The joint venture will provide Essar Oil UK with low carbon hydrogen to decarbonise its own energy demand in addition to creating a hydrogen economy across north-west England and north-east Wales.
Essar, operator one of the UK’s downstream energy businesses, and Progressive Energy, developer of the HyNet North West industrial decarbonisation cluster, are joining forces to create a low carbon hydrogen production hub at Essar’s Stanlow Refinery in Ellesmere Port, Cheshire.
The joint venture will manufacture hydrogen for use across the HyNet region. It will provide Essar Oil UK with low carbon hydrogen to decarbonise its own energy demand in addition to creating a hydrogen economy across north-west England and north-east Wales.
Natural gas, and fuel gases from the refinery, will be converted into low carbon hydrogen, with carbon dioxide safely captured and stored offshore in sub-surface reservoirs in Liverpool Bay.
The hydrogen production hub will deliver clean energy to industry in the HyNet low carbon cluster, as well as to fuel buses, trains and heavy goods vehicles, to heat homes, and to generate electricity when the sun is not shining or the wind blowing.
“This agreement marks a major step towards achieving our ambitions for a carbon-neutral borough in Cheshire West and Chester,” said councillor Louise Gittins, leader of Cheshire West and Chester Council. “It will introduce innovative and world-leading technology, a focus for investment in low carbon manufacturing, and create long-term green jobs for the residents of Ellesmere Port and beyond.”
The UK’s first low carbon hydrogen hub will initially produce 3 terawatt-hours (TWh) of low carbon hydrogen each year from 2025. This will be followed by a facility twice this size giving a total capacity of over 9TWh of hydrogen per annum, equivalent to the energy used for heating across the whole of the city of Liverpool.
“This agreement marks a major step towards achieving our ambitions for a carbon-neutral borough in Cheshire West and Chester”
A total investment of approximately £750m will be committed to deliver the two hydrogen production hubs. Follow on capacity growth is planned to reach 80 per cent of the Government’s new target of 5GW of low carbon hydrogen for power, transport, industry and homes by 2030.
The project will use Johnson Matthey’s low carbon hydrogen (LCH) technology. In partnership with SNC-Lavalin, engineering is well advanced with funding provided by the UK Government’s hydrogen supply competition.
“We cannot reach net zero without decarbonising industry,” said Chris Manson-Whitton, director at Progressive Energy. “Today brings a key milestone in that journey as Progressive Energy and Essar Oil UK sign a memorandum of understanding setting out how we will work together to deliver this exciting project at Stanlow Refinery.
“Delivering net zero requires a transformation of our energy system. HyNet offers a once-in-a-generation opportunity to create real change in energy production and consumption, creating a cleaner world for future generations. It will unlock the low carbon hydrogen economy in the North West, reducing emissions and creating and safeguarding jobs.”
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