Aug-2022

Teesside: the heartland of the UK’s energy transition

Teesside is perfectly placed to become a world-class, low-carbon energy hub and is an excellent test bed for bp’s hydrogen ambitions.

Matt Williamson
bp

Article Summary

Bp is in the midst of a sweeping transformation to help the world reach net zero. We are committed to our aim of reimagining energy for people and our planet. And in doing so, we aim to reduce carbon emissions from our operations and production, and build new low-carbon businesses.

We are committing significant resources to that transition — from an oil and gas company to an integrated energy company. We want to rapidly become a market leader in low-carbon energy by developing 20 GW of renewable power by 2025 and 50 GW by the end of the decade.

Clean energy sources like wind, solar, and biofuels will play an important role. But hydrogen will also play a crucial role in bp’s transition. The industrial and commercial use of low-carbon hydrogen energy is still nascent, but its potential to help drive decarbonisation is massive. We think it will be a vital part of the energy transition, and we are not alone — according to the IEA, hydrogen could provide 10% of total global energy consumption by 2050.

The bp Energy Outlook suggests that the share of low-carbon hydrogen could reach between 6% and 8% of total global energy consumption by 2050 in its “Accelerated” and “Net Zero” scenarios (bp, 2022), with total hydrogen demand — including that used to produce synthetic fuels and generate power — nearly double this.

It is clear that hydrogen will play a vital role in helping to reduce carbon from the global economy. Yet it will be most important for carbon-intensive sectors where electrification will be difficult and, therefore, an unrealistic option. In heavy industry, for example, hydrogen can be used as a power source to decarbonise high-temperature processes used in steel and cement production, refining, and petrochemicals. And in the transport sector, where ships and HGVs carry heavy loads for great distances, hydrogen and its derivatives have great potential as low-carbon fuels.

The world is also coming together on hydrogen. The technology is advancing, our understanding is developing every day, and government support is building. This is why bp is aiming to capture 10% of the hydrogen market by 2030 in our core markets. One of those core markets is bp’s home, the UK, where we are committed to championing the development of a hydrogen ecosystem. We believe Teesside, in the North East of England, is perfectly positioned for the development of decarbonisation infrastructure.

There are a number of reasons for this. First, the Teesside industrial cluster (see Figure 1) is in a tightly packed area with a radius of seven square kilometres, making it cost effective and efficient to decarbonise. The region is already a UK energy hub, with access to gas from the UK North Sea, helping ensure national energy security. Importantly, Teesside also has a rich industrial history and is home to five of the country’s 25 top emitters. It is the perfect test bed for industrial decarbonisation at scale.

Blue hydrogen
A key element of our vision is H2Teesside — a world-scale blue hydrogen project aiming to produce 1 GW of hydrogen, ramping up in two 500 MW phases in 2027 and 2030. It will produce hydrogen from natural gas, with up to 2 million tonnes of CO2 emissions, which will be stored safely underground.
Blue hydrogen will play a vital role in helping to decarbonise sectors where direct electrification is likely to be technologically very challenging or prohibitively expensive, such as steel production and long-distance shipping. It will also be vital in the scale-up and transition to hydrogen more broadly.

Through H2Teesside, we have the opportunity to supply a diverse range of customers, including those already established in the region and new businesses attracted to this low-carbon hydrogen produced at scale.

The CO2 captured at H2Teesside will be transported and stored by the Northern Endurance Partnership, a joint venture whose partners include bp (who is also the operator), Equinor, Shell, TotalEnergies, and National Grid Ventures. 

Gas-fired power station with carbon capture
Also using this infrastructure will be another bp-led project, Net Zero Teesside Power, which is aiming to be the world’s first commercial-scale gas-fired power station with carbon capture. This will be a large-scale 860 MW gas-fired power station. That is enough low-carbon electricity to provide power to 1.3 million homes, or 5% of all UK homes. It is also power that can be dialled up or down and switched on or off as needed. And it is power with a very big difference — it will be low carbon.

The plant is a joint venture between bp and Equinor, with bp as operator. A project of this nature has been discussed in the energy industry for decades, so it is incredibly exciting to see it finally in sight. A Development Consent Order has been submitted, and Front-End Engineering Design is underway.
Together, H2Teesside and Net Zero Teesside Power will capture up to four million tonnes of CO2 per year, roughly comparable to the emissions from heating two million homes. This CO2 will be captured and piped 145 miles to be stored safely in the rocks beneath the North Sea via the Northern Endurance Partnership.

Hydrogen through electrolysis of water
We are also developing HyGreen Teesside, a green hydrogen project that uses a different technology — producing hydrogen through the electrolysis of water. In this process, electrolysis splits and separates the hydrogen from the oxygen molecules. And if the electricity used is from renewable sources, the hydrogen produced is known as green hydrogen — a zero-carbon fuel.

HyGreen Teesside aims to be one of the UK’s largest green hydrogen production plants, ramping up over the next decade from 60 to 500 MW. This is a really important and strategic project for bp because we need to make advances in green hydrogen. We need to make it efficient and commercially viable.