Clare Jackson
CEO, Hydrogen UK
Unless the Review of Electricity Market Arrangements (REMA) sets clear signals for investment, Britain will keep paying to switch off wind turbines instead of building a smarter, cheaper energy system.
Last month, the Government confirmed it would not pursue ‘zonal pricing’ in its REMA. Instead, ministers will retain a uniform wholesale electricity price across Britain under a reformed national model.
Reform for renewable growth
The need for reform is pressing. In 2024, the UK paid around £1 billion in ‘constraint payments’ to wind farms forced to curtail generation because the grid could not absorb the power. This was clean electricity we could not use, wasted at significant public cost. Unless addressed, this inefficiency will only grow as offshore wind and other renewables expand into the 2030s.
Powering flexibility with hydrogen
A modern electricity system must do more than increase renewable capacity. It must also integrate technologies that provide flexibility, reliability and resilience. Here, low-carbon hydrogen has a distinctive role. Unlike lithium-ion batteries, which are best suited to short-duration balancing measured in hours, hydrogen offers long-term storage: surplus renewable power can be converted, stored for weeks or months and returned to the grid when demand peaks or supply falls. Hydrogen can also generate electricity directly, displace fossil back-up and provide balancing services that reduce volatility.
Other options, such as pumped hydro or carbon capture, will make important contributions. Yet hydrogen’s versatility across power, industry and transport, combined with its capacity for large-scale storage, makes it uniquely positioned to address the systemic inefficiencies currently driving up bills.
Hydrogen can also generate electricity
directly, displace fossil back-up and provide
balancing services that reduce volatility.
Seizing the hydrogen opportunity
International experience demonstrates the opportunity. Denmark is already converting excess offshore wind into hydrogen through ‘power-to-x’ projects, reducing curtailment and supporting industrial decarbonisation. Germany is investing billions in a national hydrogen backbone pipeline to connect renewable generation with demand centres. If the UK hesitates, it risks losing investment and competitiveness in the very technologies that could relieve its own grid bottlenecks.
The urgent step is to design a reformed national market that enables hydrogen and other flexible technologies to reduce waste, attract private capital and underpin energy security. Only with a clear market framework can Britain avoid wasting clean power, lower bills for households and deliver on its climate commitments.
