UK's Hydrogen Allocation Round 2: Boosting Low-Carbon Hydrogen Production
Key Ideas
- The UK Government shortlisted 27 projects under Hydrogen Allocation Round 2 (HAR2) to deliver 765MW of low-carbon hydrogen production capacity by 2029.
- Projects will supply hydrogen to various sectors like power, glass manufacturing, brick-making, and sustainable aviation fuel.
- Developers like RWE, Uniper, and Centrica, and French company Lhyfe will play significant roles in contributing to the hydrogen production capacity.
- Winning projects under HAR2 will receive public financial support through 15-year contracts and a Contract for Difference mechanism to guarantee fixed hydrogen prices.
The UK Government has shortlisted 27 successful projects under its Hydrogen Allocation Round 2 (HAR2) with the aim of delivering a total of 765MW of low-carbon hydrogen production capacity between 2026 and 2029. These projects involve key industry players like RWE, Uniper, Centrica, and French company Lhyfe, targeting sectors such as power generation, glass manufacturing, brick-making, and sustainable aviation fuel. The geographic distribution of the shortlisted projects spans the UK, with Scotland leading the way by hosting eight of the 27 projects. While the government stressed that not all projects may be successful, it aims to provide revenue support through the Hydrogen Production Business Model (HPBM) over 15-year contracts. The projects under HAR2 will receive public financial support in the form of a Contract for Difference (CfD) to ensure a fixed price for the hydrogen produced. This initiative builds upon the success and lessons learned from the previous HAR1, which faced delays but eventually secured funding for 11 projects with a combined capacity of 125MW. The Hydrogen UK Annual Conference in Birmingham further highlighted the commitment to advancing the hydrogen sector, with plans to finalize the remaining eight HAR1 contracts. The UK's focus on boosting low-carbon hydrogen production signifies a positive step towards achieving clean energy goals and strengthening leadership in the renewable energy sector.