Congratulations to all those developers successful in the inaugural Hydrogen Allocation Round (HAR) 1 announced last week by The Department for Energy Security and Net Zero, with 11 projects totalling 125MW awarded. Excitingly, this is backed up by the simultaneous launch of the second HAR 2, supporting the UK Government’s ambition of having up to 1GW of electrolytic hydrogen in construction or operation by the end of 2025.
The starting pistol has been fired on what will be a marathon strategy for the UK’s energy security, with a long-term focus on greening transport and other energy intensive industries, providing deep storage and increasing energy security through our own renewable resources. Centrus has been proud to support a number of hydrogen projects (with clients such as DBE Energy and NGN/CKI) and we will continue to support our clients and new investors over the coming years.
Key lessons learnt for future projects from the HAR 1 include:
- Ensure contracts/partnerships are in place for selling hydrogen to specific companies
- Place solar/wind farms either within the facilities or nearby
- Take advantage of existing infrastructure that can be repurposed
- Have a local economy and industry cluster preservation perspective
- Future price-based competitive allocation regimes will likely need to beat the weighted-average HAR 1 price of £241/MWh (£175/MWh in 2012 prices)