Funding for 11 major projects to produce green hydrogen have been backed by the UK Government.
Energy Security Secretary Claire Coutinho has announced £2bn in government funding for 11 green hydrogen production projects. Through the backing, suppliers will also receive a guaranteed price from the government for the clean energy supplied.
This represents the largest number of commercial-scale green hydrogen production projects announced at once in Europe.
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.”
Delivering new opportunities across the UK
The 11 green hydrogen projects will invest over £400m in the next three years. More than 700 jobs in local communities will be created, and 125MW of new hydrogen will be delivered to businesses, including:
- Sofidel, in South Wales, will replace 50% of their gas boiler consumption with hydrogen;
- InchDairnie Distillery in Scotland, plan to run a boiler on 100% hydrogen for use in their distilling process; and
- PD Ports in Teesside will use hydrogen to replace diesel in their vehicle fleet
Minister for Energy Efficiency and Green Finance Lord Callanan said: “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.”
Boosting the UK’s green hydrogen capacity
The funding announced today represents a significant step in scaling up the UK’s green hydrogen industry. It will help speed up progress towards the government’s ambition to deploy up to 10GW low carbon production capacity.
A new second round of funding has also been opened up by the government to support their projects.
A hydrogen production roadmap has been published, setting out the government’s plan for future allocation rounds in 2025 and 2026. This includes plans to boost hydrogen capacity to 1.5GW and awarding funding to deliver 6GW of green hydrogen by 2023.
Supporting hydrogen blending
The government has also announced support for hydrogen blending in certain scenarios – subject to an assessment of safety evidence.
In current distribution networks, less than 1% of the gas is hydrogen. Hydrogen could be blended with other gases in the network as an off-taker of last resort. This would help to reduce costs in the hydrogen sector.
Hydrogen blending may help the UK achieve net zero goals but would have a temporary role as the region transitions towards clean energy.
