Three green hydrogen projects drop out of first UK production subsidy round ahead of negotiations
The government plans to award operational support to 250MW by end of year, but 262MW is still in the running
The UK government has today (Wednesday) announced that 17 green hydrogen projects will move forward to the negotiations stage of the first allocation round for the so-called Hydrogen Business Model (HBM) subsidy, to be awarded in Q4 this year.
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This means that three projects — the Commercial Scale Demonstrator led by ERM Dolphyn, Gigastack led by Phillips 66 and Ørsted, and Quill 2 led by Inovyn ChlorVinyls — representing a combined 146MW have withdrawn during the due diligence stage.
While little information has been released about Quill 2 based at the Inovyn site in Runcorn, both Gigastack and the Dolphyn demonstrator project aimed to use offshore wind to produce green hydrogen.
Gigastack was set to use a 100MW electrolyser supplied by ITM, with electricity supplied by Hornsea 2 offshore wind farm, in order to supply renewable hydrogen to the Phillips 66 Humber refinery.
“Phillips 66 Limited and Ørsted believe that further project maturation together with supply chain development is required to unlock the maximum potential of this world-scale electrolytic hydrogen project,” the spokesperson added.
“We will continue to work with the governments of the UK, industry and stakeholders to help realise the enormous potential of green hydrogen.”
Meanwhile, ERM Dolphyn planned to construct 10MW of electrolysis capacity integrated with a floating offshore wind platform and desalination unit.
The developer has clarified in a statement that it withdrew from the competition in order to increase the capacity of its first deployment and would thereby need other sources of funding.
However, the company has not confirmed whether it plans to submit the project for future funding rounds.
In March, the government announced that 20 projects representing 408MW had been shortlisted for the support scheme — but only 250MW would be funded for this round, which seeks to back projects that can start operations in 2025.
The remaining 17 projects (listed below) have a combined capacity of 262MW:
However, the government has called for the three projects that dropped out of the competition to apply for support in its second HBM allocation round (HAR2), due to open at the end of this year.
HAR2 aims to award contracts to up to 750MW of capacity in early 2025, in a bid to guarantee the targeted 1GW of green hydrogen plants by that year are at least under construction.
The government announced earlier this month that it will hold annual tenders to support hydrogen projects.