The Low Carbon Contracts Company (LCCC) has today been announced as the counterparty for the Hydrogen Production Business Model by the Department for Energy Security and Net Zero (DESNZ).
LCCC will soon be directed to offer contracts with the 11 hydrogen projects located across the UK, which were announced by the Government on 14 December.
The business model is similar to the Contracts for Difference (CfD) scheme, where the subsidy is the difference between a ‘strike price’ (reflecting the cost of producing hydrogen) and a ‘reference price’ (reflecting the market value of hydrogen).
LCCC has been advising DESNZ on the development of the business model for the past three years, utilising its expertise from being the counterparty for the CfD scheme.
CEO, Neil McDermott said:
“We are delighted with the Government’s announcement of eleven major hydrogen projects across the UK, which are to be offered Hydrogen Production Business Model contracts. This is an important development in the hydrogen sector and in our country’s journey towards Net Zero. We are excited to work with these new projects and expand our role in the development of the hydrogen economy.”
LCCC is uniquely positioned as a bridge between DESNZ, the investment community and industry, providing the expertise needed to deliver this innovative business model, accelerating the transition to Net Zero.
Lead Contract Manager for Hydrogen Scheme Development at LCCC, Oliver Coe, said:
“This is fantastic news - we are looking forward to supporting the selected projects in 2024 and beyond. As things progress, the Hydrogen Production Business Model contracts will support the development and operation of a number of both Green and Blue Hydrogen Production Facilities in line with the UK's Net Zero targets. We are excited by these steps and will continue to work with our partners to deliver positive outcomes.”