General
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:
email: support@iuk.ukri.org
phone: 0300 321 4357
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.
Summary
Where can I get more information about the different NZHF strands?
You can find more information on various NZHF funding strands, as well as other hydrogen funding streams from the Department for Energy Security and Net Zero here:
Designing the Net Zero Hydrogen Fund
Hydrogen net zero investment roadmap
Hydrogen Production Business Model / Net Zero Hydrogen Fund
Cluster sequencing Phase-2
Can I apply the same project for Strand 2 and Strand 3?
No. Strand 2 proects 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 do not at present have plans for a further application round for strands 1 and 2.
What happens if the application is successful but one of the partner organisations decides to not proceed with the grant offer?
Funding is awarded on the basis of the project and any changes to the ownership / leadership of the project would be at our discretion.
We have team members inside IR35 long term contractors via umbrella companies. How should they be accounted for in our Finance?
IR35 contractors should be included as a subcontractor. You will be unable to claim overheads for these members.
Can we include multiple sites in one project?
Developers are advised to make separate applications for hydrogen production facilities based at different sites. If the production facilities are not independenty deliverable, developers can submit a single application with a justification for why the sites should be considered together.
When are projects expected to start?
Projects that are successful are expected to start 1 November 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 on 1 November 2023 and must end by 31 March 2025.
For further information, read the eligibility section of the competition brief.
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?
No, your project must use technology demonstrated at a minimum of TRL7 at the time of application to the fund.
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 eed 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.
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.
What does it mean that a project des not require a hydrogen specific business model?
Strand 2 of the NZHF is designed for projects that are not seeking revenue support through the Hydrogen Production Business model and can deploy on the basis of capital expenditure support from the NZHF.
The hydrogen production business model will provide revenue support to hydrogen producers to overcome the operating cost gap between low carbon hydrogen and high carbon fuels. It cannot be accessed through an application to Strand 2 of the NZHF.
More information on the hydrogen production business model can be found here.
Scope
Would methanol to hydrogen or hydrogen from electrochemical production pathways be eligible for this competition?
It is unlikely that methanol to hydrogen or hydrogen from electrochemical production pathways would be eligible due to the emissions associated with creating the feedstock (methanol or other electrochemical feedstocks).
Would a project producing hydrogen through cavitation be supported by this ompetition?
Cavitation is not a listed production pathway in the Low Carbon Hydrogen Standard version 2 (LCHS V2) and is therefore not supported by the NZHF Strands 1 and 2 competitions.
Other hydrogen production pathways may also be able to meet the GHG emissions threshold and criteria of the LCHS V2. Stakeholders wishing to add production pathways to this list are invited to submit evidence to DESNZ via hydrogenproduction@beis.gov.uk. Please view Chapter 3 of the Low Carbon Hydrogen Standard Version 2 guidance document for more information about the evidence required. Please note that new pathways would not be included in the LCHS V2 in time for this competition window, however.
For electrolysis projects, is renewable energy production equipment (e.g. wind turbines) included within the funding scope for strand 2?
We will not provide CAPEX for costs for electricity generation assets such as wind farm, turbine acquisition or solar array.
What is the expected Financial Investment Dcision (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 by ‘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.
Eligibility
Is the fund suitable for hydrogen production when the production will be used on the same industrial site by the same hydrogen producer (i.e. not sold to an ‘offtaker’)?
A project producing hydrogen where the production will be used on the same industrial site by the same hydrogen producer would be eligible for support from this competition.
We would expect evidence of the use and necessity of the hydrogen they produce, and the burden of proof will depend on whether the projectis applying for strand 1 or 2.
If a project would need to incorporate a company in the UK, would they then be eligible?
To be eligible, a project must be registered in the UK and must carry out all of its project work in the UK.
If domestic markets do not exist at scale for derived product (Green Hydrogen or Green Ammonia) can a percentage of export content be allowed?
Hydrogen production projects targeting export opportunities will be eligible to apply to strand 2 of the NZHF but we would expect the project’s primary offtaker to be focused on domestic consumption.
What is the funding rate for large businesses?
For capital expenditure (CAPEX) support, you could get funding for your eligible project costs of up to 30% if you are a UK registered business of any size.
Does strand 2 need an end use for the hydrogen such as a burner and steam boiler combination?
Projects must intend to exploit the results from hydrogen production from or in the UK and be able to demonstrate relevantcommercial engagement. Projects will be expected to detail their engagement with primary offtakers, including a summary of the agreements that have been reached, and the use and necessity of the hydrogen by the potential offtakers connected to your project.
What is the maximum size of hydrogen production this competition will consider?
There is no limit on the size of hydrogen production this competition will consider.
Do intended participants in Strand 2 need to have participated in Strand 1 in earlier competition?
No. Strand 1 and Strand 2 are separate competitions. Strand 1 of the NZHF aims to grow the pipeline of projects in the UK by providing development support for FEED and post-FEED studies. Applicants supported through the NZHF strand 1 could, at a later date, be eligible to apply for further support through NZHF strand 2, HAR2 or the cluster sequencing process depending on the needs of their projects.
Can you please confirm when projects are required to take FID by?
Proects are expected to take FID within 3 months of receipt of a conditional grant offer letter. All funded activities must end completed by 31 March 2025 as projects will not be able to drawdown funding after this point.
Lead times for critical items, i.e. electrolysers, are currently looking around 18-24 months which makes the required completion date of 31 March 2025 potentially very tight. Are we able to request extensions?
The aim of this competition is to support low carbon hydrogen projects that can deploy on the basis of capital expenditure support and are able to start construction rapidly. Therefore we expect to award funding to projects which are able to meet the deadlines laid out in the competition brief.
Please clarify that 50% of the biogenic feedstock has to be waste or residue – for example does this mean if we used only energy crops such miscanthus, we would not be eligible?
Yes that is correct. Please see the annexes to guidance on the Low Carbon Hydrogen Standard Vrsion 2, Section 1.2 for further information.
The company is funded by both public (local authority) and private sector investors, can you please confirm if how the company applying for the funding is funded itself (public and private investors) would restrict or prohibit the company being eligible to receive funding?
The private sector company has to be the lead. Any funding received from the local authority would need to be considered in order to assess subsidy control compliance. Receipt of funding from a local authority would not necessarily preclude a project from receiving Strand 1 funding, but could reduce the amount of funding we could provide.
Will work done before 1 November 2023 be eligible for funding?
Expenditure incurred after the date you have received a notification letter on successfully passing the technical assessment but before you sign a Grant Offer Letter (GOL) may potentially count towards your total capital costs, subject to the consent of the Secretary of Sate and compliance with subsidy control rules. However, until your GOL is signed, any such spend would be entirely at your own risk. We cannot fund any costs incurred before the date you submit your application form.
Dates
Are we able to have an extension to the stated deadline?
Our competition milestones are absolute therefore, we are unable to change any of the competition dates.
When does the Net Zero Hydrogen Fund strand 2 (CAPEX) competition close?
Net Zero Hydrogen Fund strand 2 (CAPEX) will close on 7 June 2023 at 11am.
An extension is not possible, therefore please allow sufficient time to complete your application. If you experience any technical issues, contact the customer support services team before the deadline.
How to apply
What is expected in relation to the fugitive emissions associated with green hydrogen production?
Projects will need to provide a plan demonstrating how their hydrogen production plant will be designed and operated to ensure that fugitive hydroen emissions are kept as low as reasonably practical.
If our application is successful, how often will we be expected to report?
Successful projects should expect to report quarterly, with claims quarterly in arrears.
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.
