Innovative Scottish solutions to reduce costs of green hydrogen
06 Mar 2025 • 4 minute read
A new initiative in Scotland is building partnerships that can help hydrogen become a viable renewable energy source.
Hydrogen has enormous potential as a carbon-neutral fuel. However, as the race to net zero emissions intensifies, more support is needed to support the fledgling industry.
High start-up costs are proving a significant obstacle, according to figures from the International Council on Green Transportation. Their research predicts that hydrogen produced from renewables will cost $3.7 USD per kilogram in the US by 2030. While in the EU, costs are forecast for $5.6 USD per kilogram by the same year.
For hydrogen to compete with fossil fuels, prices must fall. New initiatives in Scotland offer support that will help make hydrogen an economically viable alternative energy source.
Scotland’s ambitious green hydrogen targets
Scotland aims to have five gigawatts (GW) of installed capacity dedicated to the production of low-carbon hydrogen by 2030. This will rise to 25 GW by 2045. Scottish Enterprise's Scotland Hydrogen Innovation Network (SHINe) initiative offers the framework to support these ambitions.
Launched in May 2024, SHINe serves as a one-stop shop for hydrogen businesses. Operating across the public and private sectors and academia, SHINe is intended to improve funding access and reduce business growth costs. Organisations already making use of SHINe’s capabilities include the Net Zero Technology Centre, Powerhouse, and Hydrogen Works.
Developing renewable hydrogen projects
SHINe’s proposition also includes a comprehensive capability directory, which makes it easier for companies, entrepreneurs, and investors to find partners. The directory is expected to accelerate project timelines and even reduce costs through the exchange of resources and knowledge.
The Power Networks Demonstration Centre (PNDC) is another SHINe member, based at the University of Strathclyde’s campus near Cumbernauld. The centre specialises in research for whole energy systems and sharing expertise to de-risk new systems for electricity, transport, and heat.
“We need more communication between the people who have already completed projects and identified some of the challenges,” says Dr Priya Bhagavathy, whole energy system R&D leader at PNDC.
“For hydrogen, key experts typically tend to look at chemical engineering or mechanical engineering and may not consider some of the electrical aspects – until I go and talk to them about the challenges,” she adds.
“So, it is good to have an opportunity to have people from different sectors or trades come into a single, coherent platform.”
Dr Bhagavathy highlights that in many instances the required technologies already exist. Often these technologies just need adapting for the hydrogen economy.
Reducing the cost of low-carbon hydrogen in Scotland
Scotland aspires to become a net exporter of hydrogen by 2045. To achieve this goal, 13 Regional Hydrogen Hubs are being established. The hubs will cover the complete hydrogen lifecycle, including production, storage, and distribution. The ambition for these hubs is to become regional centres for hydrogen excellence.
Scotland is already one of Europe’s largest offshore renewable energy zones. Its existing talent and infrastructure make it uniquely equipped to lead the hydrogen boom. Another ambitious new project in development is the NZTTP Hydrogen Backbone Link, a proposed hydrogen pipeline between Scotland and Europe.
The Backbone Link could provide Europe with 10% of its projected green hydrogen import demand while dramatically cutting costs. Estimates suggest that prices could be as low as $0.40 per kilogram when transporting gaseous hydrogen over 1000 kilometres.
SHINe hopes to foster similar collaborations that will reduce green hydrogen costs through innovative partnerships.
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