Today Low Carbon Contracts Company (LCCC) has announced the signing of the first three of eleven landmark hydrogen production contracts under Hydrogen Allocation Round 1 (HAR1). This is part of the government's Hydrogen Production Business Model with the remaining contracts due to be signed early in the New Year. These contracts will enable clean hydrogen production, reduce emissions across key industries and create jobs and investment opportunities.
The Cromarty, Whitelee and West Wales projects represent first-of-a-kind hydrogen contracts in Great Britain and once operational, will have a combined capacity of 31.8MW.
The Hydrogen Production Business Model builds on the proven success of the Contracts for Difference (CfD) scheme, adapting it to a new sector and technology. As one of the first structured, government-backed frameworks globally, the Hydrogen Production Business Model provides long-term revenue support for hydrogen producers, reducing investment risks and accelerating the development of the hydrogen economy.
These contracts will play a pivotal role in decarbonising critical industries, while supporting regional economic growth and bolstering the UK’s journey to Net Zero.
Key Highlights:
Largest Cohort of Electrolytic Hydrogen Projects in Europe: HAR1 includes eleven electrolytic hydrogen projects, which is the largest single allocation of such projects at a commercial scale announced simultaneously in Europe. This establishes Great Britain as a key player in advancing low carbon hydrogen technologies.
First-of-a-Kind Policy Mechanism: HAR1 is part of the UK’s Hydrogen Production Business Model, a policy framework designed to provide long-term revenue support for hydrogen producers. This is among the first examples globally of a structured, government-backed framework aimed at reducing investment risk and accelerating the hydrogen economy.
National Decarbonisation: Hydrogen will play a vital role in reducing emissions, particularly in hard to abate sectors.
Economic Growth: The HAR1 projects will drive regional job creation and investment.
Proven Expertise: LCCC extends its leadership beyond the success of the electricity CfD scheme, applying its contract and policy expertise to other innovative technologies.
Industry Minister Sarah Jones said:
“On the heels of the recent launch of the UK's carbon capture and storage sector, we're moving swiftly to develop the infrastructure necessary for Net Zero while creating good jobs and developing the skills of the future.
“These projects are helping our mission to make Britain a clean energy superpower, ensuring hydrogen will become an important part of the UK’s future energy mix.”
Neil McDermott, Chief Executive at LCCC said:
"We are proud to sign the first three of these pioneering contracts under Hydrogen Allocation Round 1 (HAR1) that will enable the production of 31.8MW of low carbon hydrogen.
This milestone signifies our commitment to accelerating Britain’s journey towards a Net Zero future and underscores our pivotal role in delivering transformative projects, utilising cutting-edge technology, that drives decarbonisation.
We are eager to partner with our new stakeholders to deliver these groundbreaking projects."
Clare Jackson, CEO at Hydrogen UK said:
"Signed contracts for these first three projects is a landmark achievement for the UK hydrogen sector. It demonstrates the confidence and commitment of both Government and industry in building a sustainable hydrogen sector.
We look forward to maintaining this momentum and ensuring that the remaining eight projects progress swiftly. With full focus in January, we can build on these first projects and deliver a thriving hydrogen industry which will be vital for meeting the UK’s Net Zero targets, driving economic growth, and creating jobs.”