In a critical step forward to transform the UK into a highly investable market for green hydrogen, the Government has awarded support to 11 green hydrogen projects in a world-first commercial-scale Hydrogen Allocation Round, securing 125MW of capacity. Ministers have also published a strategic roadmap which sets out the UK’s commitment to ramp up a low carbon hydrogen economy between now and 2035.

The Government has revised its target of 10GW of low carbon hydrogen by 2030 to better align with the escalating role anticipating for green hydrogen. 6GW of this target will now be supplied by green hydrogen generated from renewables (up from 5GW), while the remaining 4GW will be sourced from blue hydrogen.

In the first allocation round, the Department for Energy Security and Net Zero invited green hydrogen developers to submit their projects for assessment to determine which would be deliverable and offer good value for money. Eleven projects ranging from 5.2MW to 24.5MW have be awarded contracts at a weighted average strike price of £241/MWh. The successful developers will now need to reach Final Investment Decision within the next six months to take up their contracts.

The remaining capacity from the first allocation round will be carried over to the newly-launched Hydrogen Allocation Round 2 (HAR2) to secure a further 875MW. The application window will run April 2024, with results due to be published early 2025. HAR1 and HAR2 are aiming to deliver a total of 1GW of green hydrogen capacity (in construction or operation) by 2025.

Laurie Heyworth, RenewableUK’s senior policy analyst for emerging technologies said: “It’s great to see the UK leading the way on green hydrogen, with the largest number of commercial-scale projects announced at one time anywhere in Europe. This marks the beginning of the first major wave of larger-scale projects, enabling us to unlock £11bn in private investment by 2030 and to start building up UK-based supply chains.”

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