The UK Government has issued a call for evidence to inform the UK’s transition to price-based competitive allocation for renewable hydrogen production.
The British Energy Security Strategy sets out annual allocation rounds for electrolytic hydrogen, moving to price-based competition by 2025 as soon as legislation and market conditions allow.
The purpose of this call for evidence is to gather evidence to understand more about market conditions needed for the UK to transition to price-based competitive allocation for electrolytic projects and potentially other specified non-carbon capture, usage and storage technologies.
The consultation also aims to understand the extent to which a price-based competitive allocation process could incentivise projects to support broader outcomes beyond cost reduction of low carbon hydrogen production.
These could include harnessing electricity system benefits, economic benefits and supply chain development, security of supply of hydrogen as well as how price-based competitive allocation should be designed.
The consultation closes on 2 August 2023.
The Government expects this call for evidence to be of particular interest to developers of new electrolytic projects and other non-CCUS low carbon hydrogen production projects in the UK, businesses involved in low carbon hydrogen production supply chains, electricity suppliers, consumer and environmental groups with an interest in low carbon hydrogen production and trade bodies with an interest in low carbon hydrogen and renewables sectors.
The Department for Energy Security and Net Zero will also hold a launch briefing event on the HAR2 market engagement document and the call for evidence on competitive allocation on 25 May.