The UK government has committed £2bn in funding over the next 15 years to support green hydrogen projects.
Energy Security Secretary Claire Coutinho (pictured) has announced backing for 11 major projects to produce green hydrogen and confirmed suppliers will receive a guaranteed price from the government for the clean energy they supply.
In return for this government support, the successful projects will invest over £400m in the next three years, generating more than 700 jobs in local communities across the UK and delivering 125MW of new hydrogen.
Following the launch of the first hydrogen allocation round (HAR1) in July 2022, the 11 projects include the 21MW Barrow Green Hydrogen project, being developed by Carlton Power, in north-west England, Hygen’s 24.5MW Bradford Low Carbon Hydrogen and H2 Energy and Trafigura’s 14.2MW West Wales Hydrogen project.
Offtakers include Sofidel in South Wales, which will replace 50% of its gas boiler consumption with hydrogen at its Port Talbot paper mill, InchDairnie Distillery in Scotland, which plans to run a boiler on 100% hydrogen and PD Ports in Teesside, which will use hydrogen to replace diesel in its vehicle fleet, decarbonising port operations from 2026.
Coutinho said: “Hydrogen presents a massive economic opportunity for the UK, unlocking over 12,000 jobs and up to £11bn of investment by 2030.
“Today’s announcement represents the largest number of commercial scale green hydrogen production projects announced at once anywhere in Europe.
“These eleven major new hydrogen projects across the UK will create over 700 jobs and deliver new opportunities from Plymouth in England to Cromarty in Scotland.”
Eric Adams, Carlton Power’s Hydrogen Projects Director, said: “We are delighted with today’s announcement from DESNZ.
“Securing contracts for each project – totalling 55MW of capacity and an investment of c£100m, and each with planning consent – is a major achievement and places Carlton Power among the leading British companies that are helping to build the hydrogen economy in the UK.”
Minister for Energy Efficiency and Green Finance Lord Callanan added: “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.
“This will be essential to achieving our net zero targets and will benefit people across the UK with the job and investment opportunities that this funding will bring.
“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.”
Today’s funding aims to speed up progress towards the Government’s ambition to deploy up to 10GW low carbon production capacity by 2030.
Ministers have also today opened a new second round of funding that companies can apply for to support their projects and published a production roadmap, which sets out the government’s plan for future allocation rounds in 2025 and 2026.
This includes ambitious plans to boost hydrogen capacity up to 1.5GW across these rounds, and award funding to projects to help deliver up to 4GW of CCUS-enabled, or blue, hydrogen and 6GW of green hydrogen by 2030.
Ministers have decided not to proceed with a hydrogen trial in Redcar, as the main source of hydrogen will not be available.