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.
This includes its flagship green hydrogen development in Magor South Wales with beer giant Budweiser and its green hydrogen development in Teeside, both of which Protium is seeking to further develop.
It will also fund plans to scale-up its teams regionally through the UK and Europe, and boost its in-house digital capabilities.
The company specialises in green hydrogen and renewable energy infrastructure assets – and has a pipeline of 250 MW in its portfolio.
It secured £40.5m earlier this month with the help of SWEN Capital Partners, amid a flurry of activity in the hydrogen sector – including at rival firms.
Last month, two London-based investment firms pumped £10m into German hydrogen company HH2E, while Uniper and Shell have joined forces this year to develop blue hydrogen production in the UK.
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 both 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 – which is what Protium specialises in.
Its potential uses include as fuel for transport, as a power source for domestic consumers, and can be turned into green ammonia for use as a fertiliser.
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 Steven Poulter, 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.