Hydrogen Allocation Round 1 (HAR1)

Infrastructure and Construction

Record date: 31 March 2026

Whole-life cost: £2.5bn
Published schedule: 20/07/2022 – 30/06/2042
NISTA delivery confidence: Not disclosed
Senior responsible owner: Stefanie Murphy

What the project is for

The first hydrogen allocation round (HAR1) offered both Hydrogen Production Business Model (HPBM) and Net Zero Hydrogen Fund (NZHF) support to first-of-a-kind electrolytic hydrogen projects. HAR1 aims to unlock private investment, accelerate early hydrogen deployment and support the growth of hydrogen supply chains, whilst contributing to long term decarbonisation and energy system resilience. HAR1 offered support to 11 projects, with the first project becoming operational in April 2026. The HPBM is designed to provide revenue support to low carbon hydrogen producers once their project is operational, helping them to overcome the operating cost gap between low carbon hydrogen and high carbon fossil fuels. Funding for the HPBM, confirmed at Budget 2024, will be exchequer funded until the introduction of the proposed Gas Shipper Obligation. The NZHF provides up to 20% capital expenditure (CAPEX) support for HAR 1 projects.

Departmental delivery commentary

Compared to financial year 24/25 Q4, the NISTA/SRO Delivery Confidence Assessment (DCA) rating at 25/26 Q4 remained at Amber. This is primarily due to the following factors: 11 Projects have signed contracts. Although 1 project withdrew (Whitelee), the remaining 10 projects continue to progress to either reach FID and subsequently COD or are imminently about to reach COD (HyMarnham April 2026). Remaining projects are expected to reach COD between August 2027 and August 2029 but this is due to external factors to DESNZ. These timeframes are also subject to projects individual circumstances and may change. There have been some projects requiring NZHF grant funding in the next financial year as opposed to 25/26 and relevant documentation has been completed to account for this. We are working with projects and LCCC to ensure DESNZ can support the continual progression of projects to reach COD.

Schedule

Compared to financial year 24/25-Q4, the project's end-date at 25/26-Q4 remains as 2042

Cost

WLC are £2461.71m in Real Prices 24/25 as calculated by NISTA based on £2366m (DESNZ Real Prices Calendar Year 2023)

Benefits

Benefits are £1366.98m in Real Prices 24/25 as calculated by NISTA based on £1285m (DESNZ Real Prices Calendar Year 2023)