Uniper to replace UK coal plant with 500MW green hydrogen project, but only if it gets government cash for H2

Uniper, the German utility company, has unveiled its intentions to construct a 500MW green hydrogen facility on the premises of the Ratcliffe coal-fired power station, which is slated for closure by the end of September 2024. The initiative could see an initial 100MW of electrolyser capacity installed at the site during the late 2020s.

Ratcliffe, which initially commenced operations in the 1960s, represents one of the remaining two coal power plants in the United Kingdom. Uniper recently secured a local development order in July, granting them "outline planning permission" to undertake a low-carbon energy venture at this location. As with many coal-fired power plants, Ratcliffe boasts pre-existing grid connections, access to demineralized water, and sufficient land for potential expansions to gigawatt-scale capacities in the future.

Uniper's blueprint involves the installment of the first 100MW of electrolysis capacity "in the second half of the 2020s," contingent upon the final investment decision, acquisition of offtake agreements, and receipt of planning and environmental permits. The project's progress also hinges on securing a "Low Carbon Hydrogen Agreement," a subsidy designed to bridge the cost differential between fossil-based hydrogen and environmentally friendly alternatives.

The UK government recently disclosed plans to initiate the second competitive tender for this support, with a cap set at 750MW, commencing at the conclusion of the current year. Subsequent annual auctions will commence from 2025 onward. Uniper is presently evaluating the suitability of Hydrogen Allocation Round 2 for the initial phase of the Ratcliffe hydrogen endeavor, as HAR2 requires project operations to span between March 2026 and March 2029, with financial decisions expected to be made in 2025.

Uniper envisions the Ratcliffe hydrogen project as being surrounded by potential customers hailing from diverse sectors. The site's location is within the East Midlands Freeport, one of the special economic zones established by the UK government in 2021 to stimulate post-Covid economic recovery. Notably, the East Midlands Freeport holds the distinction of being the sole inland freeport, with East Midlands Airport serving as its primary customs site, recognized as the UK's largest cargo airport.