Green hydrogen project overlooked for Govt cash
A facility that would have produced 28MW of power from the gas for industrial use, tying into the HyNet pipeline network, has been effectively shelved after it was not selected for a Low Carbon Hydrogen Agreement.
The scheme would have used power from the turbines at Frodsham Wind Farm to produce ‘green hydrogen’, seen as a more sustainable, longer-term solution to ‘blue hydrogen’, which is what will be produced by the HyNet system.
Progressive Energy said that without the hoped-for 15-year government support contract provided under an LCHA, the “business case for the project [would] simply not stack up”.
The LCHA is a government programme to support the development of low-carbon hydrogen projects in the country, providing much-needed cash to incentivise investment and closes the cost gap between hydrogen and conventional fuels.
Grenian Hydrogen is an entity of both Progressive Energy and Statkraft, which hopes to popularise the use of ‘green hydrogen’, achieved by running electricity from renewables through an electrolyser to separate out the gas.
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Both Progressive Energy and Statkraft are partners within the wider HyNet scheme, which received government backing to the tune of £2bn in April.
However, ‘green hydrogen’ production is not yet ready to be produced at scale, and the now-cancelled project is a failed attempt to demonstrate the potential of the alternative system.
The project was overlooked by the government for a Low Carbon Hydrogen Agreement under the first round of allocations.
Grenian had invested in the project, but its business case and unbalanced receipts meant it wasn’t considered for funding, and hence the scheme was pulled.
A second Hydrogen Allocation Round is expected shortly, but Grenian decided against another application for this specific project.
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Grenian hopes instead that its site at St Helens, where ‘green hydrogen’ could be put to use powering a furnace at Pilkington glass factory, will be successful and operational by 2027.
