A lack of movement on carbon capture and storage (CCS) could be slowing the UK’s adoption of low carbon hydrogen.
A senior figure at oil giant Shell (LON: SHEL) told Westminster’s Scottish Affairs Committee recently that the pace of hydrogen deployment is currently tied to the government’s CCS sequencing process.
Tracks and Phases
Two industrial CCS clusters – the East Coast Cluster and HyNet – were selcetd last year to receive funding – they comprise the Track 1 process.
It is hoped that the two initiatives, located in the north-east and north-west of England, will both be up and running by the middle of the decade.
The Scottish Cluster, which has Aberdeenshire’s Acorn project at its heart, only made the reserve list.
There is an expectation though that it will be in pole position next time and partners are currently waiting for information about a Track 2 competition.
As part of the ‘Phase 2’ process, specific low carbon projects applied to connect and use the CCS technology that will be on offer from the ‘Track 1’ clusters.
When the time comes, it means schemes, including blue hydrogen initiatives, will be able to safely and securely lock away their emissions.
A slow process
It is far from a quick process though, and there are concerns that the more time it takes, the more chance of the UK’s hydrogen opportunity slipping away.
Bethan Vasey, energy transition manager at Shell, said: “Blue hydrogen, from a technology perspective, is ready for deployment at scale now.
“There are several large units operational worldwide, but it is the policy framework and the ‘Tracks’ that are controlling the pace of deployment of blue hydrogen.”
Pressed by Andrew Bowie, Conservative MP for West Aberdeenshire and Kincardine, as to what is “holding us back”, she added: “We’ve got the ‘Track 1’, ‘Track 2’ process. Shell has two major blue hydrogen projects in Scotland that we’re working on at St Fergus and at Fife.
“The hydrogen elements of the project have both qualified for ‘Track 1, Phase 2’, but obviously being linked to the Acorn project, we’re waiting for urgent clarity on how it can progress through the Track 2 process.”
More details about timelines for a ‘Track 2’ process have been promised this year, but as of yet nothing has been published.
What about Acorn?
It means that projects planning to tap into the Scottish Cluster, like the Grangemouth refinery and the Peterhead power plant, are currently being held back.
With that comes fears that hundreds of green jobs, promised as part of Scotland’s CCS development, will not materialise.
For its part, Shell has pledged to put its upstream business “in reverse” to deliver Acorn.
The project, based at the St Fergus gas terminal near Peterhead, plans to use the supermajor’s Goldeneye field to store carbon.
Shell is a partner in the project, alongside Harbour Energy, North Sea Midstream Partners, and project-lead Storegga.
Ms Vasey said: “There’s a huge opportunity, particularly for the north-east, but there is also risk if we don’t get it right, and that’s where this sense of responsibility and collaboration comes from.
She added: “Leveraging all the skills and experience that we have, but getting the timing and pace right – that’s going to be key. We’re going to need to work with government to create that clarity of strong project funnels, whether its hydrogen, ccs or offshore wind.”