Octopus Renewables Infrastructure Trust has agreed to invest up to £5m into HYRO Energy Limited, a new joint venture between the trust (co-invested alongside another fund managed by Octopus Energy Generation, Sky (ORI SCSp) and Renewable Energy Systems. HYRO has been established to develop green hydrogen electrolysis projects in England, Scotland and Wales for industrial offtake/consumption.
HYRO intends to develop about 700MW of green hydrogen electrolyser capacity by 2030. The announcement says that HYRO will leverage the decades of renewable development experience of RES and the investment capabilities of ORIT and Sky, along with Octopus Energy Generation’s strong relationships with potential industrial end-users of the green hydrogen, and their ability to supply green electricity.
HYRO’s strategy is aligned with the UK’s wider decarbonisation ambitions, with the UK government targeting the construction of 10 GW of low carbon hydrogen capacity by 2030, with at least 5GW of that target being green.
HYRO’s three initial pipeline projects totalling about 30MW of electrolyser capacity have been included on the UK government’s shortlist for the first round of allocations to receive ongoing revenue support under the Hydrogen Production Business Model, which 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 the successful projects in Q4 2023.
ORIT and Sky, which are investing on the same terms, will each own 25% of HYRO and will have the exclusive rights to provide further development funding beyond each fund’s initial £5m commitment, as well as preferential rights to fund the construction of the electrolyser projects.
ORIT backs green hydrogen