Global investment manager Schroders’ renewable infrastructure investment unit Schroders Greencoat and energy infrastructure developer Carlton Power announced the formation of Green Hydrogen Energy Company Ltd (GHECO), a new joint venture aimed at developing green hydrogen projects in the UK.
Schroders and Carlton Power said that they aim to build a project portfolio reaching 500 MW by 2030, and the companies have announced a £200 million commitment to the partnership from funds managed by Schroders Greencoat.
Hydrogen is viewed as one of the key building blocks of the transition to a cleaner energy future, particularly for sectors with difficult to abate emissions, in which renewable energy solutions such as wind or solar are less practical, such as metals manufacturing and heavy transport. Around 90 million metric tons of hydrogen are produced annually, although the vast majority is extracted using fossil fuels, which create pollutants and GHG emissions. The development of clean hydrogen capacity, such as green hydrogen, which uses renewable energy to power the process to extract hydrogen from other materials, will require massive investments in areas including infrastructure, electrolysis, and transport.
The development of hydrogen capacity forms part of the UK’s energy security strategy, unveiled last year, which included plans to reach 10 GW of low hydrogen production capacity by 2030. The UK also launched a Hydrogen Strategy in 2021, aimed at promoting the development and use of hydrogen as a major energy source to help fuel a decarbonized economy, with plans to establish a £240 million Net Zero Hydrogen Fund.
James Samworth, Partner and co-head of Schroders Greencoat’s Energy Transition team, said:
“Hydrogen is a huge opportunity and will play a centrally important part in the energy transition. This partnership provides the perfect platform for us to enter the space, accelerate the development of green hydrogen projects here in the UK, and provide investors with access to this growing industry.”
Under the new JV, Carlton Power will manage the development, construction and operation of current and future green hydrogen projects, while Schroders Greencoat will be responsible for financing the projects, and contributing its UK renewable energy expertise.
The companies outlined the first three projects for the new JV, in Trafford, Barrow and Langage, which are expected to enter into commercial operation in 2025, supplying green hydrogen to local industrial and manufacturing companies, and with the potential to supply hydrogen to other businesses in the area as well as local transport operators.
Keith Clarke, Founder & Chief Executive of Carlton Power said:
“We are delighted to be joining forces with Schroders Greencoat to develop a significant green hydrogen portfolio in the UK.”