Octopus Energy, a U.K.-based energy company, plans to invest £10 million ($12.5 million) in HYRO Energy, a joint venture established by Octopus Renewables Infrastructure Trust (ORIT) and Renewable Energy Systems.
HYRO focuses on the development of green hydrogen electrolysis projects
HYRO aims to develop 700 MW of green hydrogen electrolyzer capacity by 2030, and the investment from ORIT and Sky, another Octopus fund, will each own 25% of the joint venture.
The joint venture is focused on developing renewable hydrogen electrolysis projects in England, Scotland and Wales. It aims to leverage RES’ green energy project development expertise and Octopus Energy Generation’s strong relationships with potential green hydrogen end users in industry.
HYRO’s strategy is aligned with the UK government’s goal of achieving 10 GW of low-carbon hydrogen capacity by 2030, including at least 5 GW of electrolytic hydrogen.
The HYRO project has already been shortlisted for the first round of allocations to receive ongoing revenue support under the hydrogen production business model. This program aims to close the operating cost gap between low-carbon hydrogen and high-carbon fuels. The Department of Energy Security and Net Zero plans to award contracts to successful projects in the fourth quarter of 2023.
HYRO aligns with UK plans to achieve 10 GW of low-carbon hydrogen capacity by 2030
The investment by ORIT and Sky will provide the joint venture with development funds beyond their initial £5 million commitment, as well as preferential rights to fund the construction of the cell projects. In addition, the two funds will each own 25% of HYRO, giving them a significant stake in the joint venture.
Octopus Energy is a major player in the UK energy market, serving 4.9 million UK customers through Octopus Energy, Bulb, Affect Energy, Ebico, London Power and Co-op Energy. Renewable Energy Systems, based near St Albans, England, has completed more than 23 GW of renewable energy projects worldwide and supports a portfolio of 12 GW of operational assets.
Octopus Energy’s investment is an important step toward achieving the UK government’s goal of 10 GW of low-carbon hydrogen capacity by 2030. The HYRO project, focused on the development of renewable hydrogen electrolysis projects, is aligned with this goal and has already secured a spot on the government’s shortlist for the first round of allocations under the hydrogen production business model.
