Net Zero Hydrogen Fund strand 2 spring 2022: questions raised with responses – GOV.UK

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Published 18 May 2022

© Crown copyright 2022
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This publication is available at https://www.gov.uk/government/publications/net-zero-hydrogen-fund-strand-1-and-strand-2/net-zero-hydrogen-fund-strand-2-spring-2022-questions-raised-with-responses
Where can I watch the Net Zero Hydrogen Fund briefing event held on 26 April 2022?
You can find the briefing event recording and corresponding slides at ktn-uk.org.
I have a question about this competition or would like to check if we’re within scope or eligible. Who can I speak with?
You can get in touch with the Innovate UK customer support service by:
Phone lines are open from 9am to 12:30pm and 1:30pm to 5pm, Monday to Friday (excluding bank holidays).
Innovate UK receive a high number of calls and emails closer to the competition close date. Please allow sufficient time to complete your application.
How can we find partners to work with on our project?
As part of the NZHF, we are not running any networking events. We’re expecting applications to be near market, and to have project partners in place as a result.
Can I apply the same project for Strand 2 and Strand 3?
No. Strand 2 projects must not require a Hydrogen Business Model at any stage, whilst Strand 3 projects are expected to require a Hydrogen Business Model.
Will there be another funding window for NZHF strand 2?
We anticipate that there will be another NZHF strand 2 (DEVEX) funding window early next year. Please refer to the BEIS hydrogen funding landscape infographic for more information.
Can the same project apply for strand 2 and strand 3 at the same time?
No. Strand 1 aims to grow the future of hydrogen projects in the UK through supporting front end engineering design (FEED) and post-FEED studies.
Strand 2 is for low carbon hydrogen projects that can deploy on the basis of capital expenditure support and are able to start construction rapidly. Strand 2 projects do not require a hydrogen specific business model.
Projects will be able to apply to strand 1 and then apply to a later window of strand 2, if applicable. . Where can I get more information about the different NZHF strands?
Please refer to the BEIS Hydrogen Funding landscape infographic for more information:
When are projects expected to start?
Projects that are successful are expected to start 1 January 2023.
There are a number of documents and financial checks that are required between being informed you are successful and project start date.
When are projects expected to finish?
Successful projects are expected to start 1 January 2022 and can last between 6 and 15 months. Projects must end by 31 March 2024.
For further information, read the eligibility section of the competition brief.
Can you confirm what capital costs can be covered by the Net Zero Hydrogen Fund strand 2 (CAPEX)?
Your project must address low carbon hydrogen production opportunities and must focus on construction of new low carbon hydrogen production facilities.
You can claim the usage costs of capital assets providing they meet the following criteria:
Please calculate the usage value for all equipment and tools bought for use on your project with the following calculation:
See the cost guidance for applicants.
We’re currently running a prototype and expecting to be TRL 7 later this year. Can we apply now even though we’re not TRL 7 now?
Your technology needs to have been demonstrated at a minimum of TRL7 at the time of applying for the fund.
We anticipate that there will be additional application window for both strands 1 and 2, which may be more suitable for you project. More information on the further application windows can be found on the BEIS hydrogen funding landscape infographic.
We may require an overseas subcontractor. Will we still be eligible?
Project grant holders must carry out work in the UK but can subcontract overseas if needed. You will need to provide justification within your application and ensure the value is appropriate to the total project costs.
For further information, refer to the eligibility section of the competition brief:
An applicant can lead on 2 applications (which must be materially different) and participate in a further two. Is this limit applied to each strand or across all four strands?
This is per strand, in relation to strands 1 and 2 only. Further guidance for strands 3 and 4 will be provided at a later date.
We are a company registered in Northern Ireland. Are we eligible for funding?
Any UK registered organisation should be eligible to apply for the funding. The NZHF aligns with the safe harbour limits of the EU’s General Block Exemption Regulation (GBER), so applicants impacted by the NI Protocol have the same eligibility criteria and intervention rates as those under the UK’s subsidy control rules. The only difference would be the definition of company size guidance but this is explicitly stated in the competition brief.
We have attached a questionnaire for you to complete to determine if you’re impacted by the NI Protocol. You can also refer to the following guidance for further information as it will help with the questionnaire.
What is the expected Financial Investment Decision (FID) for projects applying to Strand 2?
The competition guidance for strand 2 states that FID must be taken within 3 months of contract award.
What do you mean “at-scale”?
Strand 2 does not have a size limit on the production, but you are expected to be using core technology that has been tested in a commercial environment, Technology Readiness Level (TRL) 7 or more. NZHF is designed to support hydrogen production projects that will meaningfully contribute to our up to 10GW ambition.
When does the Net Zero Hydrogen Fund strand 2 (CAPEX) competition close?
