- The UK’s energy regulator, OFGEM, has implemented new rules requiring electricity suppliers to disclose detailed data for government-backed green hydrogen projects, aiming to ensure compliance with the nation’s low-carbon hydrogen standard.
- This mandate comes as part of efforts to maintain transparency and accountability in hydrogen production, with significant implications for the upcoming general elections and future energy policies.
London— In a significant policy update, the UK’s energy regulator OFGEM has approved a new requirement for electricity suppliers to disclose comprehensive data on their supply to government-funded green hydrogen projects. This initiative, proposed by Hydrogen UK, aims to guarantee that these projects adhere to the nation’s stringent low-carbon hydrogen standard (LCHS).
Ensuring Compliance with Low-Carbon Standards
As per the new regulations, suppliers involved in the Hydrogen Allocation Rounds 1 and 2 (HAR1 and HAR2) must provide data to the Low Carbon Contract Company (LCCC). This data will help the LCCC confirm that the energy supply contracts for these projects meet eligibility criteria for Power Purchase Agreements (PPAs) and comply with the LCHS, which mandates a maximum of 20g CO2 equivalent per megajoule of hydrogen or 2.4kg CO2 per kilogram of hydrogen.
Impact on Hydrogen Project Developers
The UK Government previously selected 11 projects with a total capacity of 125MW for £2 billion of revenue support under HAR1. However, developers are still waiting for the green light to proceed with final investment decisions, a process delayed by the forthcoming general election. Despite these delays, the government has opened applications for HAR2, aiming to support projects up to 875MW, indicating a robust commitment to expanding the nation’s green hydrogen infrastructure.
Political Implications and Future Prospects
The introduction of these new reporting requirements comes at a critical time as the UK prepares for a general election on July 4. The current Conservative Government had promised to finalize HAR1 contracts before the elections, but with the deadline looming, there remains uncertainty. Meanwhile, the Labour Party, gaining momentum, has pledged £500 million to bolster the green hydrogen sector, reflecting the growing political and economic importance of renewable energy in the UK’s future.
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