NZHF
DESNZ · BEIS_0002_2122-Q2 · Last reported March 2024
Department page: Department for Energy Security and Net Zero
| Data as at | Rating | End date | Whole-life cost |
|---|---|---|---|
| March 2024 | Amber (NISTA's independent assessment) | 31 March 2025 | £242m (price basis not stated) |
Each year’s cost is shown with its price basis. Costs are not compared between years: the March 2024 and March 2025 reports state no price basis, and from March 2026 costs are in 2024/25 prices.
The department’s commentary
This is the department’s own commentary. It may use different prices from the table above, so its figures may not match.
March 2024
Rating: Compared to financial year 22/23-Q4, the Delivery Confidence Assessment rating at 23/24-Q4 remained at Amber(IPA rating). This is primarily due to the following factors. NZHF Strands 1 and 2 projects have up to date claimed significantly less funding than envisaged by initial project plans. Out of 15 projects that have been offered funding in the first competition round, 4 subsequently withdrew and most ongoing projects are experiencing minor to major delays. This is not uncommon with First of a Kind (FOAK) projects in nascent sectors. 3 projects have been completed. The department is closely engaging with ongoing projects to minimise and manage these delays. The successful projects from round 2 were announced in February 2024, and we are currently working with the projects to sign Grant Offer Letters (GOLs). There has already been a significant delay to the project start dates, so we are working with the relevant parties to speed up the GOL signing and manage the delays.
Schedule: Compared to financial year 22/23-Q4, the project's end-date at 23/24-Q4 remained schedule to finish on 2025-03-31. This is primarily due to the following factors. All NZHF Strands 1 and 2 projects were due to end in March 2025 at the latest. Projects from the first competition round have experienced delays in delivery by default rather than by exception, which appears to be characteristic of a nascent sector, and the round 2 projects are already seeing significant delays to their start dates, which will have a knock on effect on the end dates. We are putting in place appropriate mechanisms to manage the delays and spend to the projects post March 2025, as appropriate.
Cost: Compared to financial year 22/23-Q4, the project's departmental-agree Whole Life Cost at 23/24-Q4 remained at 242m. This is primarily due to the following factors. The NZHF is worth 240m of CDEL. This spend is now forecast up to financial year end 2025/26. The CDEL estimate reflects the expected spend on grants to support the deployment of UK Low Carbon Hydrogen. These have been forecast using the expected production costs within the BEIS Hydrogen Production Costs Report. The RDEL estimates reflect the forecasted delivery costs of the fund.
Source: IPA Annual Report 2023-24 (data)
Names, figures, dates, ratings and commentary are as the department reported them. Where a rating, cost or date is withheld, the file’s wording is shown. Every major project →