In a move towards bolstering green hydrogen initiatives, the UK government has earmarked more than £2 billion ($2.53 billion) in subsidies for 11 projects spread across England, Wales, and Scotland.
This substantial allocation, part of the first Hydrogen Allocation Round (HAR1), underscores the nation’s commitment to fostering sustainable energy practices.
The winning projects, with a combined capacity of 125MW, will benefit from a strike price of £241/MWh over a 15-year period. The subsidy will be contingent on the prevailing natural gas prices, operating under a Contracts for Difference-style scheme. Translated to the higher heating value of hydrogen (39.4kWh/kg), this results in an effective strike price of £9.49 ($12) per kg.
The victorious projects and their lead developers are as follows:
1. Barrow Green Hydrogen - Carlton Power (North West, 21.0 MW)
2. Bradford Low carbon Hydrogen - Hygen (Yorkshire, 24.5 MW)
3. Cromarty Hydrogen - Scottish Power and Storegga (Scotland, 10.6 MW)
4. Green Hydrogen 3 - HYRO (RES/Octopus) (South East, 10.6 MW)
5. HyBont - Marubeni Europower (Wales, 5.2 MW)
6. HyMarnham - JG Pears and GeoPura (East Midlands, 9.3 MW)
7. Langage Green Hydrogen - Carlton Power (South West, 7.0 MW)
8. Tees Green Hydrogen - EDF Renewables Hydrogen (North East, 5.2 MW)
9. Trafford Green Hydrogen - Carlton Power (North West, 10.5 MW)
10. West Wales Hydrogen - h2 Energy and Trafigura (Wales, 14.2 MW)
11. Whitelee Green Hydrogen - Scottish Power (Scotland, 7.1 MW)
The HAR1 projects will start receiving subsidies upon the initiation of hydrogen production. Additionally, over £90 million from the Net Zero Hydrogen Fund has been allocated to support the construction phase.
The UK government has already announced a second Hydrogen Allocation Round (HAR2) for up to 875MW of green hydrogen, with further plans outlined in a newly revealed “Hydrogen Production Delivery Roadmap.” This roadmap itends on allocating up to 750MW in both the third and fourth allocation rounds (HAR3 and HAR4) in 2025 and 2026, respectively.
While 17 projects entered final negotiations in HAR1, two withdrew, and four faced rejection, the government encourages unsuccessful projects to consider reapplying in HAR2 with more competitive proposals.
Lord Callanan, Minister for Energy Efficiency and Green Finance, expressed optimism, stating, “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.”
