PRESS RELEASE : Boost for UK hydrogen as government backs world-leading industry [February 2024]

The press release issued by the Department for Energy Security and Net Zero on 27 February 2024.

Low carbon hydrogen to get a further boost with over £21 million of government support for 7 projects to make green fuel.

Low carbon hydrogen will get a further boost with over £21 million of government support for 7 projects to make green fuel, powering up local transport and businesses from Suffolk to Shetland.

Four projects will develop plans for new hydrogen production plants, to supply cleaner fuel to companies across a range of industries – from pharmaceuticals to automotive, boosting our energy security for the long term.

The remaining projects are set to get spades in the ground in Aberdeen, Tees Valley and Suffolk, helping to secure the UK’s energy supply by producing more home-grown hydrogen for industry and transport, with projects including:

• Suffolk Hydrogen run by Hydrab Power, which will make green hydrogen for low carbon service vehicles at the Sizewell C nuclear site
• Tees Valley Hydrogen run by Exolum, which will build a new hydrogen refuelling station to help supply the local transport sector
• Aberdeen Hydrogen Hub run by BP and Aberdeen City Council, which will provide cleaner fuel for the local fleet of electric buses

Secretary of State for Energy Security Claire Coutinho said:

We are cementing the UK’s place as a world leader in hydrogen.

The new projects we’re funding across the country will boost our supply of clean homegrown energy for use in buses, trains and local businesses.

By backing the UK hydrogen industry, we can support over 12,000 jobs and up to £11 billion in private investment by 2030.

Minister for Energy Efficiency and Green Finance Lord Callanan said:

We expect hydrogen to play a vital role in decarbonising businesses and transport as we work towards meeting our net zero targets.

These new projects announced today are further proof of our enduring commitment to supporting the UK’s growing hydrogen industry on that journey.

This follows our announcement of over £2 billion for 11 other green hydrogen production projects, making sure more of our energy is made at home in the UK.

The 7 projects have the potential to increase our capacity to make hydrogen by 800MW, supporting local communities to cut their emissions while moving towards net zero.

The government has also launched a call for evidence on the hydrogen and carbon capture, usage and storage (CCUS) elements of the Green Industries Growth Accelerator.

Announced at last year’s Autumn Statement, the £960 million Green Industries Growth Accelerator will speed up advanced manufacturing capacity in sectors including offshore wind, networks, carbon capture, usage and storage, hydrogen and nuclear.

The announcements were made at the government’s second Hydrogen Investor Forum, where industry leaders gathered to discuss the economic and net zero opportunities offered by the UK’s hydrogen economy.

This follows government support for 11 major new hydrogen production projects in December 2023, which are expected to support over 700 jobs and unlock £400 million in new investment, positioning the UK as a global leader in this industry.

This builds on significant steps to deliver cheap, clean, British energy and create a strategic advantage in emerging industries including:

• progressing a number of new carbon capture and hydrogen projects across the UK to capitalise on this emerging market backed by £20 billion
• opening a competition to build small modular reactors – one of the most advanced nuclear technologies in the world – backed with investment
• launching a £160 million fund to support the emerging UK floating offshore wind sector
• opening bids for new British low-carbon electricity generation projects, worth £205 million this year alone

CEO of Hydrogen UK Clare Jackson said:

Today’s endorsement of 7 pioneering hydrogen projects underscores the transformative power and versatility of hydrogen as a bedrock for secure, clean energy solutions. Such pivotal announcements fortify the UK’s burgeoning hydrogen economy, accelerating us towards meeting our ambitious production.

Director at Hygen Energy Jamie Burns said:

We are delighted that the Suffolk Hydrogen Hub has been selected for government NZHF funding; with plans to deliver a clean hydrogen production, refuelling and transportation system for the region. End-to-end solutions such as this are crucial to ensure we implement a successful supply and demand equation and continue the transition to a low-carbon, sustainable future.

