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    The UK government pledges £2 billion to support green hydrogen initiatives

    The UK government has pledged £2 billion in funding over the next 15 years to support initiatives focused on green hydrogen. Claire Coutinho, the Energy Security Secretary, has endorsed 11 significant projects aimed at producing green hydrogen. The government will ensure that the suppliers receive a guaranteed price for the clean energy they provide.


    In exchange for this government backing, the successful projects are expected to invest over £400 million in the next three years, leading to the creation of more than 700 jobs in various communities across the UK. Additionally, these projects are set to deliver 125MW of new hydrogen capacity.


    The first hydrogen allocation round (HAR1), launched in July 2022, encompasses the 11 projects. Notable among them is the 21MW Barrow Green Hydrogen project in north-west England, developed by Carlton Power, along with other initiatives such as Hygen’s 24.5MW Bradford Low Carbon Hydrogen and H2 Energy and Trafigura’s 14.2MW West Wales Hydrogen project.


    Several off-takers have committed to these projects, including Sofidel in South Wales, planning to replace 50% of its gas boiler consumption with hydrogen at its Port Talbot paper mill. InchDairnie Distillery in Scotland aims to run a boiler on 100% hydrogen, while PD Ports in Teesside plans to use hydrogen to replace diesel in its vehicle fleet, thus decarbonizing port operations starting in 2026.


    Coutinho commented “Hydrogen presents a massive economic opportunity for the UK, unlocking over 12,000 jobs and up to £11bn of investment by 2030.”


    “Today’s announcement represents the largest number of commercial scale green hydrogen production projects announced at once anywhere in Europe.”


    “These eleven major new hydrogen projects across the UK will create over 700 jobs and deliver new opportunities from Plymouth in England to Cromarty in Scotland.”


    Carlton Power’s Hydrogen Projects Director, Eric Adams, added “We are delighted with today’s announcement from DESNZ.


    “Securing contracts for each project – totalling 55MW of capacity and an investment of c£100m, and each with planning consent  – is a major achievement and places Carlton Power among the leading British companies that are helping to build the hydrogen economy in the UK.”


    Minister for Energy Efficiency and Green Finance, Lord Callanan, added “Today’s funding commitment represents a monumental step forward in helping producers to deliver a fuel of the future today, backing businesses to go greener.”


    “This will be essential to achieving our net zero targets and will benefit people across the UK with the job and investment opportunities that this funding will bring.


    “And we’re not stopping there with a new, second round of funding now available for producers to apply for, so they can develop the next round of projects and build on this success.”


    Today’s funding initiative aims to accelerate progress toward the government’s goal of deploying up to 10GW of low-carbon production capacity by 2030. Additionally, ministers have unveiled a new round of funding that companies can apply for to support their projects. Simultaneously, they have released a production roadmap outlining the government’s strategy for allocation rounds in 2025 and 2026.


    This roadmap includes ambitious plans to increase hydrogen capacity to 1.5GW in these rounds. Furthermore, funding will be allocated to projects to facilitate the delivery of up to 4GW of carbon capture, utilization, and storage (CCUS)-enabled, or blue, hydrogen and 6GW of green hydrogen by 2030.


    In a notable decision, ministers have opted not to proceed with a hydrogen trial in Redcar due to the unavailability of the main hydrogen source.


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