Construction is expected to kick off this year on the hydrogen-generating facility, in what is being described as a “defining milestone” for the West Wales energy sector.
The plant, developed by MorGen Energy, will be built on the site of a former oil refinery at the Impala terminal, previously Puma Energy.
MorGen say this “significant investment” is poised to create 60 jobs during the construction phase alone, providing a major boost to the local economy.
The company say that the new plant will be up and running by early 2028, and is set to produce approximately 2,000 tonnes per annum of low-carbon hydrogen, compliant with the UK’s Low Carbon Hydrogen Standard.
Once completed, the facility will support up to 10 permanent, highly skilled roles, according to the developers.
The hydrogen will be used across a broad range of applications, including port decarbonisation, industrial heating, manufacturing and chemical feedstock.
The West Wales Hydrogen project is among the first in the UK to receive the green light from investors, backed by a 15-year government revenue guarantee.
Welsh Secretary Jo Stevens hailed the project, stating it will “create jobs and help grow the Welsh economy.”
Luciana Ciubotariu, CEO of Celtic Freeport, welcomed the move, noting its importance for the local tax site.
“MorGen Energy’s decision is another major step forward for the hydrogen economy in South West Wales,” she said.
Ms Ciubotariu added that projects within the Milford Haven Tax Site demonstrate how the Celtic Freeport is accelerating decarbonisation while creating high-value jobs.
The 20MW plant is expected to produce approximately 2,000 tonnes of low-carbon hydrogen annually, powered primarily by UK windfarms.
This hydrogen will be used to decarbonise heavy industry, including port operations, industrial heating, and manufacturing across South Wales.
The plant will produce hydrogen through electrolysis, a process that splits water into hydrogen and oxygen using renewable electricity.
Sheffield-based ITM Power has been selected to supply the electrolyser system, providing a further boost to UK manufacturing and technology.
This clean energy process is expected to achieve more than 15,000 tonnes of CO2e emissions savings annually, according to the developers.
Energy Minister Michael Shanks emphasised the importance of hydrogen in the UK’s energy strategy.
He said backing hydrogen was “crucial in de-carbonising industry, driving investment, boosting our energy security and creating hundreds of jobs in our industrial heartlands.”
Shanks added that this investment demonstrates how Wales is embracing the clean energy transition, creating new opportunities for local communities.
Werner Lieberherr, CEO of MorGen Energy, described the investment decision as a “defining milestone” for the company and the UK hydrogen sector.
He highlighted that it shows green hydrogen projects in the UK can be delivered as “bankable infrastructure investments.”
The project’s location within the Celtic Freeport area means it will benefit from existing infrastructure in Milford Haven, including 63 storage tanks and a comprehensive network of pipelines.
This development marks a significant step forward for renewable energy in West Wales, positioning the region at the forefront of the green technology revolution.
Local contractors are expected to play a key role in the construction, providing a direct boost to the Welsh economy and creating further opportunities.
