Following on from yesterday’s (7 April) energy security strategy, the government has launched a £375 million support package for nuclear, hydrogen and carbon capture, utilisation and storage (CCUS).
Hydrogen is set to receive the biggest chunk of this funding to support the increased target of up to 10GW of low carbon hydrogen production capacity by 2030, as set out in the British Energy Security Strategy.
The new package includes £240 million to support the production of hydrogen, which will be available by the end of 2022 through the Net Zero Hydrogen Fund. A further £100 million for electrolytic projects will be supported through the Hydrogen Business Model, helping to cover the difference between the strike price and the sale price of hydrogen, with this set to launch in the summer.
Additionally, a £26 million innovation funding programme designed to support the adoption of hydrogen as a fuel source for industry, dubbed the Industrial Hydrogen Accelerator, will be launched.
Interest and activity in the hydrogen space has been growing over the past year, bolstered by the government’s Hydrogen Strategy in August 2021. This set out plans to achieve 5GW of low carbon hydrogen production capacity by 2030, a target which was yesterday doubled.
Since then, Octopus Hydrogen and BayWa r.e. have signed a Memorandum of Understanding for the development of green hydrogen, bp has announced a 500MWe green hydrogen project in Teeside, ScottishPower’s Whitelee green hydrogen project has been awarded £9.4 million in funding and Macquarie's Green Investment Group has announced a plan to develop green hydrogen on Orkney, amongst other projects.
The Department for Business, Energy and Industrial Strategy highlighted that further support for hydrogen beyond today’s funding announcement is coming from extensive private investment, including from companies like ITM Power, which recently announced a new electrolyser plant in Sheffield.
For nuclear, the government has announced a £2.5 million competition to support the development of a UK Advanced Modular Reactor (AMR). This is a category of reactor that use novel and innovative fuels, coolants and technologies, the government said, which can be used to provide heat for industrial applications as well as electricity.
The funding follows the government issuing a call for evidence to advance the building of the first AMR demonstrator in the UK last July.
In addition to this funding, the Office for Nuclear Regulations and Environment Agency is also set to receive an additional £830,000 to help the development of AMRs come to fruition in the UK.
Finally, £5 million of funding has been announced to support CCUS technologies under the ACT 3 scheme. This is an international scheme, which involves 14 countries working together to fund CCUS research and innovation projects to help bring the technology to commercialisation.
“This investment will unlock the enormous potential of hydrogen fuel, advanced nuclear reactors and carbon capture to level up the UK energy landscape and deliver for businesses and households,” said business and energy secretary Kwasi Kwarteng.
“High gas prices and Russia’s aggression in Ukraine have highlighted the urgent need to produce more of our energy here in the UK. That’s why we have set out bold plans to harness clean, cutting-edge, homegrown technologies and build the energy security we need for the future.”