Thursday 15 December 2022

Low carbon hydrogen could heat up to 20 million homes and businesses across London and the South East of England for decades to come, according to a new industry report.

The Bacton Energy Hub (BEH), a Carbon Capture and Storage (CCS) hydrogen project, located on the coast of Norfolk, could not only help to secure the UK’s energy supply but also play a major role in significantly reducing greenhouse gas emissions.

Currently the National Transmission System (NTS), supplying gas to homes and businesses in London and the South East of England, consists largely of methane. However, it is possible that by 2030 hydrogen produced at Bacton could be blended into the NTS, helping the transition to net zero while ensuring energy security.

Blending 20% hydrogen into the NTS creates the potential to abate 1.6 million tonnes per annum (MTpa) of CO2 by 2030, rising to 17MTpa by 2050.

CCS-enabled hydrogen – produced from natural gas with carbon dioxide captured and stored – would form the early supply until the early 2040s, after which electrolytic hydrogen – produced through a process of splitting water into hydrogen and oxygen, called electrolysis – would take over.

CCS-enabled hydrogen production creates CO2 as a by-product and Bacton offers plentiful potential carbon storage fields – supported by the North Sea Transition Authority's (NSTA) Carbon Storage Licensing Round – which can meet those needs.

There are undeveloped gas reserves of up to 2 trillion cubic feet at Bacton, which could be used as feedstock for the production of CCS-enabled hydrogen. The NSTA’s 33rd Licensing Round, launched in October 2022, included four priority clusters in the Southern North Sea – areas with known hydrocarbons with the potential to be developed quickly – so the necessary gas resource is readily available.

The Climate Change Committee suggested that carbon storage can play an important role in scaling up the hydrogen industry. The use of hydrogen in boilers can save up to 85% of emissions compared to natural gas use in boilers.

The scale of the project is such that it will create hundreds of green jobs in East Anglia, providing a significant boost to the local economy.

The business opportunity report also highlights the potential that interconnectors to Europe could unlock, which could see Bacton develop into a CO2 import hub, storing gas transported from western Europe and importing feedstock for hydrogen production.

Wind power is also a significant part of the project; by 2030 the East of England is expected to supply 15GW of offshore wind capacity towards the UK’s target of 50GW. This growth in offshore wind will help support the build out opportunity through the generation of electrolytic hydrogen.

The report was produced following work, supported by the NSTA, looking into essential issues around hydrogen supply and demand, infrastructure requirements, opportunities for the supply chain and regulatory issues by Progressive Energy Limited, Summit Energy Evolution Limited (a Sumitomo Corporation Company), Xodus, Petrofac, Turner & Townsend, and Energy Transition Advisory.

The report calculates that the core project would cost £500m and can be delivered by 2030 if a consortium forms by H1 in 2023 and a final investment decision is reached by Q3 2025.

The NSTA, which launched the project in 2020, published the report (14 December) at a special event in Norwich.