Net Zero Hydrogen Fund: Development Expenditure, Round 2
Strand 1 of the Net Zero Hydrogen Fund will provide development expenditure (DEVEX) support for front end engineering design (FEED) and post-FEED studies for new low carbon hydrogen production facilities.
Your project’s total grant request must be between £80,000 and £10 million. For development expenditure (DEVEX) support you could get funding of up to 50% of your eligible project costs if you are a UK registered business of any size.
This competition will support development expenditure (DEVEX) costs for front end engineering design (FEED) and post-FEED studies. The aim is to build the pipeline of hydrogen production projects and measurably move them closer to deployment. This competition supports multiple hydrogen production pathways.
The aim of the Net Zero Hydrogen Fund (NZHF) is to provide capital expenditure (CAPEX) and development expenditure (DEVEX). This will support the commercial deployment of new low carbon hydrogen production projects during the 2020s.
This is to ensure the UK has a diverse and secure decarbonised energy system fit for meeting our ambition of up to 10GW low carbon hydrogen production by 2030, and commitment to reach net zero by 2050.
The NZHF will deliver up to £240 million via four strands as follows:
Strand 1: Development expenditure (DEVEX) support for front end engineering design (FEED) and post-FEED studies, to grow the future pipeline of hydrogen projects in the UK (this strand).
Strand 2: Capital expenditure (CAPEX) for projects that do not require a hydrogen specific business model. These are low carbon hydrogen projects that can deploy on the basis of capital expenditure support and are able to start construction rapidly.
Strand 3: CAPEX for projects that require a Hydrogen production business model and sit outside of the Phase 2 cluster sequencing process.
Strand 4: CAPEX for carbon capture usage and storage (CCUS) enabled projects that require a hydrogen specific business model and are part of the Phase 2 cluster sequencing process.
This page relates to Strand 1 (Round 2) only.
Your proposal for this strand must demonstrate how you will develop a credible project that will contribute to the at-scale production of low carbon hydrogen by 2025. Funded projects must support the delivery of the 10GW production ambition by 2030 set out in the Energy Security Strategy.
Your project must:
- have a total grant request of between £80,000 and £10 million (for DEVEX, grants can cover up to 50% of project costs)
- start by 1 November 2023
- end by 31 March 2025
- last between 6 and 17 months
- carry out all of its project work in the UK
- intend to exploit the results from or in the UK and be able to demonstrate relevant commercial engagement
- be using core technology that has been tested in a commercial environment, Technology Readiness Level (TRL) 7 or more
- meet the Low Carbon Hydrogen Standard Version 2 (LCHS v2)
To lead a project or work alone your organisation must be a UK registered business of any size.
To collaborate with the lead, your organisation must be one of the following UK registered:
- business of any size
- academic institution
- not for profit
- public sector organisation
- research and technology organisation (RTO)
In this strand a business can lead on up to 2 applications, which must be materially different, and can be included as a collaborator in a further 2 applications.
An academic institution, research and technology organisation (RTO), charity, not for profit or public sector organisation can collaborate on any number of applications.
This competition will support development expenditure (DEVEX) costs for front end engineering design (FEED) and post-FEED studies. The aim is to build the pipeline of hydrogen production projects and measurably move them closer to deployment.
This competition supports the following hydrogen production pathways as listed in the Low Carbon Hydrogen Standard Version 2 (LCHS v2):
- natural gas reforming, with carbon capture and storage (CCUS)
- biomass or waste conversion to hydrogen, with or without CCUS
If a CCUS-enabled project is unable to access a track-1 or track 2 cluster, including any expanded track-1 clusters, then we will reserve the right to reject their application on the basis that the project does not have a clear route to market.
Your project must address low carbon hydrogen production opportunities and must focus on FEED studies, post-FEED studies or both.
FEED studies can include:
- equipment definition, for example equipment data sheets, specifications
- equipment pricing, for example bid lists, bid packages
- plant layout and model, for example plot plan
- material quantification, for example material take-off, physical drawings
- engineering, procurement and construction (EPC) and execution planning, for example EPC schedule, contract plan
- cost estimation, for example capital costs, operating costs
- commercial proposal, for example cost, schedule, performance guarantees
- environmental impacts and mitigation
Post-FEED and pre-final investment decision (pre-FID) studies can include:
- refinement of the outputs of FEED, particularly the cost estimates
- planning applications
These lists are not exhaustive.
Hydrogen production projects will be able to apply for co-funding through this strand if they require DEVEX support for the cost of front-end engineering design (FEED), post-FEED expenditures, or both. Where appropriate, support will also be available for FEED and post-FEED costs for associated on-site transport and storage infrastructure.