London—The UK government underlined its determination to support fossil fuel-based hydrogen production with carbon capture and storage March 24, ramping up funding for the energy carrier in its GBP16 billion ($22 billion) North Sea Transition Deal.
A week earlier, it had exclusively backed research into fossil-based hydrogen projects with CCS in its Industrial Decarbonisation Strategy, looking to maximize jobs and infrastructure across established oil, gas and heavy industry clusters in Scotland, South Wales, Merseyside, Humber and Teesside.Now about GBP10 billion of the North Sea Transition Deal's GBP16 billion of joint state/industry funding is to go to hydrogen production, with clear preference for natural gas-based projects.
"We are happy to be supporting projects like Acorn, Hynet, Net Zero Teesside and Zero Carbon Humber," all carbon capture projects with hydrogen production potential, said Oil & Gas Authority chief executive Andy Samuel.
BP was already developing plans for the UK's largest natural gas-based hydrogen production facility on Teesside, the government said.
This could represent up to a fifth of the UK's 5 GW hydrogen production capacity target by 2030, capturing and storing up to 2 million mt of CO2 in a year, it said.
A 1 GW natural gas-based hydrogen facility with CCS would produce up to 260,000 mt/year of hydrogen, BP told S&P Global Platts.
"Our studies show how the UK Continental Shelf can provide 60% of the UK's overall carbon reduction requirements to meet Net Zero 2050, through electrification, carbon capture and storage, hydrogen and offshore wind," Samuel said.
This estimate factored previous government commitments to install 40 GW of offshore wind by 2030, from 10 GW at present, and establish two CCS clusters by the mid-2020s.
Taking a positive view of the Acorn CCS project at the St Fergus Gas Terminal, the government said it "will deliver" low-cost CCS by 2023, taking advantage of existing oil and gas infrastructure. Around 35% of the UK's natural gas comes ashore at St Fergus.
Elsewhere, the deal allocated up to GBP3 billion to replace fossil fuel-based power supplies on oil and gas platforms with renewable energy, with no detail yet on how this would be deployed, but conceivably opening the way for offshore electrolysis of wind power, and the production of renewable hydrogen, in the longer term.
