Accelerating Transition to Hydrogen and a Commercial Property Energy Refit Programme

Creating the conditions for a transition to a carbon neutral economy in the CCR, using low carbon energy are considered a key enabler of economic regeneration and fundamental to improving the health and wellbeing of our communities.

In the same way that the region has areas of commercial and industrial strength that are capable of competing at a UK and international level we also have all the ingredients to develop similar growth and opportunity in the energy and environment sector.

The region has a large number of significant manufacturers who use high volumes of process gas, including Celsa, Rockwool, Dow Corning, Tarmac and Tata in Newport. It is also home to a thriving commercial and finance sector with large units of office accommodation rife for retrofit.

Capability within the region can harness industrial fuel switching as a catalyst to deploy and distribute hydrogen into wider energy demand sectors – delivering accelerated, optimised and lowest cost decarbonisation alongside renewable electricity and economic energy efficiency. Wales & West Utilities are committed to transitioning large parts of their network to hydrogen, with recent regulatory price control determinations meaning they can start laying the first hydrogen pipes within the next 5 years.

The South Wales Industrial Cluster through its Deployment and Cluster Plan Projects led by Costain and CR Plus respectively are developing proposals to produce Blue and Green Hydrogen at scale in various location across South Wales. This work will inform and help deliver the hydrogen transition across the CCR.

Introduction of a “Green Deal” energy efficiency retrofit programme integrating renewable energy sources into commercial properties using the business rates mechanisms for recovery of the transition funding.
Derivation of a series of trial solutions for transitioning to alternative fuel sources, including heating buildings with hydrogen heat pumps and hybrid technologies.
Growing demand for hydrogen will support further expansion of the customer base and supply chain into target areas such as domestic heating, transport fuels and flexible power generation.

Requirements

£30m – For kick start funding in order to be investment ready, with engineering and business requirements on an anchor site. This would enable the optimum industrial combinations and stakeholder buy in.
£500m – For a capital pot (£375k of which repayable over 15 years) to incentivise business customer take up.
Derogations – On arrangements for charging and collecting Business Rates to finance a revolving fund for retrofit.