© Supplied by EET Hydrogen The UK’s decarbonisation mission positions the North West carbon capture investment opportunity as a leading light. There is a unique convergence of government backing and industrial involvement. But success hinges on all partners – government, companies and communities – learning from past failures.
There will be challenges in project delivery and inevitably setbacks will occur. To what extent are government and stakeholders willing to accept missteps? Project delivery is already more challenging than had been thought. The government conceded this year that the target of 20-30 million tonnes per annum (mtpa) of CCS by 2030 is impossible.
Perhaps the single most important intervention in the region is the government’s commitment to decarbonisation. It has vowed to provide £21.7 billion for Track-1 CCS projects over 25 years. This is important on a practical level – it demonstrates the depth of state support for these long-term plans. But it is also a signal of government support for regional decarbonisation.
HyNet won the government’s support in the North West. It will share the £21.7bn with the East Coast Cluster, in Humber and Tees Valley.
HyNet covers CO2 transport and storage, in addition to hydrogen plans. It links up existing infrastructure with plans for new facilities and aims to begin storing CO2 in mid-2028, with initial volumes of up to 4.5 mtpa. This could rise to 10 mtpa after 2030.
Opportunity and commitment
It all starts with location. The North West has an industrial heritage that provides a head start for these plans, with energy sector knowledge running from Eni’s Douglas fields through to wind plans and the Stanlow refinery, at Ellesmere Port.
There are three reasons driving HyNet’s appeal according to David Parkin, project director at Progressive Energy.
“One is the depleted oil and gas reservoir offshore to store CO2,” says Parkin. “Second, there are really good salt deposits onshore, for large-scale underground storage of hydrogen, in Cheshire. And thirdly, there’s a strong concentration of energy in terms of industry around Ellesmere and Runcorn, with the wider manufacturing industry across the North West region.”
Progressive is the architect and co-ordinating partner of HyNet and has been working on the project for more than eight years. It had originally considered the Humber but ended up pursuing the North West, Parkin explains.
CCS foundation
The breakthrough for CCS was when thinking evolved for the technology. Previously, at Longannet and Peterhead, the focus had been on decarbonising power.
In 2016, the government moved into the endorsement of decarbonisation clusters instead, Parkin says. The idea was to provide carbon capture as a regulated utility, able to command a low cost of capital and be investable, while providing multiple users with a system to remove CO2.
The decision to cut those previous CCS projects continues to be a millstone for government. Having dropped CCS plans in the past, there is some scepticism around support.
Net Zero Energy Systems director Grant Spence was involved in previous CCS plans, including Peterhead. The government in 2015 decided to drop this carbon capture plan. Spence explains his assumption that the decision to cancel the CCS competition was based on political requirements.
“Funding decisions are ultimately taken by Treasury, which bases its decisions on a wider perspective than energy. There are competing priorities.”
Is this time different? “Until we actually put spades in the ground it’s always possible for people to get cold feet, especially if it is thought there is a material risk that costs could spiral upwards.”
Up and in the running
The hydrogen plans presented in the HyNet North West project portfolio gave Spence grounds for optimism.
“It has been a tremendous achievement for EET, Progressive Energy and the other HyNet Alliance members to have progressed to the point of implementation. If they can get HyNet operational by 2028 as planned, then you could argue that’s taken them 10 years less to get hydrogen up and running than it has with CCUS.”
The country needs to get the the first CCUS and hydrogen project infrastructure in place “to provide a baseline to develop a regional pathway to net zero”, Spence continues.
“We need to progress these initial projects, but we also need to provide a glide path beyond the present competition process of picking winners and losers. Everybody needs to get to net zero. If we don’t provide them with the visibility of that, industries will move elsewhere and that would be devastating for the local economy.”
Lowest-cost pathway
There is always a question for government around spending money on projects – particularly given its competing needs. Treasury had to defend its CCS plans in April from parliamentary criticism.
The Treasury said support for the technology “keeps the UK on the lowest-cost pathway to meeting net zero and presents opportunities for growth in a future low-carbon global economy”.
If the country did not pursue CCS, other – more expensive – plans would be needed to abate carbon emissions, it continued.
The government has said CCS could provide 50,000 long-term jobs. HyNet expects to create 2,000.
© Supplied by HyNetThere are signs that industry is taking the plans seriously.
Final investment decisions (FIDs) are due in the next few months on plants to feed CO2 into the HyNet pipeline system. The next slate of projects will be the Track 1 expansion. This had 16 initial expressions of interest but has been whittled down to around ten.
“There isn’t enough space in the pipeline for all of them. That will be our next shortlist of projects and that will fill Eni’s initial pipeline capacity of 4.5 mtpa,” Parkin says.
There are also plans for a pipeline to run from the Peak Cluster to Morecambe Bay CCS project. “That will probably run very close to the HyNet pipeline, which just gives more capacity, more resilience and it’s a second CO2 system coming into the area.”
The region will capture CO2 from cement, refining, energy from waste – and also hydrogen.
