Hydrogen Production Business Model / Net Zero Hydrogen Fund: successful projects
Following the first electrolytic hydrogen allocation round (HAR1) in July 2022, we have selected the successful electrolytic hydrogen projects that will be offered a Low Carbon Hydrogen Agreement.
Applies to England, Scotland and Wales
Documents
Details
The first electrolytic hydrogen allocation round (HAR1) 2022 offers joint Hydrogen Production Business Model (HPBM) revenue and Net Zero Hydrogen Fund (NZHF) capex support. Projects that are awarded contracts have the potential to:
- kickstart the low carbon hydrogen economy across the UK, helping meet the ambition of up to 1GW of electrolytic hydrogen production capacity in operation or construction by 2025
- deploy at scale at the earliest opportunity, advancing government’s aim to deploy up to 10GW of low carbon hydrogen production capacity by 2030, subject to affordability and VfM, with at least half from electrolytic hydrogen production capacity, and to do so at affordable costs by harnessing economies of scale. This could potentially unlock up to £11 billion of private investment and support more than 12,000 jobs by 2030
- help deliver carbon savings to allow us to stay on track to meet Carbon Budget 5, Carbon Budget 6 and other net zero commitments, by providing hydrogen to a range of end user sectors
We have previously assessed applications against the eligibility and evaluation criteria set out in the guidance. In accordance with the shortlisting process, we selected 20 electrolytic hydrogen projects which were invited to proceed to the first step of the Agreeing an Offer stage, consisting of initial due diligence and value for money assessment.
Initial due diligence on the shortlisted projects was then completed, at which point we invited 17 projects, totalling 262MW, to negotiations, alongside continued due diligence.
Negotiations have now concluded. Of the 17 projects that entered final negotiations, 15 projects, totalling 243MW of capacity, submitted Best and Final Offers and 2 projects withdrew. Of those that submitted Best and Final Offers, 11 projects, totalling 125MW were successful. These projects will now be offered joint HPBM and NZHF support.
Timeline
This timeline shows the key milestones for HAR1. We reserve the right to alter these timelines at any stage in the process.
- Shortlist announcement - Q1 2023
- Due diligence - Q2 2023
- Negotiations, alongside continued due diligence - Q3-Q4 2023
- Successful projects announced - Q4 2023
- Award of Low Carbon Hydrogen Agreement - Q1 2024
Funding
For HAR1, projects could apply for HPBM revenue support only, or for joint HPBM revenue support and NZHF capex support. The maximum grant funding intensity level (capex %) for projects supported through the NZHF for this allocation round is set at 20%.
Future rounds
Government has launched the second allocation round (HAR2), and aims to award contracts to up to 875MW of capacity in early 2025, subject to affordability and value for money, along with HAR1, helping to achieve our aim to deliver up to 1GW of electrolytic hydrogen production capacity in construction or operation by 2025.
See the HAR2 application guidance for further details.
For enquiries on this round or future rounds, please contact hydrogenhub@energysecurity.gov.uk.
Last updated 14 December 2023 + show all updates
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Added HAR1 successful projects.
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Added Hydrogen Business Model / Net Zero Hydrogen Fund: negotiations list for allocation round 2022.
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First published.