UK's Octopus commits $12.50 mil investment to green hydrogen developer HYRO

Two funds managed by Octopus Energy will invest GBP10 million ($12.50 million) in a newly established joint venture known as HYRO Energy Ltd. to develop renewable hydrogen electrolysis projects in England, Scotland and Wales, Octopus Renewables Infrastructure Trust said April 6.

HYRO -- a joint venture between ORIT and Renewable Energy Systems -- aims to develop 700 MW of green hydrogen electrolyzer capacity by 2030 for industrial offtake.

"ORIT and Sky [another Octopus fund], which are investing on the same terms, will each own 25% of HYRO and have the exclusive rights to provide further development funding beyond each fund's initial GBP5 million commitments, as well as preferential rights to fund the construction of the electrolyzer projects," ORIT said.

HYRO would leverage RES' green power project development expertise and Octopus Energy Generation's "strong relationships with potential industrial end-users" of green hydrogen.

Its strategy was aligned with the UK government's target of 10 GW of low-carbon hydrogen capacity by 2030, with at least 5 GW of that target being electrolytic hydrogen.

Three HYRO projects (in Scotland, Wales, and the Southeast of England) totaling 30 MW of electrolyzer capacity are on the government's shortlist for the first round of allocations to receive ongoing revenue support under the Hydrogen Production Business Model.

The program aims to bridge the operating cost gap between low-carbon hydrogen and high-carbon fuels.

The Department for Energy Security and Net Zero aims to award contracts to successful projects in Q4 2023.

Platts, part of S&P Global Commodity Insights, assessed the price of UK hydrogen (PEM electrolysis including capex) at GBP7.66/kg April 5.

Octopus' domestic energy arm serves 4.9 million customers in the UK through Octopus Energy, Bulb, Affect Energy, Ebico, London Power and Co-op Energy.

RES, based near St Albans in England, has delivered over 23 GW of renewable energy projects worldwide and supports an operational asset portfolio of 12 GW.