BP confirms work set to start on Aberdeen Hydrogen Hub

Final investment decision reached for major hydrogen project, just days after Essar Energy Transition moves forward with plans for hydrogen-ready combined heat and power plant

The UK's fledgling hydrogen industry has received a major boost after developers confirmed they are moving forward with two flagship projects.

Oil and gas giant BP yesterday announced its joint venture with Aberdeen City Council - BP Aberdeen Hydrogen Energy Limited - has reached a final investment decision for its proposed Aberdeen Hydrogen Hub project.

The planned hub is to feature a hydrogen production, storage and distribution facility, located at Hareness Road, Aberdeen, which will be powered by electricity generated at a solar farm to be installed on the former Ness landfill site.  

Construction activities are now expected to begin before the end of 2024, with the company aiming to start production of green hydrogen at the site from 2026.

The hub is expected to have potential to deliver up to around 300 tonnes of green hydrogen a year through the initial phase of the project, enough to fuel 25 buses and a similar number of other fleet vehicles a day.

"This is an exciting milestone for the project, Aberdeen, and its people," said Oliver Taylor, chief executive for BP Aberdeen Hydrogen Energy Limited. "Not only does the hydrogen hub support BP and Aberdeen City Council's shared ambition for the city's future, it also presents a growth opportunity for the region's supply chain and skills development."

His comments were echoed by Aberdeen City Council co-leader, Councillor Ian Yuill, who said: "This investment by the Council and BP is an important step towards the delivery of the Aberdeen Hydrogen Hub project. Aberdeen has been a leader among cities in bringing hydrogen to market for public transport and council fleet vehicles. This project is central to our vision to increase the supply and demand for hydrogen as a fuel in support of the city's net zero vision."

The news came just days after Essar Energy Transition (EET) announced the launch of EET Hydrogen Power, which it hailed as Europe's first hydrogen-ready combined heat and power plant (CHP).

The project is set to built at EET's Stanlow refinery, with the aim of construction being completed in 2027. The company said the investment would support EET Fuels' ambition of becoming the world's lowest carbon process refinery as well as the UK's leading low carbon hydrogen producer.

The facility is also expected to provide low carbon power to other industrial users in the region.

The project is set to be developed over two phases to ultimately reach a capacity of 125MW of power while also providing 6,000 tonnes a day of steam. Replacing fossil gas with hydrogen would allow the CHP unit to deliver a reduction in emissions of 740,000 tonnes a year, EET said.

The company said the project was at the heart of its wider plans to invest $3bn in energy transition initiatives across North West England, including its plans to provide an initial 1.35GW of blue and green hydrogen production capacity.

"Launching EET Hydrogen Power shows the progress that Essar Energy Transition is making in delivering against its commitment to put the UK at the forefront of low carbon energy," said Tony Fountain, managing partner of Essar Energy Transition. "EET Hydrogen Power helps bring this commitment to life and demonstrates our intention to globally showcase the pathway to decarbonising vital high emitting industries."

The new projects form part of a major pipeline of hydrogen and carbon capture and storage projects that are hoping to advance in the coming months.  

Developers have repeatedly argued they are ready to make final investment decisions, but require clarity on the regulatory framework and long term contract arrangements under which they will operate before they can proceed. The new Labour government is now widely expected to finalise the policy framework and subsidy arrangements for a series of projects focused on two industrial decarbonisation hubs that were selected by the previous government.

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