Net Zero Hydrogen Fund – Strand 1 Development Expenditure

Key Features

Strand 1 of the Net Zero Hydrogen Fund will provide development expenditure support for front end engineering design  and post-FEED studies for new low carbon hydrogen production facilities.

Programme:     Net Zero Hydrogen Fund

Award:     Share of up to £90 million

Opens: 25th Apr 2022

Closes: 22nd Jun 2022

! This scheme is now closed

Overview

The aim of the Net Zero Hydrogen Fund is to provide capital expenditure and development expenditure. 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.

Scope

This competition will support development expenditure  costs for front end engineering design 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.

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 (equipment data sheets, specifications)
  • equipment pricing (bid lists, bid packages)
  • plant layout & model (plot plan)
  • material quantification (material take-off, physical drawings)
  • engineering, procurement and construction (EPC) execution planning (EPC schedule, contract plan)
  • cost estimation (capital costs, operating costs)
  • commercial proposal (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

The NZHF want to fund a portfolio of projects, across this competition, based on:

  • geographical location
  • project scale and replicability
  • project cost and funding available
  • project timescales
  • hydrogen production technology type
  • hydrogen production commercial readiness
  • alignment with and contribution to wider cross-economy decarbonisation
  • environmental impacts
  • use of additional low carbon electricity
  • affordability considerations, for example, longer term cost to the taxpayer
  • projects awarded funding through related BEIS and UKRI competitions
  • offtaker type

This will support the twin-track approach to hydrogen production as outlined in the UK Hydrogen Strategy.

 

Eligibility

Your project must:

  • have a total grant request of between £80,000 and £15 million
  • start by 1 January 2023
  • end by 31 March 2024
  • last between 6 and 15 months
  • carry out all of its project work in the UK
  • intend to exploit the results from or in the UK
  • meet the Draft Low Carbon Hydrogen Standard
  • be using core technology that has been tested in a commercial environment, Technology Readiness Level (TRL) 7 or more

To lead a project or work alone your organisation must be a UK registered business of any size

Academic institutions, research and technology organisations (RTOs), public sector organisations or charities cannot lead or work alone.

Subcontractors are allowed in this competition.

You cannot use a previously submitted application to apply for this competition.

Exclusions

The NZHF will not fund projects that:

  • do not focus on low carbon hydrogen production at scale and the immediate supply chains
  • produce hydrogen that is not compliant with the draft low carbon hydrogen standard
  • have total grant requests or timescales outside the specified range
  • are dependent on export performance, for example giving a subsidy to a baker on the condition that it exports a certain quantity of bread to another country
  • are dependent on domestic inputs usage, for example giving a subsidy to a baker on the condition that it uses 50% UK flour in their product

The NZHF will not fund the following costs for projects:

  • deposits on long lead items
  • grid connection fees
  • buying physical equipment or services necessary to deliver your project

Funding Costs

Up to £90 million has been allocated to fund projects across strands 1 and 2 for this competition. The breakdown between Strands 1 and 2 is not fixed, but the NZHF is primarily a deployment fund and this may influence your expectations on funding for Strand 1.

If the majority of your organisation’s work on the project is commercial or economic, your funding request must not exceed the limits below. These limits apply even if your organisation normally acts non-economically.

For developmental 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.

The research organisations undertaking non-economic activity as part of your project can share up to 30% of the total eligible project costs. If your consortium contains more than one research organisation undertaking non-economic activity, this maximum is shared between them.

Of that 30% you could get funding for your eligible project costs of up to:

  • 80% of full economic costs (FEC) if you are a Je-S registered institution such as an academic
  • 100% of your eligible project costs if you are an RTO, charity, not for profit organisation, public sector organisation or research organisation

Interested in applying for this competition?

Book an appointment to speak to one of our advisors to discuss your eligibility to apply for this Grant Funding opportunity.