The U.K. presented its hydrogen strategy in the summer of 2021. This strategy calls for a "thriving hydrogen economy by 2030" in the U.K. The country is really betting big on hydrogen as the next staple energy carrier for its whole economy. The H21 series of projects have shown the technical and economic feasibility of converting the entire U.K. economy from natural gas to hydrogen. However, it should be noted that the economic feasibility of this endeavor hinges on the use of blue hydrogen, at least for the short and medium term. Green hydrogen could be a long-term solution if it can be imported from areas with very cheap (i.e., <20 $/MWh) renewable electricity. Therefore, for the next 20 years, the U.K.'s hydrogen plans depend on the availability of blue hydrogen and thus on the availability of carbon capture and storage capacity. To this end, the Northern Endurance Partnership develops three interdependent projects to provide hydrogen production capacity and CCS infrastructure.
USE CASE AND BUSINESS IMPACT
Three interdependent projects obtained a government grant of approximately $95 million from UKRI's Industrial Strategy Challenge Fund (ISCF) in 2021 as a public funding contribution to a total investment of $318 million in front-end engineering and design (FEED) for extensive infrastructure for CCS. The three projects are Net Zero Teesside, Zero Carbon Humber, and the Northern Endurance Partnership.
Net Zero Teesside
Net Zero Teesside aims to construct a pipeline for CO2 in the Teesside industrial area with a capacity to transport 10 million tons of CO2 per year. This area is historically one of the largest clusters of the chemical industry in the U.K. The industrial area is located around the River Tees, just north of York. The pipeline will enable the industry in the area to decarbonize by disposing of captured CO2 in that infrastructure and eventually in CO2 sequestration wells in the North Sea. In the future, companies that wish to use CO2 as a feedstock could use the pipeline to obtain CO2. To ensure that the pipeline has at least one initial user, the project also wants to build a 2.1 GW gas-fired power plant with carbon capture. This will be a flexible power plant, aimed at grid balancing. If that power plant runs for about 5,000 hours per year, a capacity factor of 62%, then it will produce 1.5 million tons of captured CO2 per year. The planned capacity of the pipeline is 10 million tons per year. This power plant will be the first user of the network and will use between 10% and 15% of its capacity. This unit is in line with the U.K. government's strategy to decarbonize the power sector, as outlined in the whitepaper "Powering our Net Zero Future."
Zero Carbon Humber
Zero Carbon Humber is similar to Net Zero Teesside. It aims to build a CO2 pipeline in the Humber region with an eventual capacity of 50 million tons of CO2 per year. The Humber region is a cluster of chemical industries located around the River Humber, just south of York. The Humber and Tees are about 80 miles (130 km) apart. Both are located in a river estuary with direct access to the North Sea, and both are close to the former heartland of U.K. coal mining. This project is essentially the same as Net Zero Teesside, except the first user of the network will not be a newly built power plant here. A new hydrogen plant will produce blue hydrogen using steam methane reforming combined with carbon capture. The Humber project also aims to enable storing CO2 from Drax's biomass-fired power plant in the area. This so-called bioenergy CCS (BECCS) is a carbon-negative technology. It sequesters nonfossil CO2 originating from the combustion of biomass.
Northern Endurance Partnership
The Northern Endurance Partnership is the industrial consortium that supports the aforementioned projects and aims to build a CO2 pipeline network offshore on the North Sea. This final project will create the network that will be used to sequester the CO2. The carbon will be stored in the depleted offshore gas fields on the U.K. continental shelf. Without this project, the other two projects will eventually be futile because they collect CO2 but provide no means to dispose of it. The Northern Endurance partnership was established in 2020 by BP, Eni, Equinor, National Grid, Shell, and Total. The operator of the infrastructure will be BP.
These U.K. CCS projects are an order of magnitude bigger than similar projects in the Netherlands. The reason is that they are designed to support the U.K.'s ambitious plans to switch the country's entire natural gas grid to blue hydrogen. This is a daring enterprise that will take 25 years to execute. If the switch to blue hydrogen does not happen for some reason, then these CCS projects are immensely overdimensioned and thus much too expensive for their users. The success of these projects therefore depends on a well-coordinated and steadfast government policy in the U.K. Clients are advised to monitor these projects within the context of the broader U.K. hydrogen and decarbonization strategy.