UK hydrogen projects are advancing, but key barriers are emerging that could delay investment decisions. Grid connection timelines remain uncertain, creating risks for project delivery and eligibility within support schemes.
Delays and lack of visibility over connection dates are making it difficult for developers to commit to final investment decisions.
At the same time, UK hydrogen projects face significant offtake challenges. Limited pipeline infrastructure means producers often depend on long-term agreements with a small number of local buyers, increasing exposure to demand risk and reducing flexibility.
This creates uncertainty for investors and complicates financing structures.
Electricity sourcing adds further pressure on UK hydrogen projects. Developers must balance cost, availability, and compliance with low-carbon standards, while reliance on grid power introduces price volatility and carbon intensity risks.
With electricity accounting for the majority of hydrogen production costs, securing stable and competitive power supply remains critical to project viability.
Source: Chingis Idrissov | Argus
