In her budget address, described as focused on "rebuilding Britain," Chancellor Reeves confirmed the continuation of support previously selected under the Conservative government. This marks the first Labour budget in 14 years and is notably the first budget presented by a female chancellor in the UK.

Reeves highlighted, "Today, I am providing funding for 11 new green hydrogen projects across England, Scotland, and Wales. They will be among the first commercial-scale projects anywhere in the world." This initiative is set to place the UK at the forefront of green hydrogen production globally.

Details of the Funding and Projects

The 11 projects, which have been in limbo for about ten months awaiting funding confirmation, are part of the first Hydrogen Allocation Round (HAR1). These projects, listed below, total 125MW of capacity:

Carlton Power’s 21MW Barrow Green Hydrogen Project, Cumbria
Hygen’s 24.5MW Bradford Low-Carbon Hydrogen, Yorkshire
Scottish Power and Storegga’s 10.6MW Cromarty Hydrogen, Scotland
HYRO’s 10.6MW Green Hydrogen 3, Southeast
Marubeni Europower’s 5.2MW Hybont, Wales
JG Pears and GeoPura’s 9.3MW HyMarnham, East Midlands
Carlton Power’s 7MW Langage Green Hydrogen, Southwest
EDF Renewables Hydrogen’s 5.2MW Tees Green Hydrogen, Northeast
Carlton Power’s 10.5MW Trafford Green Hydrogen, Northwest
H2 Energy and Trafigura’s 14.2MW West Wales Hydrogen, Wales
Scottish Power’s 7.1MW Whitelee Green Hydrogen, Scotland

The funding will be offered in the form of a weighted average strike price of £241/MWh ($313.9/MWh), strategically allocated based on the total volumes of hydrogen expected to be produced by these projects. This pricing strategy is intended to reduce the cost of the energy carrier for offtakers.

Additional Supports and Future Steps

The revenue support is slated to be disbursed following the commencement of hydrogen production, with an initial £90 million ($117.2 million) allocated to support the construction phase of these projects. However, official contracts for the funding are still pending, with detailed arrangements yet to be finalized.

This funding announcement comes after significant advocacy from Hydrogen UK, which pressed for fast-tracking the HAR1 funding to enable projects to reach final investment decisions (FID). This support aligns with the goals of the Low Carbon Hydrogen Agreement (LCHA), introduced in 2021 to promote the production and use of low-carbon hydrogen through financial support and infrastructure development.

Legal expert James Watson from Osborne Clarke remarked on the importance of this funding, noting, "The support for the new green hydrogen production facilities is welcome. The form of support is yet to be determined but the sector and investors have been trailing for some time the need for investment and policy certainty."

UK Chancellor Rachel Reeves Announces £2 Billion Funding for Green Hydrogen Projects