Net Zero Hydrogen Fund strand 2 (CAPEX) will close on the 6 of July 2022 at 11am.
An extension is not possible, therefore please allow sufficient time to complete your application. If you experience any technical issues, contact customer support services team before the deadline.
What is the expected Commercial Operation Date (COD) for projects applying to strand 2?
The competition guidance for strand 2 includes a requirement is to be delivering hydrogen by 2030 latest. There is no official commercial operation date but projects which can be operational within the timeframe of the NZHF (to March 2025) are encouraged as this will contribute to meeting 2025 targets.
Where do I apply for the Net Zero Hydrogen Fund strand 2 (CAPEX) competition?
Visit the competition page for strand 2.
Please allow sufficient time to complete your application. If you experience any technical issues, contact customer support services team before the deadline.
Innovate UK receive a high number of calls and emails closer to the competition close date.
I’ve submitted my application but need to make an edit. Is it too late to make a change?
If the competition deadline has not passed, you’re able to edit your submitted application. Please make sure you click “submit” again, otherwise your application will not be processed.
You will not be able to amend the application after the competition deadline has passed.
Please allow sufficient time to complete your application. If you experience any technical issues, contact customer support services team before the deadline.
The Support Services team normally receive a high number of calls and emails closer to the competition close date.
No questions received so far.
What is meant by the term ‘consignment’?
Consignments are defined in the draft low carbon hydrogen standard, under Section 7.1. This section includes examples of when BEIS expect different feedstocks to be accounted for as separate consignments.
Is my project allowed to use food or feed crops?
Yes, some of your hydrogen consignments can be made using food or feed crops, but note that these crops must still meet the relevant sustainability criteria, and for any biomass pathway, at least 50% (by LHV energy content) of the total hydrogen produced must be made using waste or residue biomass. Separate GHG emission calculations should be conducted for each feedstock consignment, and reported in the Dashboard tab of the Hydrogen Emissions Calculator along with their relative shares of the hydrogen output, in order to calculate an overall weighted average GHG emissions result.
Are the GHG emission methodology rules for biomass routes exactly the same as the UK’s RTFO?
The draft low carbon hydrogen standard takes the same approach as the UK’s Renewable Transport Fuel Obligation with regards to the biomass sustainability criteria, as well as the GHG emissions calculation methodology relating to direct land use change, plus separate reporting of indirect land use change emissions. The only current minor differences are that under the draft low carbon hydrogen standard , the following terms from the RTFO guidance cannot currently be claimed:
Full details are given in Annex C, Chapter 5.
Regarding the GHG emissions calculation, can you please provide further detail on the system boundary that should be considered for this assessment?
The system boundary and GHG methodology that is to be used is set out in the draft low carbon hydrogen standard, under Section 6.
How many Excel workbooks do I need to complete and submit?
If you are an electrolytic project, we expect you to submit one single Excel workbook, that covers up to 4 separate consignments (renewable electricity, nuclear electricity, grid electricity and one other electricity source). If you are electrolytic project using multiple other electricity sources, please submit an Excel workbook for each of these other electricity sources, and complete or expand the Dashboard consignment table to calculate your overall weighted average GHG emission result.
If you are a project using fossil natural gas from the UK gas grid as your only feedstock, you will only need to provide one Excel workbook. If you are not sourcing your natural gas from the UK gas grid (e.g. from multiple imported LNG sources), then please submit an Excel workbook for each of these consignments and complete or expand the dashboard consignment table to calculate your overall weighted average GHG emission result.
If you are a project using multiple biomass feedstocks, then please submit an Excel workbook for each of feedstock consignments and complete or expand the dashboard consignment table to calculate your overall weighted average GHG emission result.
If you are a project using mixed waste with biogenic and fossil fractions, this can be dealt within one single Excel workbook that covers these 2 separate consignments. However, if you are a project using mixed waste along with other biomass or waste fossil feedstocks, please submit an Excel workbook for each of these consignments and complete/expand the Dashboard consignment table to calculate your overall weighted average GHG emission result.
When will the supporting video on how to fill in the hydrogen emissions calculator be available?
These videos will be available online on the BEIS website by 20 May 2022. The videos will include an overview of the calculator and how to find it, and 5 pathway specific videos with specific details on how to fill out the calculator.
Is the hydrogen emissions calculator locked down, so that formulae cannot be viewed?
The hydrogen emissions calculator is not locked using password protection, so users can see and click on the formulae that are used to calculate your GHG emission results in each emissions category within each worksheet. However, it is not possible to change these Excel calculation formulae – a warning message is displayed if the cursor moves over the cell, and an error message arises if the user tries to change the calculation formulae (requiring the change to be undone). This is because the Hydrogen Emissions Calculator follows the GHG methodology set out in the draft low carbon hydrogen standard.
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