Exolum Clean Energies Lead Andres Suarez said:

Exolum is committed to driving the energy transition and championing the deployment of green hydrogen. We are therefore proud to have achieved this important milestone in the development of our Tees Valley Hydrogen Vehicle Ecosystem project. This project will support the decarbonisation of heavy-duty vehicles in the Tees Valley, with the wider consortium rolling out an initial 25 vehicles to commence operations in applications such as refuse collection, freight transport, and supermarket home deliveries.

Chief Executive of bp Aberdeen Hydrogen Energy Ltd Oliver Taylor said:

bp Aberdeen Hydrogen Energy Ltd welcomes today’s announcement that the Aberdeen Hydrogen Hub will benefit from funding from the UK government’s Net Zero Hydrogen Fund. This is an important step towards considering final investment decision on the project to deliver phase one of a scalable green hydrogen production, storage and distribution facility in Aberdeen. By harnessing natural resources, a skilled workforce, and the pioneering spirit of the north-east of Scotland, the Aberdeen Hydrogen Hub could create a new energy solution that builds on the region’s strong oil and gas heritage.

Director of Hydrogen UK at RWE Steve Boughton said:

RWE is delighted to be awarded funding from the Net Zero Hydrogen Fund for its Pembroke Green Hydrogen Phase 2 project.

The Pembroke Green Hydrogen Phase 2 project is a 200MW electrolytic hydrogen production plant: the second stage of green hydrogen development at RWE’s Pembroke Net Zero Centre (PNZC) initiative. The project is anticipated to be operational in the late 2020s and a will play a key role in decarbonising the South Wales Industrial Cluster.

As a company with ambitions to develop approximately 2 gigawatts of green hydrogen projects across all our markets, and to invest around 8 billion euros net in clean energy infrastructure in the UK between 2024-2030, RWE looks forward to playing a key role in helping build a thriving hydrogen ecosystem in the UK.

CEO of Veri Energy Salman Malik said:

We are pleased to have been selected by the Net Zero Hydrogen Fund to receive funding to support a Front-End Engineering and Design study for a 50MW green hydrogen plant at the Sullom Voe Terminal.  This is significant first step in support of our ambitions to produce multi gigawatts of green hydrogen as Sullom Voe by leveraging existing skills and infrastructure. Significant additional work is required to establish feasibility of the project. Collaboration with local and national governments, Shetland’s community, and strategic partners, will be critical to our success.

CEO of Shetland Islands Council Maggie Sandison said:

This is the first hydrogen project for Shetland and we are delighted that Veri Energy has received funding support to progress a Front-End Engineering and Design study. This is clear recognition from the UK government of the strategic importance of the Sullom Voe Terminal and its significance to Scotland as a whole.

Head of Power to X at EDF Renewables UK Matthew Day said:

Today’s announcement is another positive step forward for Tees Green hydrogen and our ambition to make the North East region a world-leader in green technology. Expanding the capacity of Tees Green hydrogen in phase 3 will mean we can have an even greater impact on decarbonising industry in the region. Support from the government within the development stages is a great vote of confidence in our capability to deliver this transformative project.

Head of Electrolytic & Industrial Hydrogen at Progressive Energy Ltd Adam Baddeley said:

We are delighted to receive this funding and vote of confidence in relation to our Grenian Hydrogen Speke project, which is under development by partners Statkraft, Foresight and Progressive Energy.

The Speke area of Liverpool City Region is a local industrial powerhouse, providing jobs and driving growth within the automotive, pharmaceuticals and speciality chemicals sectors, with companies such as Ford, Jaguar LandRover and Astra Zeneca all located within the manufacturing cluster.

The support from government is critical to funding the necessary engineering design work to enable development of Grenian’s hydrogen infrastructure. This will be used to decarbonise not only industry, but also, potentially aviation, as Speke is also host to Liverpool John Lennon Airport.

We plan to bid the project into the government’s HAR2 process to secure a 15-year Low Carbon Hydrogen Agreement by early 2025, which enable commencement of operation in 2028.