Octopus and RES to pump £3bn into green hydrogen

Octopus Energy has partnered with RES in a £3 billion project to build new green hydrogen plants across the UK over the next decade.

The two companies said they would use their collective expertise and capital to develop, own and operate the facilities between now and 2030. They will work with “large industrial businesses who want to be leaders in decarbonisation” to deliver the projects. No specifics have been given as to how many plants will be developed or where they will be located.

Meanwhile, electrolyser manufacturer ITM Power has announced its intention to raise £250 million through a share placing to scale up its operations. Along with existing cash balances, the firm said this would support the semi-automation of its Bessemer Park gigafactory in Sheffield as well as the creation of a separate fully-automated facility in the UK and an international factory. This would give the company 5GW of annual manufacturing capacity by 2024.

ITM also plans to spend £50 million of the funds on technology initiatives which it expects to achieve a 50% reduction in electrolyser manufacturing costs within five years.

The announcements follow the release of the government’s Hydrogen Strategy in August, which outlined a “twin track” approach to production, covering both green hydrogen, produced by electrolysing water using renewable power, and blue hydrogen, which is made by reforming methane and capturing the carbon dioxide emissions.

Announcing the deal with RES, 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. 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.”

Rachel Ruffle, EMEA chief executive for RES, said: “We know that renewable based electrification using wind and solar is the fastest way to decarbonise. When coupled with the production of green hydrogen, it becomes the natural choice for industry and our hard to abate sectors. Our partnership will enable industrial users to make the switch to reliable and cost-effective green hydrogen.”

Earlier this month, Octopus’s dedicated hydrogen arm announced a a deal with Innova Renewables and consultancy Novus to design, build and operate green hydrogen production at several sites across the UK.

Octopus Hydrogen said it would install electrolysers, typically between 2 and 20MW in scale, as well as compression and mobile hydrogen storage alongside 4GW of solar, wind and battery projects currently under development by Innova.