The United Kingdom’s hydrogen strategy is increasingly shifting from policy commitments toward industrial deployment, with a £50 million green hydrogen production facility scheduled to begin construction later this year at Milford Haven in southwest Wales.
The project highlights a broader trend across Europe of repurposing legacy fossil fuel infrastructure to support low carbon energy production while leveraging existing industrial assets to reduce development costs.
The West Wales Hydrogen project will be built on land at the Impala Terminal within the Port of Milford Haven, transforming part of a former oil refinery site into one of the UK’s early commercial scale green hydrogen production facilities. Developed by MorGen Energy, a Zurich based company established in 2021 to develop large scale hydrogen projects across Europe, the facility is expected to enter operation in early 2028.
The choice of location reflects a growing recognition that hydrogen projects benefit from existing industrial infrastructure rather than entirely new developments. The former Puma Energy terminal already provides storage facilities, electricity connections, and port infrastructure that can be adapted for hydrogen production, reducing capital expenditure and shortening project development timelines compared with greenfield sites.
This strategy addresses one of the key challenges facing the hydrogen sector. Green hydrogen production remains significantly more expensive than conventional hydrogen, making project economics highly sensitive to infrastructure costs. Reusing existing industrial assets can improve project viability while accelerating deployment.
Developers estimate the project will create around 60 jobs during construction and approximately 10 permanent operational positions once the facility is commissioned. While relatively modest from an employment perspective, the investment contributes to the gradual industrial transition of Milford Haven, a region historically associated with oil refining and natural gas imports.
The project also aligns with the objectives of the Celtic Freeport, which encompasses Milford Haven and Port Talbot. Freeports are intended to attract investment in advanced manufacturing, clean energy, and export oriented industries through tax incentives and streamlined planning processes. Hydrogen production has emerged as one of the sectors expected to benefit from this framework, particularly where access to ports can facilitate future hydrogen or derivative fuel exports.
Milford Haven already occupies a strategically important position within the UK’s energy system. As the country’s largest energy port, it hosts major liquefied natural gas import terminals that have played a critical role in maintaining energy security, particularly following the disruption of European gas markets in recent years. The emergence of hydrogen production alongside existing gas infrastructure reflects a broader effort to diversify the region’s energy portfolio while preserving its role as a national energy hub.
The development illustrates how hydrogen deployment in the UK is increasingly concentrating around established industrial clusters. Ports offer multiple advantages, including access to renewable electricity, industrial customers, transportation infrastructure, and potential export markets. These characteristics can improve hydrogen demand certainty while reducing logistics costs compared with inland developments.
However, the long term success of projects such as West Wales Hydrogen will ultimately depend on demand growth. Across Europe, many hydrogen production projects have advanced more quickly than confirmed industrial offtake agreements. While government strategies envision hydrogen playing an expanding role in industrial decarbonization, heavy transport, and potentially power generation, large scale consumption remains in the early stages of development.
The UK has sought to address this challenge through a combination of production support mechanisms, industrial decarbonization initiatives, and investments in hydrogen transport infrastructure. Connecting production facilities with reliable industrial demand remains essential if early commercial projects are to achieve sustained operation without prolonged dependence on public support.
For MorGen Energy, the Milford Haven development represents part of a broader strategy to establish commercial hydrogen production capacity across Europe. For the UK, the project serves as another step in transforming existing fossil fuel infrastructure into assets capable of supporting a lower carbon energy system.
