Hydrogen infrastructure: challenges and solutions for scaling up

Hydrogen is a prime candidate for decarbonising sectors, such as transportation and construction, due to its versatility and it’s emission free characteristics. However, in order to successfully roll it out and improve its availability in the market, there are several challenges surrounding the scaling up of hydrogen infrastructure which will need to be solved first. These include production capacity, infrastructure development, the absence of standardised regulations and policies and the economic viability of hydrogen.

But what are the solutions? Read more to find out…

Challenges in scaling up hydrogen infrastructure

Some of the main challenges in scaling up hydrogen infrastructure to a point where it can be a viable energy alternative to traditional energy sources include:

1. Production capacity: Currently, global hydrogen production is predominantly from fossil fuels, resulting in significant carbon emissions. Transitioning to low-carbon hydrogen – produced via electrolysis using renewable energy (green hydrogen) or fossil fuels with carbon capture and storage (blue hydrogen) – requires substantial investment and technological advancement. As of now, operational capacity for low-carbon hydrogen remains below 2 GW, with projections indicating a need for 150 million tonnes annually by 2030 to meet net-zero targets.
2. Infrastructure development: The existing infrastructure for hydrogen production and refuelling is still in its early stages and remains highly limited, especially when discussing green hydrogen.

In order to improve the uptake of fuel cell technology and commercialise the use of hydrogen at scale, a comprehensive hydrogen infrastructure needs to be established and involves developing production facilities, storage solutions, and distribution networks. This development is capital-intensive and requires coordinated efforts among governments, industries, and investors.

We are not short of solar and wind farms around the world, of which excessive amounts of energy can be generated and lost when demand falls. By setting up hydrogen infrastructure – such as electrolysers – in these locations, the excess energy can be stored and used when demand exceeds the grid supply.

3. Regulatory and policy frameworks: Government support – through investment, policy, and regulation – plays a crucial role in driving industry growth and building stakeholder confidence. Well-designed policies can set clear targets, such as emissions reductions or renewable energy goals, that stimulate demand for hydrogen, particularly in key sectors like transport, industry, and energy. The absence of such guidance can present a major obstacle to the development of a robust hydrogen infrastructure.

Additionally, building a hydrogen economy involves many moving parts – production, pipelines, refuelling stations, etc. Regulations help align efforts across industries and regions, ensuring compatibility and efficiency.

4. Market demand and economics: The economic viability of hydrogen depends on achieving cost reductions through technological advancements and economies of scale. Currently, the market for hydrogen is developing more slowly than expected with rising costs and delays in government subsidies creating significant barriers. Like most supply and demand scenarios, if we can promote the use of hydrogen through incentives, demand will increase and as a result, we can realise lower costs of the fuel, encouraging further uptake.

Solutions and strategies for scaling up hydrogen

There are a number of solutions to the problems above, enabling the scaling up of hydrogen production and availability, supporting widespread adoption as a result.

Government support and incentives

As governments worldwide set ambitious carbon emissions targets, organisations are under increasing pressure to adopt greener alternatives. However, green hydrogen remains too scarce to meet the growing demand. To bridge this gap, subsidies, tax incentives, and supportive policies are essential to encourage investment in hydrogen infrastructure and accelerate its development.

The US, for example, is attracting clean hydrogen companies through generous production tax credits introduced by the Inflation Reduction Act. In the UK, the government’s plan to double the target for green hydrogen to 10 GW by 2030 underscores the need for robust policy support to achieve such ambitious goals.

Public-private partnerships

Collaborations between governments and private sector entities can mobilise the necessary resources and expertise for large-scale hydrogen projects. These partnerships can facilitate the development of infrastructure and the sharing of risks and rewards.

Pilot projects and demonstrations

Implementing pilot projects can provide valuable insights into the practical challenges and solutions associated with hydrogen infrastructure. For example, pilot projects in countries like the Netherlands are exploring hydrogen’s potential in home heating, delivering it safely and effectively.

UK legislation and initiatives for scaling up hydrogen power

The UK Hydrogen Strategy outlines the government’s approach to developing a thriving hydrogen economy, with the goal of achieving 5 GW of low-carbon hydrogen production capacity by 2030. This plan is part of the broader drive to position the UK as a global leader in clean energy technologies.

The Net Zero Strategy also emphasises hydrogen’s critical role in achieving the UK’s commitment to net-zero greenhouse gas emissions by 2050. Hydrogen is highlighted as a key enabler for decarbonising hard-to-abate sectors like automotive, construction and maritime.

The Hydrogen Business Model is being developed to support low-carbon hydrogen production. By providing revenue certainty to investors and producers, this model aims to accelerate the deployment of hydrogen infrastructure while ensuring long-term economic feasibility.

Scaling up hydrogen infrastructure is complex but essential for achieving a sustainable energy future. By addressing the challenges through coordinated efforts, investment, and innovation, hydrogen supply can be scaled up successfully.

If you’d like to get in contact with us to discuss your business’ requirements or to find out more, please fill out our contact form. Our team is happy to help!