Department for Energy Security and Net Zero newsletter - January 2024

Welcome to the latest bulletin from the Department for Energy Security and Net Zero, with updates on:

• Major moment for UK hydrogen
• UK to become a world leader in carbon capture
• Energy efficiency support for businesses and families?
• Countries unify to move away from fossil fuels - COP28
• Other DESNZ news

Major moment for UK hydrogen

Low carbon hydrogen will be critical for supporting the UK’s energy security and achieving net zero by 2050.

On 14 December, the government announced 11 successful electrolytic hydrogen projects from the first hydrogen allocation round (HAR1) – representing the largest number of commercial scale green hydrogen projects announced at once anywhere in Europe and placing the UK at the forefront of this emerging sector.?

These pioneering projects will produce green hydrogen – through a process known as electrolysis – and will receive a guaranteed price from the government for the clean hydrogen they supply, backed by over ￡2bn of revenue support over 15 years from the hydrogen production business model.??

The projects will deliver 125MW of new green hydrogen capacity, putting the UK at the forefront of this emerging sector. They will decarbonise businesses such as paper manufacturing, whiskey distillation and transport operations across England, Scotland and Wales. The successful projects will invest over ￡400 million up-front over the next 3 years, generating more than 700 jobs in local communities across the UK.?

Alongside this announcement, the government launched the second hydrogen allocation round (HAR2) , that will award contracts of up to 875MW of new green hydrogen production capacity and published a Hydrogen Production Delivery Roadmap , setting out plans for future allocation rounds, giving businesses the confidence they need to invest in the UK.?

The Department has also set out further detail on plans for hydrogen transport and storage , including plans to launch the first allocation rounds for government support this year and our ambition to support up to two storage projects at scale and associated regional pipeline infrastructure by 2030. The government has also announced a decision to support hydrogen blending in certain scenarios , and a decision not to continue with the hydrogen heating village trial in Redcar.??

These announcements and others are summarised in the December 2023 Hydrogen Strategy Delivery Update , which includes an updated roadmap for the UK hydrogen economy to 2035.?

UK to become a world leader in carbon capture

On 20 December, the Energy Secretary published her Carbon Capture, Usage and Storage (CCUS) Vision, setting out how the UK will transition from early projects backed by government support to becoming a competitive market in this area by 2035.

This is the latest step to develop?technologies, which aim to store 20-30 million tonnes of?CO2?per year and support 50,000 jobs by 2030, backed by up to ￡20 billion of investment.

The announcement also outlined significant progress in delivering on the UK’s carbon capture clusters, including: ?????

• The launch of the process for more companies to connect to and expand the HyNet Cluster in the North-West and Wales.
• Agreeing initial commercial terms with the Northern Endurance Partnership (NEP) around Teesside and the Humber, paving the way for expansion of that cluster.
• Announced the locations of the third and fourth CCUS clusters in the Summer, along with a faster process to get those clusters identified and set up.

More information about the Vision can be found here .

Energy efficiency support for businesses and families?

Around a million families and hundreds?of businesses will be helped to cut their energy use, backed by ￡6 billion, as part of the new approach to net zero that will save on costs for the public.??

A variety of schemes have been announced to support families and business, including:?

• a further ￡1.5 billion for the Boiler Upgrade Scheme.
• a new ￡400 million energy efficiency grant, launching in 2025, for households in England to make changes such as bigger radiators.
• a new ￡500 million local authority retrofit scheme, to support up to 60,000 low-income and cold homes, with measures such as insulation.
• ￡485 million for the Green Heat Network Fund, to help up to 60,000 homes and buildings access affordable, low carbon heating.

For more details on the full package of announcements, click here .

Countries unify to move away from fossil fuels - COP28

COP28 concluded on 13?December and for the first time there was a global agreement to transition away from fossil fuels, enabling us to keep the 1.5 degree temperature target within reach.

Pledges in the final text include:

• Measures to accelerate the energy transition, including doubling the global average annual rate of energy efficiency improvements by 2030.
• Essential commitments to increase resilience, including the decision to establish a fund and funding arrangements for Loss and Damage, backed by over $650m, and agreement on the Framework for the Global Goal on Adaptation. The UK is going beyond the global pledge to double adaptation spending by tripling our adaptation spending from ￡0.5bn in 2019 to ￡1.5bn in 2025.
• Measures to increase climate finance from billions to trillions, including a strengthened programme to align finance flows with low emissions and climate resilient development.
• A commitment to halt and reverse forest loss by 2030.

The UK pushed for an ambitious agreement to triple renewable energy capacity by 2030 and drive up global climate finance with Net Zero Minister Graham Stuart?making clear that this was an historic moment?that showed countries were are now unified around a common commitment to move away from fossil fuels.??

Other DESNZ news:

• Families could use electric vehicle batteries to power homes and save on bills as government backs new charging technologies – 20 December
• Industry invited to share views on changes to Emissions Trading Scheme – 18 December
• Plan to move government roles out of Westminster brought forward and new headquarters unveiled – 12 December
• Over 200,000 businesses set to get free advice settling energy supplier disputes – 7 December
• Prize opens for AI energy, environment, and infrastructure innovations – 7 December
• Government thanks Official Partners for COP28 – 6 December
• UK dedicates ￡140 million to help countries switch to cleaner energy – 5 December
• UK generates billions in climate finance and first CRDC in Africa – 4 December
• UK leads global action to protect rainforests, cut methane emissions and advance low carbon technologies - 2 December
• ￡100 million for vulnerable countries tackling climate change – 2 December

As ever, if you have any questions, wish to discuss partnership?or collaboration opportunities, please do let the team know on?[email protected] ?