Yesterday saw the new Labour government deliver its first Budget for 14 years, with backing for both carbon capture and hydrogen.
Up to £1.4 billion will be spent on carbon capture and hydrogen for 2024-25, rising to £3.7 billion for 2025-26 under the allocation of funding given to the Department of Energy Security and Net Zero. This will include backing for “11 new green hydrogen projects across England, Scotland and Wales” which are “among the first commercial scale projects anywhere in the world”.
These 11 are those successful under the first hydrogen allocation round (HAR1) and collectively amount to 125MW of capacity. Announced back in December under the last government, these projects include Hygen’s Bradford Low Carbon Hydrogen (24.5MW), Carlton Power’s Barrow Green Hydrogen (21MW), H2 Energy and Trafigura’s West Wales Hydrogen (14.2MW) and Scottish Power and Storegga’s Cromarty Hydrogen (10.6MW).
The government had previously declared almost £22 billion backing over 25 years for carbon capture, usage and storage (CCUS) projects and reiterated that commitment here, pledging £3.9 billion for Track-1 projects to “decarbonise industry, support flexible power generation, and capitalise on the UK’s geographic and technical strengths”.
Hydrogen UK said the Budget “underscores a strong commitment to making Britain a clean energy superpower, of which hydrogen will be a critical component”. Head of Policy, Brett Ryan, welcomed the backing for carbon capture and the 11 HAR1 projects, while pledging that Hydrogen UK would work with government and stakeholders to ensure Final Investment Decisions can be reached “as soon as possible, avoiding further delay”.
The Hydrogen Energy Association, similarly, expressed encouragement at seeing reference to green hydrogen production and large-scale industrial decarbonisation projects involving CCUS enabled hydrogen.
HEA said: “With today’s announcement confirming the progress of 11 key hydrogen projects across the UK, the HEA hopes this marks the beginning of an accelerated phase for hydrogen investment and development. By driving forward these projects, the UK has a unique opportunity to position itself as a global leader in hydrogen technology and infrastructure, creating valuable jobs and economic growth in key regions.”
