The Hydrogen Production Revenue Support (Directions, Eligibility and Counterparty) Regulations 2023

PART 5 THE LOW CARBON HYDROGEN STRIKE PRICE

Meaning of “low carbon hydrogen strike price”

8.—(1) In this Part “ low carbon hydrogen strike price” means the price determined under a hydrogen production revenue support contract expressed in pounds sterling per megawatt hour, so as to ascertain the amount, if any, which is payable under the contract by the hydrogen production counterparty or the eligible low carbon hydrogen producer in respect of hydrogen produced by the eligible low carbon hydrogen producer.

(2) The hydrogen production counterparty must enter onto the register—

(a) the low carbon hydrogen strike price determined on the coming into existence of the contract (or, where this is not available, the formula used to calculate it); and

(b) as soon as reasonably practicable after the last day of each calendar month, the low carbon hydrogen strike price prevailing on that day.

9.—(1) This paragraph only applies in a case where, pursuant to a hydrogen production revenue support contract, the facility producing the hydrogen involves the capture and storage of carbon dioxide.

(2) The hydrogen production counterparty must enter onto the register—

(a) the gas reference price (or the source of the gas reference price);

(b) the natural gas multiplier; and

(c) the non-gas strike price.

(3) In this paragraph—

“gas reference price” means the price of feedstock used in the calculation of the low carbon hydrogen strike price as set by, or determined pursuant to, the hydrogen production revenue support contract;

“natural gas multiplier” means the multiplier as set by, or determined pursuant to, the hydrogen production revenue support contract which is to be applied to the gas reference price in the process of calculating the low carbon hydrogen strike price; and

“non-gas strike price” is the price arrived at by deducting from the low carbon hydrogen strike price the product of the calculation of the gas reference price multiplied by the natural gas multiplier.

Storage and transport costs

10.  The hydrogen production counterparty must, where applicable, enter onto the register in respect of each hydrogen production revenue support contract—

(a) the estimate of the cost of storage infrastructure provided to the counterparty by the Secretary of State under regulation 8(2) (estimate of storage and transport costs to be provided by the Secretary of State); and

(b) the estimate of the cost of transport infrastructure provided to the counterparty by the Secretary of State under regulation 8(2).

Sales cap in respect of the production of hydrogen under a hydrogen production revenue support contract

11.  The hydrogen production counterparty must, in respect of each hydrogen production revenue support contract, enter onto the register the maximum hydrogen production for the term of the hydrogen production revenue support contract agreed pursuant to the terms of that contract together with any subsequent adjustment.