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Plans for green hydrogen facility at Flotta terminal could yield hundreds of jobs

© Supplied by Neil DavidsonFlotta green hydrogen
The Flotta terminal, which has served the oil and gas industry for more than 40 years, could soon be used to produce green hydrogen.

Hundreds of jobs could be created in Orkney as part of ambitious plans to create a green hydrogen hub on the island.

Scottish renewables consortium Offshore Wind Power Limited (OWPL) has confirmed it is studying using offshore wind in the production of the zero emissions fuel.

Comprised of oil and gas giant TotalEnergies (LSE: TTE – 44p), Macquarie’s (ASE: MQG – AUD 183) Green Investment Group and the Renewable Infrastructure Development Group (RIDG), the group was formed earlier this year in order to bid in the ScotWind leasing process.

The trio submitted a proposal to Crown Estate Scotland to develop the N1 plan option area, west of Orkney.

If successful, OWPL will develop the West of Orkney Windfarm, which could deliver renewable power to the Flotta Terminal, allowing green hydrogen to be produced on an industrial scale.

Plans to power the proposed Flotta Hydrogen Hub are being developed by the consortium, in partnership with Repsol Sinopec, the facility’s owner, and German energy company Uniper.

Despite currently being at the pre-Front End Engineering Design (FEED) stage, it’s hoped funding and approval for the project will be secured next year.

First hydrogen production and export is expected to follow in 2028/2029.

Although OWPL couldn’t give an exact employment figure, it said the plan is to create “hundreds of skilled jobs during both the construction and operations phases” of the Flotta Hydrogen Hub.

And while “full costings” still need to be developed, the offshore wind and hydrogen schemes have the potential to form a “multi-billion pound” development. Flotta green hydrogen

An artist’s impression of the Flotta Hydrogen HubJulien Pouget, senior vice president renewables, TotalEnergies said: “TotalEnergies believes in the potential of renewable offshore wind power to produce green hydrogen, supporting our companies to meet their ambition in terms of carbon neutrality.

“With our proposed West of Orkney windfarm, there is an opportunity to create one of the world’s first green hydrogen plants in Orkney. It is an exciting plan, and we look forward to working on it with our partners and Orkney stakeholders.”

OWPL published details of its ScotWind bid last month after the process closed to entrants in July.

With a planned installed capacity of 2 gigawatts (GW), the West of Orkney Windfarm has the potential to power more than two million homes.

In order to progress the project, OWPL has signed a memorandum of understanding with Orkney Harbour Authority and Scrabster Harbour Trust, near Thurso.

Crown Estate Scotland is expected to release the results of the ScotWind process in early 2022.

© Supplied by Neil Davidson
Ed Northam, head of Green Investment Group Europe.

Ed Northam, head of Green Investment Group Europe, said: “We believe that green hydrogen could provide a critical alternative route to market for some of Scotland’s largest offshore wind projects and play a significant role in creating wider economic benefits as the North Sea goes through its energy transition. We look forward to working with the Flotta partners to continue to develop this proposal.”

Ridg commercial director, Mike Hay.

Mike Hay, RIDG commercial director, commented: “The production of green hydrogen is a hugely exciting opportunity for both offshore wind and the Scottish supply chain. Projects with substantial capacity factors, such as the West of Orkney Windfarm, could deliver highly competitive power to facilities like the Flotta Hydrogen Hub which could, in turn, supply demand for hydrogen both nationally and internationally.

“We’ve therefore committed to working exclusively with our partners to investigate this opportunity thoroughly and have already completed cable routing assessments and nearshore geophysical surveys to better understand the practical aspects of project delivery.”

Repsol Sinopec said in July that “organisational changes” were afoot at the Flotta oil terminal in order to explore opportunities within the energy transition.

But the Spanish-Chinese joint venture firm underlined that it would try to “minimise staff reductions and will explore redeployment opportunities where possible”.

A figure for how many redundancies could be made at Flotta, which has served the oil and gas industry for more than 40 years, wasn’t given.

Flotta green hydrogen © Supplied by Neil Davidson
Plans to power the proposed Flotta Hydrogen Hub are being developed by OWPL in partnership with Repsol Sinopec, the facility?s owner, and German energy company Uniper.

José Luis Muñoz, chief executive of Repsol Sinopec, said: “We fully support our industry’s transition to clean, green energy and a secure future for skilled oil and gas workers in Scotland and across the UK.  We have a strategic roadmap, supported by our shareholders and aligned with each of their strategic ambitions, including energy transition.

“The Flotta Terminal has been in operation since 1976 and has made a significant contribution to Orkney’s economy and communities for more than 40 years.  This project would enable the terminal to be progressively transformed over time into a diversified energy hub where conventional oil and gas operations continue, co-existing alongside the development of a sustainable long-term green future for the facility.  The repurposing of Flotta will require local stakeholders support, retaining and upskilling the current workforce as well as the creation of long-term skilled jobs during both construction and hydrogen operations.”

Axel Wietfeld, CEO, Uniper Hydrogen added: “Uniper is a pioneer in the field of hydrogen production and we’re already bringing our expertise and experience to an ever-expanding portfolio of projects across a number of markets, in Europe and in the UK. The Flotta Hydrogen Hub is an exciting concept, with the potential to deliver green hydrogen for the domestic and export markets. We now await the outcome of the ScotWind offshore wind leasing round, in anticipation that the proposal can be then realised.”

The proposal is also being supported locally by EMEC Hydrogen, a cornerstone of Orkney’s renewables research.

Neil Kermode, managing director of EMEC said: “Orkney is well advanced in its ambition to be the global centre of excellence for research and demonstration of how the hydrogen economy of the future will work. We generated the world’s first tidal-powered green hydrogen in 2017 at EMEC’s tidal test site and have led various green hydrogen projects exploring generation, logistics and end use.

“For this project to go ahead, a number of vital elements will have to fall into place, including a market for green hydrogen. We are pleased to be collaborating with our offshore wind partners in pursuit of this goal and we are already in discussion with the Scottish and UK governments to explore the mechanisms required to make this vision happen.”

James Stockan, leader of Orkney Islands Council, said: “Flotta is an ideal location for green hydrogen production – it is surrounded by the best wind resource in Europe, it lies close to major shipping routes within the vast natural harbour of Scapa Flow. The time is right to maximise the incredible natural assets and geography of the Flow and Orkney to ensure a long-term sustainable, climate-friendly future for our communities.

“We are very much open for business and ready to work with potential investors and operators to develop the significant strategic and international opportunities we know that our islands offer. The potential here is immense and we, as a Council, will do everything we can to support and enable this bright new opportunity.”

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