The Department for Energy Security and Net-Zero (DESNZ) has announced today (7 April) a shortlist of 27 projects under the Second Hydrogen Allocation Round (HAR2).
HAR2 enables the developers of hydrogen production projects to compete for capital grant support and revenue support, the latter under the Hydrogen Production Business Model.
Through the previous round, HAR1, held by Rishi Sunak’s administration, DESNZ confirmed £90m in capital grant support and more than £2bn of revenue support to 11 projects totalling 124MW of production capacity.
Five of these projects have signed their contracts, including the Bradford Low Carbon project in Yorkshire and the Cromarty Hydrogen Project in northeast Scotland.
The UK Government is hoping for the nation to host 10GW of low-carbon hydrogen production capacity by 2030 – a target set by the Conservatives. The Labour-led Government has subsequently claimed that the hydrogen industry has the potential to attract more than £1bn of private sector investment into the UK by 2029.
Industry Minister Sarah Jones said: “We are deploying hydrogen at a commercial scale for the first time – not just investing in a technology – but investing in British jobs, our proud manufacturing communities and our energy security.
“From distilleries and sustainable aviation fuel to public transport and clean energy
generation, hydrogen can power our everyday life and unlock clean energy growth across the country as part of our Plan for Change.”
Low-carbon hydrogen standard
Only projects which meet the UK Government’s low-carbon hydrogen standard are eligible to apply for HAR1 and HAR2 funding.
Hydrogen is fast becoming a popular option for decarbonising heating processes and transport fuels, as it produces no greenhouse gas emissions at the point of combustion. However, hydrogen needs to be manufactured, and this process can be high-carbon. Around 92% of global hydrogen production is ‘grey’, i.e. produced by steam methane reforming from fossil fuels.
The 27 shortlisted projects are all green hydrogen projects, whereby hydrogen is produced via electrolysis processes with water that are powered by renewable electricity.
Hydrogen produced from the shortlisted projects would serve a range of industries including glass manufacturing, brick making, ammonia production and the production of alternative aviation fuels.
A full list of the shortlisted projects can be found here.
The Hydrogen Energy Association’s CEO Dr Emma Guthrie said the shortlist is a “much-anticipated announcement” which “brings vital clarity” to the sector.
Dr Guthrie added: “The funding support offered through HAR2 gives our members and the wider industry the confidence to gear up for delivery, unlocking investment, creating jobs, and driving economic growth.”
A project’s inclusion on the shortlist does not guarantee Government support and, as was the case with HAR1, it is unlikely that all projects shortlisted under HAR2 will secure Government funding. The developers of the shortlisted projects are required to further develop their projects and provide updated information to DESNZ.
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