BP announces 500MW UK green hydrogen project

ICIS Editorial

29-Nov-2021

LONDON (ICIS)–British oil major BP announced on Monday plans for a 500MW green hydrogen plant at Teesside that is expected to be online by 2030, substantially increasing the UK’s renewable hydrogen capacity.

BP said that the project, named HyGreen Teesside, will undergo final investment decision by 2023. If the full 500MW of capacity is online by the end of the decade, HyGreen will be one of the largest green hydrogen projects in the UK.

HYGREEN TEESSIDE

The HyGreen Teesside project is targeting two capacity development phases. Firstly, following FID in 2023, 60MW of electrolysis capacity is due to be online by 2025. Thereafter the project could ramp up to 500MW by 2030.

This would bring BP’s total low-carbon hydrogen capacity at Teesside to 1.5GW by the end of the decade. The oil major is also aiming to have 1GW of blue hydrogen capacity online via the H2Teesside project.

When speaking to ICIS about the different uses of the blue and green hydrogen at Teesside, BP said that HyGreen will serve both transport and early industrial customers, while H2Teesside’s focus is industrial offtakers. Both could serve natural gas grid blending as and when regulations allow.

“The goal is to make the hydrogen [at Teesside] low carbon – this means using renewable power to make green hydrogen and building high-capture rate plants with low methane intensity feed gas for blue hydrogen in line with UK low carbon hydrogen standards,” BP added.

Green hydrogen production relies on renewables output, meaning generation can be intermittent. Therefore, hydrogen storage is vital for most green hydrogen projects. “We will be looking at [hydrogen] storage options; one of the many advantages of Teesside is the availability of salt cavern storage options,” BP said.

Lastly, BP noted two key UK government policies that would support green hydrogen production. Firstly, the renewable transport fuel obligation, and secondly the hydrogen business model. “We expected to get clarification on both of these prior to FID,” BP told ICIS.

The UK government is expected to release details of its hydrogen business model – which will fundamentally aim to support the establishment of a UK hydrogen market via some form of contracts for difference – by 2022.

UK HYDROGEN PRODUCTION

In October the UK government announced two industrial cluster projects to receive track 1 status for its cluster sequencing programme, which aims to establish two carbon capture and storage (CCS) projects by 2025.

CCS is a fundamental component for blue hydrogen production, therefore giving the UK market a clear indication of which blue hydrogen projects could be online by 2030.

Total blue hydrogen capacity within the successful clusters was 6.6GW, well exceeding the UK government’s 5GW production target by the end of the year.

However, with the addition of HyGreen Teesside, total hydrogen production capacity from projects within the selected clusters could reach 7.1GW. Jake Stones and Rioko Moscardini

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