UK allocates more than £2bn of subsidies to 11 green hydrogen projects in first auction round
A total of 125MW of projects will receive about $12 per kg for 15 years
The UK has allocated more than £2bn ($2.53bn) of subsidies to 11 projects in England, Wales and Scotland.
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The 125MW of winning projects under the first Hydrogen Allocation Round (HAR1) will receive a strike price of £241/MWh over a period of 15 years, with the exact subsidy from the government depending on the natural gas price under a Contracts for Difference-style scheme.
Developers will only start receiving these subsidies once projects start producing hydrogen, but more than £90m has already been allocated from the separate Net Zero Hydrogen Fund to support their construction.
The winning projects are:
This will help the UK “achieve our aim of up to 1GW of electrolytic hydrogen production projects to be in operation or construction by 2025”.
These will be followed by further annual rounds in 2027, 2028 and 2029, with the sizes of those tenders still to be determined.
A total of 17 projects entered final negotiations in HAR1, two withdrew and four were rejected.
“We encourage all projects who have not been successful in HAR1 to consider applying in HAR2 with more competitive proposals,” says the Department for Energy Security and Net Zero (DESNZ).
Lord Callanan, minister for energy efficiency and green finance, stated: “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.
“And we’re not stopping there with a new, second round of funding now available for producers to apply for, so they can develop the next round of projects and build on this success.”
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