UK renewable power utility Octopus Energy and renewable energy company RES have partnered to invest GBP3 billion ($4.1 billion) in renewable hydrogen projects across the country by 2030, the companies said in a statement Oct. 14.
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The two companies will work together to build renewable hydrogen production facilities across the UK powered by wind and solar, which they say will enable industrial hydrogen consumers to switch to green supply at no extra cost, protecting customers from volatile fossil fuel markets.
Octopus Renewables, part of Octopus Energy's generation arm, and RES plan to develop, own and operate renewable hydrogen plants powered by renewable energy.
"The supply of green hydrogen will be critical to the success of many industries in meeting the UK's net zero targets and with this partnership we are providing a solution for those businesses to help deliver on the government's ambitions," Octopus Renewables Co-Head Alex Brierley said.
"When we started investing in wind and solar farms we believed that these technologies would outcompete fossil fuel generation and disrupt global energy markets," Brierley said. "That day has come, and with those cost reductions there is now the opportunity to help major industrial companies make an obvious choice and use green hydrogen."
RES EMEA CEO Rachel Ruffle said: "We know that renewable based electrification using wind and solar is the fastest way to decarbonize."
"When coupled with the production of green hydrogen, it becomes the natural choice for industry and our hard to abate sectors," Ruffle said.
The partners said they would also store surplus renewable power generation as hydrogen.
Octopus Renewables manages more than 300 solar, onshore wind and biomass projects worth over GBP3.4 billion, it said.
RES has delivered 22 GW of generation capacity globally. The company supports an operational asset portfolio of over 7.5 GW, and has secured over 1.5 GW of power purchase agreements.
The rollout of renewable power generation, along with falling costs for hydrogen electrolyzers, is expected to drive down the cost of renewable hydrogen production in the medium term.
Calculated costs for hydrogen production have spiked in recent weeks, driven by soaring power and gas prices, particularly in the UK.
S&P Global Platts assessed the cost of producing hydrogen via alkaline electrolysis in the UK (including capex) at GBP14.25/kg ($19.52/kg) on Oct. 13. PEM electrolysis production was assessed at GBP16.84/kg, while blue hydrogen production by autothermal reforming was GBP5.24/kg (including capex, CCS and carbon).
Octopus Energy and RES said the deployment of large-scale green hydrogen production would protect industry from gas price volatility such as that seen recently.
"The partnership delivers a home-grown, reliable and cost-competitive source of clean hydrogen that is insulated from present and future gas price volatility and aims to accelerate the decarbonization of industrial businesses," it said.