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UK government unveils new hydrogen, nuclear and CCS investment


Pound signs graphic Photo: Shutterstock
Photo: Shutterstock

The UK government has unveiled a £375mn package of support for innovative energy technologies that will power British homes and businesses for decades to come. The funding includes £240mn to support the production of hydrogen as a clean, low-cost energy technology, £2.5mn to develop next-generation nuclear technology and a further £5mn towards research into carbon capture.

The funding announcement followed publication of the government’s British energy security strategy, which sets out how the UK will accelerate the deployment of wind, new nuclear, solar and hydrogen, whilst supporting the production of domestic oil and gas in the nearer term – which could see 95% of electricity by 2030 being low carbon.


The support includes

  • The £240mn Net Zero Hydrogen Fund, which will invest in low carbon hydrogen production projects from the end of 2022. This will advance the government’s ambition to have up to 2 GW of low carbon hydrogen production capacity by 2025 and up to 10 GW installed by 2030, using electricity to produce power by splitting water into hydrogen and oxygen.
  • The Hydrogen Business Model, which will support further investment in hydrogen production with £100mn for electrolytic projects to cover the difference between the cost of production (the strike price) and the sale price for hydrogen (reference price). Funding for this will launch in summer 2022.
  • The Industrial Hydrogen Accelerator, a £26mn innovation funding programme to support UK industry in adopting hydrogen as a clean, affordable fuel source for sectors like manufacturing by demonstrating the feasibility of hydrogen to businesses and reducing the cost of switching energy systems.
  • A £2.5mn competition for bidders seeking to develop a UK Advanced Modular Reactor (AMR). These reactors use novel and innovative fuels, coolants, and technologies to generate high-temperature heat for industrial applications as well as for electricity to power people’s homes. Industry representatives are invited to apply for a share of this funding to develop their projects. On top of this, the UK’s Business and Energy Secretary Kwasi Kwarteng has also announced that nuclear regulators (the Office for Nuclear Regulations and Environment Agency) have been provided with an additional £830,000 of funding to help bring the development of UK AMRs to fruition.
  • Some £5mn government funding for accelerating carbon capture and storage (CCS) technologies under the ACT 3 scheme, an international initiative between 14 countries worldwide, including the UK, aimed at accelerating CCS technologies through funding research and innovation projects.


Government support for hydrogen is also being complemented by extensive private investment, including ITM Power’s announcement of a new electrolyser plant in Sheffield which will support the hydrogen industry and create 500 jobs.


In addition to the investments detailed above, the government has also published a Hydrogen Investor Roadmap to shine a spotlight on the numerous investment opportunities across the hydrogen value chain and drive private investment in hydrogen to help boost the homegrown UK hydrogen industry built on clean, affordable power. A CCUS Investor Roadmap has also been published, summarising the current engagement of government and industry, outlining further opportunities to deliver CCUS and drive investment.


Scotland unveils fund to develop CO2 utilisation technology

Meanwhile, the Scottish government has launched a £5mn CO2 utilisation challenge fund, to help businesses and organisations develop and commercialise technology that harnesses and converts CO2 – the biggest contributor to climate change emissions – and uses it to produce valuable products such as synthetic fuels and proteins for use in aquaculture. 


The CO2 Utilisation Challenge Fund will be administered by Scottish Enterprise and match-funded by industry, meaning over £10mn could be invested in the initiative over its two-year lifetime.