Cleaning up
The North West carbon capture investment plans are anchored by delivering clean fuels or cleaning up industries.
Regional leadership has also helped deliver new industry. The Greater Manchester Hydrogen Partnership (GMHP) launched in 2013, bringing together Manchester Metropolitan University and the combined authority.
“It’s created a set of growth enablers,” says Manchester Met’s Amer Gaffar. “Research and innovation is key for us, so we’ve built this innovation facility that now supports 150-160 different businesses. They’re in various parts of the hydrogen value chain.”
Greater Manchester has a target of reaching net zero by 2038. To achieve this, Gaffar says, there is a need for a “whole system approach with a range of technologies”. Electricity will not meet all the system needs, he continues.
“We host multiple delegations from all over the world within our centre. Now there are 57 countries with hydrogen strategies and they all have the same level of ambition. We want to produce hydrogen. We want to support our innovation community, we want to support businesses.”
International co-operation will be a driving part of the North West’s hydrogen plans. “Our challenges are their challenges.”
Going local
Gaffar says companies such as Panasonic and Bosch were interested in working with UK industry. Bosch, for instances, wants to sell electrolysers in the UK.
“They make the stack. What they don’t have is a local supply chain to deliver it. We’re supporting that journey for lots of small, medium-sized UK enterprises to enter into the supply chain of an organisation like Bosch.”
The Manchester academic wrote a report on enabling the hydrogen industry recently. In it, the authors call for a “more co-ordinated, system-wide approach to realise hydrogen’s full potential; commercially, environmentally, and socially, as a pillar of the future energy system”.
To realise hydrogen plans, there is a need for regulatory reform and infrastructure investment, they say. “The current gas-focused regulatory framework is not equipped to manage the unique characteristics of hydrogen production, distribution, and use.”
Challenging times for industry has become an increasingly hot political topic. Amid concerns around deglobalisation, fostering domestic plans is important economically and to protect jobs.
The UK is struggling to sustain its industrial base. Scotland’s only refinery, Grangemouth, shut up shop in April. The steelworks in Port Talbot closed in September 2024 and the state had to step in to save the steel plant in Scunthorpe.
They all demonstrate what can happen when energy prices are high, decarbonisation a challenge and perhaps most importantly there is no overall vision.
Choreographing choices
In isolation, these projects – the carbon capture and hydrogen plans – would fail. To succeed, they must synchronise. Bringing the various pieces together at the right time poses a “challenge of choreography”, Parkin acknowledges.
He gives the example of the large-scale hydrogen plans.
“HPP2 unlocks the investment in Cadent’s hydrogen pipeline, which then unlocks Storengy’s Cheshire hydrogen store. But there’s no point in investing in the store, if you don’t have the molecules. There’s no point investing in the pipeline, if you don’t have the store.
© Supplied by Kent“That all needs to be choreographed. We’re working as a full-chain hydrogen system planner with government to sort the investment process and allocation mechanism to allow that to happen,” he says.
“We’ve got an opportunity to build infrastructure to protect those industries, like cement and chemicals and glass.”
There is a need to be open to a certain amount of ambiguity. “You need to be resilient to evolution. You need to work quite carefully and be tolerant of ambiguity. New spur lines will be added, some emitters will arrive, some will depart,” Parkin continues.
“An awful lot of what we’ve achieved as a cluster is mutual trust, without a particularly firm and strong governance, where everyone’s looked at each other moving forwards and in lockstep. We shouldn’t underestimate government’s role in that as well.”
The hydrogen plans give Spence grounds for optimism. “It looks like a standout success, with EET and the folks at Progressive. If they can get HyNet up and running you could argue that’s taken them ten years less to get hydrogen up and running than it did CO2.”
Government support helps backstop the challenge of synchronisation, helping companies take the leap.
Moving ahead
Delivering the big ideas, of hydrogen production and carbon storage, at HyNet will be crucial for local industry.
“We need to get the CO2 in place and hydrogen, that provides a baseline to let people build. We need those projects, but we also need to provide a glide path beyond the competition process, of picking winners and losers. Everybody needs to get to net zero. If we don’t provide them with the visibility of that, industries will move elsewhere and that would be devastating for the local economy,” Spence says.
A decarbonisation hub will provide leeway for large energy consumers to move ahead. But the UK can no longer provide the equipment needed to build out the hubs themselves.
© Supplied by United Living Group“Those large vessels and such, they’re not going to be made in the UK,” says Progressive’s senior project engineer Duncan Birtwistle. “But there are definitely opportunities for the more specialist side of things.”
He cites opportunities around operations and maintenance – in particular, the need to keep plants operating at 95% availability. “We’ve got firms out there really focusing on those operational aspects, they can deliver the performance required.”
Birtwistle cites the example of the contract to United Living for HyNet’s CCS pipeline and storage system. This should create another 300 jobs, with more indirect benefits.
There will be jobs and benefits to the local communities and companies from the North West carbon capture investment plans. But the risk appetite of those involved has not yet been fully tested. Things will go wrong and it will require support from all involved to navigate the challenges, not just to celebrating the benefits.
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