The UK government has announced the winners from the first round of its major investment in green hydrogen development, marking its intentions to support this growing economy. The Energy Security Secretary Claire Coutinho announced on December 14th the 11 green hydrogen projects the government will support, part of its announced £2 billion ($2.53 billion) funding over the next 15 years for green hydrogen production projects.
The 11 projects have a total green hydrogen production capacity of 125 megawatts (MW). They are selected from the government’s first hydrogen allocation round (HAR1), launched in July 2022.
The initiative is the largest in Europe in terms of the number of commercial-scale green hydrogen production projects announced at once. The suppliers are also guaranteed to receive a certain price from the government for the green hydrogen they supply.
In return for this government support, the selected projects will have to invest over £400 million (~$500 million) in the next 3 years. Some of off-takers of the green hydrogen are as announced:
- Sofidel in South Wales, who will replace 50% of their current gas boiler consumption with hydrogen at their Port Talbot paper mill;
- InchDairnie Distillery in Scotland, who plan to run a boiler on 100% hydrogen for use in its distilling process;
- PD Ports in Teesside, who will use hydrogen to replace diesel in its vehicle fleet, decarbonizing port operations from 2026.
According to the announcement, over 700 jobs will be created across the UK from the South West of England to the Highlands of Scotland thanks to this government initiative.
“Today’s funding commitment represents a monumental step forward in helping producers to deliver a fuel of the future today, backing businesses to go greener… And we’re not stopping there with a new, second round of funding now available for producers to apply for, so they can develop the next round of projects and build on this success,” said Minister for Energy Efficiency and Green Finance Lord Callanan.
Along with the 11 projects that will receive funding support, the government also announced the second Hydrogen Allocation Round (HAR2) that will provide Hydrogen Production Business Model support and is now open for applications. The 2nd round will aim to support up to 875MW capacity, subject to affordability, value for money and quality of projects.
The government has published a production roadmap that sets out its plan for future allocation rounds in 2025 and 2026. The UK’s target is to reach production of 10 gigawatts (GW) of low carbon hydrogen by 2030. 6GW of this target will be supplied by green hydrogen – a revised target from 5GW previously, while the remaining 4GW will be sourced from blue hydrogen.
“Today’s announcements on the first 2 hydrogen allocation rounds mark a significant milestone in the development of the UK hydrogen economy. They represent a shift from policy development to project delivery, giving industry more clarity on the route to final investment decisions. Alongside the wider policy publications, this demonstrates that the UK wants to be a leader in delivering the clean energy transition,” said Sopna Sury, Chief Operating Officer Hydrogen RWE Generation.