UK Regulator Requires Data Disclosure for Green Hydrogen Projects Compliance
Key Ideas
- OFGEM approved Hydrogen UK's proposal for electricity suppliers to provide data for government-funded green hydrogen projects to ensure compliance with the Low Carbon Hydrogen Standard.
- The data disclosed will determine the eligibility of energy supply contracts for projects, aiming to verify that the electricity used in the electrolytic hydrogen production meets the low-carbon criteria.
- The UK Government has allocated substantial revenue support for 11 electrolytic hydrogen projects, with developers awaiting final confirmation to proceed, while applications for HAR2 have also opened.
- The fate of the Hydrogen Allocation Rounds schemes is uncertain as the UK heads to elections, with the Labour Party promising significant funding to boost the green hydrogen sector if elected.
The UK's energy regulator OFGEM has mandated electricity suppliers to disclose data to ensure that government-funded green hydrogen projects comply with the Low Carbon Hydrogen Standard (LCHS). This move follows the approval of a proposal from trade body Hydrogen UK, where suppliers for Hydrogen Allocation Rounds 1 and 2 (HAR1 and HAR2) projects will provide data to the government's Low Carbon Contract Company (LCCC) for verification. The aim is to guarantee that the electricity used in electrolytic hydrogen production meets the LCHS requirements of 20g CO2e/MJ of hydrogen or 2.4kg CO2/kg of hydrogen. OFGEM highlighted that this initiative will facilitate the Retail Energy Code and ensure the electricity supply to hydrogen electrolysers supports innovation, competition, and positive consumer outcomes.
The UK Government has selected 11 green hydrogen projects with a combined capacity of 125MW for £2bn of revenue support under HAR1. While these projects are waiting for final confirmation to proceed, applications for HAR2 have been opened to support up to 875MW of hydrogen production. Notably, the majority of hydrogen production above 5MW must be sourced through a licensed energy supplier providing LCHS-compliant electricity. However, the fate of these projects remains uncertain as the UK prepares for elections, with the Conservative Government's plan to sign HAR1 contracts before the election now facing potential delays. On the other hand, the Labour Party has pledged £500m to boost the development of the green hydrogen sector if they come into power, indicating a positive outlook for green hydrogen in the UK.