Statkraft Suspends Launch of New Green Hydrogen Initiatives Amid Market Uncertainty

Statkraft, the Norwegian state-owned energy giant, has suspended all new green hydrogen projects, citing significant market uncertainties. As part of this decision, the company revealed it will abandon most of its ventures within the green hydrogen sector. Statkraft’s pipeline spans several European markets, including Norway, Sweden, Germany, Italy, the Netherlands, and the UK.

Despite this shift, Statkraft will maintain its commitment to advancing its existing green hydrogen projects in the UK, with plans to secure investors for their construction and operation.

Among the key projects in Statkraft’s UK portfolio are:

• Scatsca Project: A 350mw electrolytic hydrogen-to-ammonia production facility located in the Shetland Islands, which the Scottish government’s funding has recently backed.

• Shetland Project: Another initiative in the Shetlands, recently shortlisted for support under the UK government’s second Hydrogen Allocation Round (HAR2).

• St Helens Project: Located at Pilkington’s Greengate Works glass factory, this project has also earned a spot on the HAR2 shortlist. It’s being developed through a joint venture—Grenian Hydrogen—between Statkraft, Progressive Energy, and Foresight. This venture, launched in 2023, aims to provide green hydrogen to industrial sectors.

Kevin O’Donovan, Statkraft’s UK managing director, said: “Statkraft has decided to end development of new green hydrogen projects across our portfolio.

“We will continue to develop our existing UK hydrogen projects, a market where there has been significant support from the UK and Scottish Governments, and seek investors to take them forward into construction and operation.

“We are committed to continuing with the other technologies and services we are well known for, including our leading markets and optimisation activities.”

Statkraft’s CEO and president Birgitte Ringstad Vartdal added: “After reducing the ambition level on green hydrogen development last year, we are experiencing even more uncertainty in the market.”

In the UK, 27 green hydrogen projects were recently selected to progress to the next phase of the government's Hydrogen Allocation Round 2 (HAR2) support scheme. These projects, spread across England, Scotland, and Wales, are poised to utilise hydrogen to decarbonise manufacturing and industrial processes, contributing to the battle against climate change.

Scottish Power, Uniper Hydrogen UK, Centrica Energy Storage, and EDF Renewables Hydrogen are prominent developers leading the charge. HAR2’s funding mechanism allows projects to apply for capital expenditure support through the Net Zero Hydrogen Fund and ongoing revenue assistance until the hydrogen levy is introduced in 2025, which will be applied to energy bills.

All 27 shortlisted projects focus on producing green hydrogen. They use electrolysis powered by renewable energy to convert water into hydrogen. The hydrogen produced will serve various industries, including glass manufacturing, brick production, ammonia synthesis, and the development of alternative aviation fuels.

Energy minister Sarah Jones said: “We are deploying hydrogen at a commercial scale for the first time – not just investing in technology – but investing in British jobs, our proud manufacturing communities and our energy security.

“From distilleries and sustainable aviation fuel to public transport and clean energy generation, hydrogen can power our everyday lives and unlock clean energy growth across the country as part of our Plan for Change.”