UK Government announces £240 million support for hydrogen

The UK Government has today (8 April) launched a wide-ranging £375 million package of support for innovative energy technologies that will set out to strengthen the nation’s energy security.

This includes £240 million to support the production of hydrogen as a ‘clean, low-cost fuel for industry’, £2.5 million of funding to develop next-generation nuclear technology and a further £5 million towards research into carbon capture.

Today’s investment sets out to support research, development and deployment of these cutting-edge technologies and give the country the energy independence it needs, reducing reliance on expensive fossil fuels.

This investment will unlock the enormous potential of hydrogen fuel, advanced nuclear reactors and Carbon Capture…

Business and Energy Secretary Kwasi Kwarteng said: “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.

“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.

Earlier this week, the Prime Minister set out plans to ‘boost Britain’s energy security’, which include a diverse range of nuclear, renewables and oil and gas.

Today’s government support includes:

  • The £240 million Net Zero Hydrogen Fund, funding low carbon hydrogen production projects, with the aim of awarding funding from the end of 2022. This will advance the Government’s ambition to have up to 2GW of low-carbon hydrogen production capacity by 2025 and up to 10GW installed by 2030, using electricity to produce power from water by splitting water into hydrogen and oxygen to create a fuel for industry;
  • The Hydrogen Business Model, which will support further investment in hydrogen production with £100 million for electrolytic projects to cover the difference between the cost of production (the strike price) and the sale price for hydrogen (reference price).  Funding for this will launch this summer;
  • The Industrial Hydrogen Accelerator, a £26 million innovation funding programme to support UK industry in adopting hydrogen as a clean, affordable fuel source for sectors like manufacturing by demonstrating the feasibility of hydrogen to businesses and reducing the cost of switching energy systems.
  • A £2.5 million competition for bidders seeking to develop a UK Advanced Modular Reactor (AMR). These reactors use novel and innovative fuels, coolants, and technologies to generate high-temperature heat for industrial applications as well as for electricity to power people’s homes. Industry representatives are invited to apply for a share of this funding to develop their projects. On top of this, the Business and Energy Secretary has also announced today that nuclear regulators (the Office for Nuclear Regulations and Environment Agency) have been provided with an additional £830,000 of funding to help bring the development of UK AMRs to fruition.
  • £5 million Government funding for accelerating Carbon Capture and Storage (CCUS) Technologies under the ACT 3 scheme. CCUS entails capturing, transporting and storing greenhouse gas emissions that would otherwise be released into the atmosphere meaning energy can be stored and used.  ACT 3 is an international initiative between 14 countries worldwide including the UK, aimed at accelerating CCUS technologies through funding research and innovation projects and the funding will support the commercialisation of the technology so that companies right here in the UK can invest in it.

In addition to this funding, the Government is also publishing a range of important documents and guidelines to support the development of these industries.

Government support for hydrogen is also being complemented by extensive private investment, including ITM Power’s announcement of a new electrolyser plant in Sheffield which will support the hydrogen industry and create 500 jobs.

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