The UK government has confirmed that 10 projects from the first phase of its flagship hydrogen programme – Hydrogen Allocation Round (HAR1) – can begin construction.
In the Autumn Budget 2024, the government confirmed support for 11 green hydrogen projects, including £90m in capital grant support through the Net Zero Hydrogen Fund and over £2bn of revenue support through the hydrogen production business model. The timeline for the projects, scattered around industrial cities and regions, is “between 2025 and the end of 2026”.
Minister for Industry Sarah Jones said, “This government is rolling out hydrogen out at scale for the first time, with 10 of the first projects now shovel-ready to start powering businesses with clean, homegrown energy from Teesside to Devon.
“Hydrogen will help us cut industrial emissions and support Britain’s industrial renewal by creating thousands of jobs in our industrial heartlands.”
The update comes as Andrex and Kleenex producer Kimberly-Clark announced it will be the first major consumer goods company in the UK to make a significant commitment to green hydrogen.
Together with energy partners Hyro, Carlton Power, and Schroders Greencoat, it will invest a combined £125m into HAR1 projects at two plants: in Barrow-in-Furness, Cumbria and in Northfleet, Kent.
Dr Emma Guthrie, CEO of the Hydrogen Energy Association, said the news marked a significant and encouraging milestone for the UK’s hydrogen sector.
“The signing of contracts for 10 projects … provides vital momentum and confidence for industry and investors alike,” she said.
The construction developments coincided with a hydrogen market update from the UK government, ahead of a new strategy launching this autumn.
Since the last update four years ago, it noted a significant amount of progress in the sector– but also change.
“Electrification technologies have moved on rapidly, pointing to a more focused and essential role for hydrogen complementing electrification in our energy system,” Jones said in the foreword.
“This government is serious about hydrogen, and we will continue to do everything we can to put the UK at the forefront of the global hydrogen revolution – unlocking billions in investment … and driving clean growth.”
The government has confirmed £500m to develop the first regional hydrogen transport and storage network, and it expects to take final investment decisions this parliament, for the first network to become operational from 2031.
In its spring statement, it committed to removing climate change levy costs from electricity used in electrolysis to produce hydrogen and is now analysing consultation responses to determine the best legislative route to remove these costs.