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The UK has initiated the second round of the Hydrogen Allocation Round (HAR) funding program, aiming for 875 MW allocation to projects operational between 2026 and 2029. The funding, part of the Hydrogen Production Business Model (HPBM), uses a Contracts for Difference (CfD) subsidy approach. The Department for Energy Security and Net Zero plans annual HAR programs, with HAR3 and HAR4, totalling 1.5 GW, slated for launch after 2025 to expedite 2030 hydrogen production targets.
In July 2022, the UK government launched the first Hydrogen Allocation Round (HAR1), a significant milestone in Europe, announcing 11 successful projects, with a total capacity of 125 MW. Among them is Hygen Energy‘s Bradford Hydrogen Production Facility, projected to be the highest MW producer on the list. Hygen’s pioneering project is positioned to contribute to job creation and industry decarbonisation, alongside the nation’s Net Zero objectives.
HAR1 represented a substantial investment opportunity, with over £2 billion in revenue support from the Hydrogen Production Business Model and £90 million from the Net Zero Hydrogen Fund allocated to support construction. The first HAR1 projects are expected to be operational from 2025, providing certainty for hydrogen developers, investors, and supply chain companies committed to the UK.
The projects, spanning 8 regions in England, Scotland, and Wales, are set to deliver various benefits. They include an upfront private capital investment of £413 million between 2024-2026, generating approximately 760 direct jobs during construction and operation.