In her first Budget last week, Chancellor Rachel Reeves confirmed that some of the newly capitalised National Wealth Fund will be used to support 11 green hydrogen projects. “Today, I am providing funding for 11 new green hydrogen projects across England, Scotland and Wales,” Reeves said. “They will be amongst the first commercial-scale projects anywhere in the world.”

What is the National Wealth Fund?

The National Wealth Fund will mobilise billions of pounds of investment in the UK’s world-leading clean energy and growth industries, and support the delivery of the government’s new Industrial Strategy. More information can be found on the gov.uk website.

What are the 11 green hydrogen projects?

The 11 projects are:

  • Barrow Green Hydrogen
  • Bradford Low Carbon Hydrogen
  • Cromarty Hydrogen
  • Green Hydrogen 3
  • HyBont
  • HyMarnhan
  • Langage Green Hydrogen
  • Tees Green Hydrogen
  • Trafford Green Hydrogen
  • West Wales Hydrogen
  • Whitelee Green Hydrogen

However, these 11 projects are hardly “new” – they are, in fact, the 11 HAR1 projects, representing 125 MW of capacity, which were previously announced by the Conservative government in December last year. Since that HAR1 announcement, however, the sector has been vocal about funding delays, unanticipated regulatory hurdles and a lack of clarity around government policy. The result has been that none of these HAR1 projects have so far reached a final investment decision (FID) nearly a year later.

With the change of government, and Labour’s stated intentions around clean energy, this is the first realistic opportunity to demonstrate the government’s commitment to these clean energy sectors.

HAR1 funding

The government is also set to award up to 875 MW in capacity in the HAR2 round in the coming weeks, so the hydrogen sector was keen for signs of support in the Budget. To go with the announced HAR1 funding, the Budget also confirmed £5bn of the initial £8.3bn announced for GB Energy will be allocated to fund project investment, with a particular focus on less established technologies. This potentially will also benefit the hydrogen sector.

The government also hopes that having committed £27.8bn to the National Wealth Fund, this could lead to some £70bn in private investment, some of which will also be targeted at hydrogen production and the supply chain.

What now?

It is now even clearer that these positive signals of intent must be backed up by action from the Treasury and other government departments to get all of these long-delayed projects through to completion.

Written By

Published: 5th November 2024
Area: Energy

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Martyn is a commercial energy and contracts lawyer. He works in our specialist Commercial Energy and Utilities team, with a particular focus on gas and LNG.

Martyn has spent significant periods working in-house for large industry players, and as such has considerable insight into the needs of clients and the workings of large corporate organisations.
Recently Martyn has been working within National Grid Grain LNG on the commercial, regulatory and contractual aspects of bringing on-board a major new client, combined with the construction of a new-build storage and regasification facility. Previously, he worked a number of aspects of the UK’s Smart Meter roll-out.
Martyn also advises on the creation of the hydrogen infrastructure, heat networks, new Carbon Capture technology and gas regulatory work, including REMIT within the UK.

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