The Chancellor’s Spring Statement had little for renewables, but one winner was the announcement on green hydrogen and the reduction of electricity costs on its production.

The Government will remove Climate Change Levy costs from electricity used to produce green hydrogen via electrolysis, making it a more viable method to store and use as a fuel.

RenewableUK’s director of future electricity systems Barnaby Wharton said: “We're delighted to see this reform, which will help to reduce the cost of green hydrogen for businesses and billpayers. Our Splitting the Difference report released in January highlighted the case for exempting electricity used to make green hydrogen from the Climate Change Levy as part of a package of measures to cut green hydrogen production costs by 58 per cent, so we welcome today’s announcement by the Chancellor that she will take forward this key recommendation.”

Green hydrogen has the potential to decarbonise some heavy energy use areas such steel, chemicals and shipping, as well as creating storage for excess production alongside batteries.

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