Net Zero Hydrogen Fund: Capital Expenditure, Round 2

Funding details

• The four strands

  The NZHF will deliver up to £240m via four strands as follows:

  Strand 1: Development Expenditure (DEVEX) support for front end engineering design (FEED) studies and post-FEED studies, to grow the future pipeline of hydrogen projects in the UK.

  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 (this strand).

  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 2 (Round 2) only.

• Eligibility

  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)

  The project timelines are fixed. Do not apply if you cannot complete your project work in the timeframes outlined above.

  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
  • charity
  • 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 or a research and technology organisation (RTO), charity, not for profit or public sector organisation can collaborate on any number of applications.

• Scope

  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

  We will not provide CAPEX for:

  • costs for electricity generation assets (wind farm, turbine acquisition or solar array)
  • compressor costs that are separate from the main production facility
  • costs of refuelling equipment and infrastructure
  • labour costs not associated with eligible costs listed above
  • pre-FID costs (feasibility studies, front-end engineering studies (FEED))
  • land value costs
  • hydrogen transportation costs
  • large long-term hydrogen storage costs

• Briefing and support

  Innovate UK KTN will be holding an online briefing event on Wednesday 19th April, 10am-12:30pm; click here to register for a place. A recording will be made available following the event.

  If you would like to help to find a partner, contact Innovate UK KTN’s Hydrogen team.