Octopus Energy managed funds will invest up to £10mln in new joint venture HYRO Energy, Octopus Renewables Infrastructure Trust PLC (LSE:ORIT) said on Thursday.
HYRO will aim to build around 700MW of green hydrogen electrolyser capacity by 2030, with 30MW worth of its projects having already been shortlisted for government support.
Octopus Energy’s Renewables Infrastructure and Sky investment funds will collectively own 50% of HYRO after investing £5mln each, according to a statement. HYRO has been set up as a joint venture with developer Renewable Energy Systems.
The government is targeting 10GW (10,000MW) of low carbon hydrogen generation by 2030, of which 5GW will be green, meaning it is produced using renewable energy.
"Green hydrogen is expected to become a critical part of the energy transition,” commented Octopus Energy investment director Chris Gaydon.
“Whilst electrification should be the preferred solution to decarbonisation wherever possible, there are some sectors of the economy, including heavy industry, where this is not always possible, and green hydrogen has a huge role to play here."
FTSE 250-listed Octopus Renewables added itself and Sky, which is private, would have exclusive rights to further invest in HYRO under the deal.
HYRO meanwhile, will find out if it has been awarded grants under the government's Hydrogen Production Business Model in the fourth quarter of this year.
Octopus Renewables rose 1% to 99p following the news.