Net Zero Hydrogen Fund: Strand 2 Capital Expenditure Round 2 (UK)

Deadline: 7-Jun-23

Innovate UK is pleased to announce the applications for the Strand 2 of the Net Zero Hydrogen Fund that will provide capital expenditure (CAPEX) support for new low carbon hydrogen production facilities to begin deployment in the early 2020s.

This competition will provide capital expenditure (CAPEX) to support low carbon projects to take a Final Investment Decision (FID) and begin deployment in the early 2020s. Your project must not require support from a hydrogen production business model as these projects are covered in Strands 3 and 4 of the Net Zero Hydrogen Fund (NZHF).

This competition supports the following hydrogen production pathways:

• electrolysis
• biomass or waste gasification

Your project’s eligible costs can include a request for support for:

• Electrolysis:
  • the electrolyser system (the stack)
  • compressor costs integrated into main production facility, considered on a case-by-case basis
  • all necessary balance of plant including drier, cooling, de-oxo and water supply and de-ionisation equipment
  • civil works, for example building and foundations
  • on-site small-scale hydrogen storage costs, for example static storage units
  • electricity grid connection costs
  • planning applications and surveys, environmental permitting costs
• Biomass or waste gasification:
  • feedstock storage
  • the gasifier
  • Syngas treatment unit
  • air separation unit
  • shift conversion unit
  • acid gas removal unit
  • sulphur recovery unit
  • CO2 drying & compression unit
  • methanator unit to convert residual carbon oxides
  • civil works
  • monitoring instrumentation and control systems
  • necessary balance of plant
  • on-site small-scale hydrogen storage costs, for example static storage units
  • electricity grid connection costs
  • planning applications and surveys, environmental permitting costs

Funding Information

• Your project’s total grant request must be between £200,000 and £20 million.
• Your project must:
  • have a total grant request of between £200,000 and £20 million
  • 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)

Eligibility Criteria

• Lead organisation
  • To lead a project or work alone your organisation must be a UK registered business of any size.
  • You will not be permitted to change your company structure or the lead organisation after you have submitted your application. Doing so may disqualify you from the competition.
  • Academic institutions, research and technology organisations (RTOs), public sector organisations or charities cannot lead or work alone.
  • More information on the different types of organisation can be found in their Funding rules.
• Project team
  • To collaborate with the lead, your organisation must be one of the following UK registered:
    • business of any size
    • academic institution
    • charity
    • not for profit
    • public sector organisation
    • research and technology organisation (RTO)
    • Each partner organisation must be invited into the Innovation Funding Service by the lead to collaborate on a project. Once accepted, partners will be asked to login or to create an account and enter their own project costs into the Innovation Funding Service.

Ineligible

• They will not fund projects that:
  • do not focus on low carbon hydrogen production at scale and the immediate supply chains
  • require a hydrogen production business model (HBM)
  • are not building new low carbon hydrogen production facilities
  • have total grant requests or CAPEX support outside the specified range and have not been approved in advance by Innovate UK
  • rely on gas blending into the gas network as a sole offtaker
  • are not able to take a Final Investment Decision (FID) within 3 months of receipt of a conditional grant offer letter
• They cannot fund projects that 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
  • 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

For more information, visit Innovate UK.