Investment decision support: Hydrogen offtaker analysis

A leading global offshore energy investor engaged LCP Delta to assess the commercial viability of a green hydrogen production project in the UK. As part of their early-stage investment appraisal, the client required an in-depth understanding of potential offtake markets, pricing dynamics, and future demand to determine whether to proceed with the multi-billion-pound development. LCP Delta’s analysis provided the necessary evidence base to inform a well-grounded investment decision.

Client needs and key question(s)

The client sought a robust view of future hydrogen offtake opportunities and commercial readiness across key sectors. Key questions included:

• What willingness exists among industrial consumers to switch to green hydrogen in the UK, and at what price point?
• What is the potential offtake demand by sector and geography, and how is this expected to evolve?
• How does the target project compare with other regional hydrogen supply initiatives in terms of competitiveness and market access?

What we did

LCP Delta delivered a commercial due diligence package focused on future hydrogen offtake potential:

• Energy demand and hydrogen conversion modelling: Forecasted sector-level energy demand and translated this into potential hydrogen volumes for key industrial sites and clusters.
• Competitive landscape assessment: Provided regional production forecasts to contextualise the target project within the emerging hydrogen supply market.
• Willingness to Pay (WTP) analysis: Assessed policy readiness, technology maturity, and cost sensitivity across potential offtaker sectors to provide an indicative hydrogen price customers are willing to pay over the forecast.

Our approach combined macroeconomic modelling with detailed market insights to build a clear picture of demand-side readiness and economic feasibility.

The results

Our findings enabled the client to:

• Understand the scale and timing of viable hydrogen demand across industrial sectors.
• Assess the commercial realities and constraints shaping offtake agreements.
• Benchmark their project against future supply and demand trends in a rapidly evolving market.

Based on our analysis, the client made the strategic decision to pause the proposed green hydrogen investment until market and policy conditions became more supportive of large-scale offtake.