Trade body Hydrogen UK is urging the incoming government to ensure key green hydrogen projects can reach final investment decision (FID) within its first 100 days in office.
With £2bn ($2.5bn) in revenue support already earmarked for 11 projects totalling 125MW of capacity, under the Hydrogen Allocation Round 1 (HAR1), the association has warned delays and regulatory hurdles are putting the projects at risk.
The call comes as part of the association’s ‘manifesto’ ahead of the UK’s general election on July 4.
In December the government selected the 11 green hydrogen projects, for a combined £2bn of revenue support. However, since that date, no contracts have been signed with developers left waiting in limbo before heading to FID.
Read more: UK government selects 11 green hydrogen projects for £2bn of revenue support
Hydrogen UK says the next government must “ensure” the projects can progress to FID “immediately” by “overcoming issues presented by the Low Carbon Hydrogen Agreement (LCHA) and showing reasonable flexibility on detailed project specific points.”
Outlined by the government in 2021, the LCHA aims to bolster the production and use of low-carbon hydrogen by offering financial support, hydrogen business model development, infrastructure development and more.
However, Hydrogen UK has called for a review of policies and regulations impacting electrolytic hydrogen projects, with a view to ensuring projects can access the “lowest cost of electricity to reduce hydrogen production costs.”
Hydrogen UK, CEO, Clare Jackson, said if the incoming government doesn’t prioritise the HAR1 projects, progress could be jeopardised.
“Seeing is believing with any innovative technology,” she said. “To showcase hydrogen’s true value, we must ensure pioneering projects reach final investment decisions as soon as possible. The incoming government must prioritise this within its first 100 days, or risk jeopardising all progress made thus far.”
On Monday, the UK energy regulator OFGEM approved a proposal from Hydrogen UK to mandate electricity suppliers for HAR1 and HAR2 projects to disclose electricity data to ensure the projects meet the low-carbon hydrogen standard (LCHS).
Read more: UK regulator mandates green hydrogen electricity supply disclosure
The manifesto has also called for the LCHS to be applied across all departments responsible for hydrogen supply and demand to ensure consistency across all government support mechanisms.
On the side of blue (low-carbon) hydrogen, the association said the next government should “immediately fund” the Cluster Sequencing Process to support carbon capture, utilisation and storage (CCUS) clusters, and announce the successful Track-1 and Track-2 projects.
Aside from production, Hydrogen UK says the next government should accelerate the first allocation rounds of funding for the Hydrogen Storage and Hydrogen Transport Business Models “to provide clarity on the regions and projects that will be selected.”
The association’s also calls for the introduction of a ministerial role with “direct responsibility for hydrogen,” or to introduce an “Office for Hydrogen,” cutting across the existing departments with a stake in hydrogen.
Finally, it says the next government should “re-iterate” the commitment to future hydrogen funding and release consultation on the design of the funding mechanism.
“Providing funding certainty for hydrogen support schemes is essential for instilling investor confidence across the sector,” Hydrogen UK said.
H2 View subscription
If you’re looking to upgrade your H2 View experience, check out our subscription packages and unlock nearly FIVE YEARS of content.
Even with an essential H2 View subscription, you will gain unlimited access to h2-view.com’s archive of content containing over 11,000 stories, features and interviews – as well as a monthly digital and/or print magazine!
Still need more? Our premium package provides access to all of H2 View’s exclusive webinars on demand!
