Last December, the government pledged to create an H2P business model, based on a dispatchable power agreement (DPA) framework, and launched a call for early projects last April.

The government is now asking industry how H2P plants should be categorised in the Capacity Market, whether as combustion units, blending projects, fuel cells or closed-loop systems, and what de-rating factors should apply to each.

It is also seeking views on how reliability should be treated where plants have a natural gas back-up, as well as whether existing technology classes are sufficient or new ones are needed.

The government said this will “inform potential changes to the CM to enable participation,” adding that it is also consulting on a new approach for determining the technical reliability of interconnectors for the purpose of setting their de-rating factors.

Introduced in 2014, the CM ensures a reliable electric supply by paying providers to be available when needed. Technology classes and de-rating factors determine how much capacity revenue projects can earn.

Currently, H2P isn’t formally included. If it were, plants could bid in auctions for capacity payments, giving them a guaranteed revenue stream during periods of system stress.

The call is open to energy stakeholders, consumer groups and academia. Responses are due by November 27, 2025, with outcomes expected to inform the 2026 Capacity Market prequalification round.

The consultation sits within the UK’s wider Clean Power by 2030 mission and its target of reaching 10GW of low-carbon hydrogen capacity by the end of the decade.

The next milestone will be the launch of the H2P business model in 2026, designed to kick-start early projects, with the government signalling that long-term deployment will ultimately rely on the Capacity Market as the enduring support framework.