Protium has enjoyed the largest ever funding round in the UK for a hydrogen energy company, securing over £40m investment to expand its portfolio of green projects – which already generates over 250 MW.
This includes its flagship green hydrogen development in Magor South Wales with beer giant Budweiser and its 40 MW green hydrogen development in Teeside, both of which Protium is seeking to further develop.
It will also fund plans scale-up its teams regionally through the UK and Europe, and boost its in-house digital capabilities, and contribute to a pipeline of future projects.
The company designs, develops, finances, owns and operates green hydrogen and renewable energy infrastructure assets.
It secured £40.5m earlier this month with the help of SWEN Capital Partners, confirming its position as the country’s biggest hydrogen specialist.
The funding round comes amid a flurry of activity in the hydrogen sector, after two London-based investment firms pumped £10m into German hydrogen company HH2E last month, while Uniper and Shell have joined forces this year to develop blue hydrogen production.
Hydrogen is a key feature of the government’s security supply strategy, which was unveiled earlier this year following Russia’s invasion of Ukraine.
The government wants to ramp up renewable generation and domestic fossil fuel output to reduce its reliance on overseas suppliers, and insulate the economy from market volatility.
This includes doubling hydrogen capacity to 10GW by the end of the decade.
However, Chris Jackson, chief executive and founder of Protium told City A.M., that government messaging on hydrogen was “not particularly helpful”, due to its lack of differentiation between green hydrogen and blue hydrogen.
Instead, Jackson argued the funding’s round success reflected investor appetite in hydrogen and in the UK reaching its net zero goals, rather than government strategy.
He said: “I think it’s clients are driving the industry to say ‘We need to get to net zero carbon solutions? What can you do to help us?’ I think that is what has helped get investors really excited and motivated over the line. That’s how we’ve been able to secure funding. I think government has played a role in that through pushing for net zero and through the carbon budgets, but I don’t think the hydrogen strategy in and of itself has made a huge difference.”
Blue hydrogen could threaten UK energy independence
Blue hydrogen is created when natural gas is split into hydrogen and CO2, while green hydrogen is formed by splitting water into hydrogen and oxygen through renewable electricity.
Jackson argued that boosting blue hydrogen will prevent the UK from establishing its energy independence, to the detriment of the country’s supply security and decarbonisation efforts.
He explained: “If we go for a blue hydrogen strategy, when we’re already a natural gas importer, we will actually continue to import more natural gas as the North Sea declines. So, blue hydrogen is really a vote for a fuel import strategy, where we are constantly paying a price premium to external producers of hydrogen and natural gas.”
Commenting specifically on the funding round, Jackson believed it provided the firm with “a material runway” so the company can focus on getting a number of projects through the planning and permitting process.
He said: “We’ve always been quite ambitious and saying we want to build a very significant pipeline of projects.”
Alongside the funding, the company has also made two new board appointments.
Protium has named Steve Barclay, head of principal structuring and investments at Barclays, and Oliver Aubert, managing director at SWEN Capital Partners, to its top table.
Ahead of the funding round, Protium also appointed Claire Perry O’Neill to its advisory board.
O’Neill was the government minister responsible for energy and clean growth until 2020.
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