UK businesses plan £6,5bn project to raise hydrogen production

UK businesses plan £6,5bn project to raise hydrogen production

Project HySpeed consortium wants to build one gigawatt of green hydrogen production capacity in the UK by 2030

The owners of British Gas and Johnson Matthey have teamed up with JCB scion Jo Bamford to launch a £6.5 billion project to dramatically increase Britain’s hydrogen production.

Engineering giant Arup, cement-maker Heidelberg, the building materials company Tarmac and the pipeline business National Gas, are also among a heavy coalition led by Bamford, which has submitted proposals to energy secretary Ed Miliband.

The consortium, Project HySpeed, wants to build one gigawatt of green hydrogen production capacity in the UK by 2030. They estimate that it would attract £6.5 billion of private investment and create 24,300 jobs, with at least half of them in this country.

The government’s 2023 Hydrogen Production Delivery Roadmap is targeting ten gigawatts of low-carbon hydrogen production by 2030. To support this, ministers introduced “Hydrogen Allocation Rounds” that offer subsidies to hydrogen producers through a “contracts for difference” mechanism, which guarantees a minimum price to investors.

Ministers also asked for businesses to submit larger individual proposals, and Project Hyspeed is a response to this. Should it go ahead, it would be the largest hydrogen project in the country, and one of the largest in the world.

Hydrogen is one of the cleanest forms of energy. Burned with oxygen, the chemical reaction releases three times more energy than petrol with water the only byproduct.

Former prime minister Boris Johnson was a major advocate during his time in Downing Street, claiming the public could “cook your breakfast using hydrogen power before getting in your electric car” each morning.

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Rachel Reeves, the chancellor, has earmarked £2 billion for 11 new green hydrogen projects, from Devon to the Scottish Highlands.

Scepticism about hydrogen as an energy source abounds, however. Not only is it expensive to produce but critics claim it could be dangerous if used for home heating, an allegation that is hotly disputed by hydrogen advocates. They say that home boilers powered by natural gas are more dangerous because of the potential for carbon monoxide poisoning.

The group behind Project Hyspeed claims that building at scale is key to bringing the price down. Documents submitted to Miliband’s team claim that Hypseed can deliver hydrogen at a strike price of £5.96/kg — far lower than the £9.50/kg strike price offered to those participating in the first Hydrogen Allocation Round.

Chris O’Shea, chief executive of British Gas owner Centrica, said:

There is no silver bullet to decarbonise the energy system. It will take every technology at our disposal.

“The scale and ambition of this project has the potential to dramatically lower costs, making hydrogen roll-out affordable for the government and the private sector alike.”

Harry Bowcott, an operating partner at Bamford’s HydraB Power group, said negotiations with the government thus far had been “hugely encouraging”.

He added:

Now more than ever the UK needs to stand on its own two feet, especially when it comes to our energy resources.

“Hydrogen offers us the opportunity to be energy secure and energy independent.”

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UK businesses plan £6,5bn project to raise hydrogen production, source

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