- London and the South East could be heated by hydrogen
- Greenhouse gas emissions dramatically reduced
- Potential jobs boost from £500 million project
Low carbon hydrogen could heat up to 20 million homes and businesses across London and the South East of England for decades to come, according to a new industry report.
The Bacton Energy Hub (BEH), a Carbon Capture and Storage (CCS) hydrogen project, located on the coast of Norfolk, could not only help to secure the UK’s energy supply but also play a major role in significantly reducing greenhouse gas emissions.
Currently the National Transmission System (NTS), supplying gas to homes and businesses in London and the South East of England, consists largely of methane. However, it is possible that by 2030 hydrogen produced at Bacton could be blended into the NTS, helping the transition to net zero while ensuring energy security.
Blending 20% hydrogen into the NTS creates the potential to abate 1.6 million tonnes per annum (MTpa) of CO2 by 2030, rising to 17MTpa by 2050.
CCS-enabled hydrogen – produced from natural gas with carbon dioxide captured and stored – would form the early supply until the early 2040s, after which electrolytic hydrogen – produced through a process of splitting water into hydrogen and oxygen, called electrolysis – would take over.
CCS-enabled hydrogen production creates CO2 as a by-product and Bacton offers plentiful potential carbon storage fields – supported by the North Sea Transition Authority's (NSTA) Carbon Storage Licensing Round – which can meet those needs.
There are undeveloped gas reserves of up to 2 trillion cubic feet at Bacton, which could be used as feedstock for the production of CCS-enabled hydrogen. The NSTA’s 33rd Licensing Round, launched in October 2022, included four priority clusters in the Southern North Sea – areas with known hydrocarbons with the potential to be developed quickly – so the necessary gas resource is readily available.
The Climate Change Committee suggested that carbon storage can play an important role in scaling up the hydrogen industry. The use of hydrogen in boilers can save up to 85% of emissions compared to natural gas use in boilers.
The scale of the project is such that it will create hundreds of green jobs in East Anglia, providing a significant boost to the local economy.
The business opportunity report also highlights the potential that interconnectors to Europe could unlock, which could see Bacton develop into a CO2 import hub, storing gas transported from western Europe and importing feedstock for hydrogen production.
Wind power is also a significant part of the project; by 2030 the East of England is expected to supply 15GW of offshore wind capacity towards the UK’s target of 50GW. This growth in offshore wind will help support the build out opportunity through the generation of electrolytic hydrogen.
The report was produced following work, supported by the NSTA, looking into essential issues around hydrogen supply and demand, infrastructure requirements, opportunities for the supply chain and regulatory issues by Progressive Energy Limited, Summit Energy Evolution Limited (a Sumitomo Corporation Company), Xodus, Petrofac, Turner & Townsend, and Energy Transition Advisory.
The report calculates that the core project would cost £500m and can be delivered by 2030 if a consortium forms by H1 in 2023 and a final investment decision is reached by Q3 2025.
The NSTA, which launched the project in 2020, published the report today (14 December) at a special event in Norwich.
Alistair Macfarlane, NSTA Southern North Sea Area Manager, said:
“We are resolutely focused on the twin goals of ensuring security of supply and reaching net zero. This project can play a transformative role in both.
“The reports produced by our partners clearly demonstrate that the Bacton Energy Hub is a viable, commercial project with significant expansion opportunities that can secure long-term gains in terms of energy security, the energy transition and employment.
“We now want to see a consortium coming together to turn this exciting opportunity into reality.”
Paul Lafferty, CEO, Summit Energy Evolution Ltd, said:
“Summit Energy Evolution, in collaboration with our parent company Sumitomo Corporation, have been pleased to lead the Hydrogen Supply SIG and we see Bacton as a key infrastructure play in the energy transition journey for the UK.
“The study has identified a viable proposition which when linked with the CCS opportunities in the SNS could provide a significant contribution to the UK Government's aims for both the hydrogen economy, the East Anglia region, and CCS targets for 2030 and beyond. Sumitomo believe this is an outstanding initiative and we look forward to remaining involved as the opportunity develops.”
Ian Phillips, Director of Energy Transition Advisory, said:
“The Bacton Energy Hub is potentially a major contributor to the greening of the UK economy – maximising the use of the gas resource that has been so important to our energy system for the last 50 years, whilst delivering a major contribution to decarbonising the UK economy whilst creating a significant number of green jobs.”
Daniel Paterson, Head of Infrastructure, Advisory, at Xodus, said:
“We are proud to have taken a leading role in establishing what infrastructure is required to ensure Bacton continues to be a key player in the supply of energy to the UK. We were able to integrate our expertise across the energy sector, from oil and gas, offshore wind, CCS, and hydrogen, working with key stakeholders and the Infrastructure SIG Core Group, to create a credible pathway for Bacton to deliver low carbon hydrogen in the future.”
Andrew Etherington, Director at Turner & Townsend, said:
“Bacton Energy Hub is a game charger for East Anglia in terms of the potential investment and highly skilled jobs it will bring to the local economy, while also greatly enhancing the UK’s efforts to lead the field in the energy transition. By sharing our expertise in supply chain and technology with the NSTA, and working in close collaboration with industry leading energy companies, we are excited to be making this complex project a reality.”
Chris Manson-Whitton, CEO of Progressive Energy, said:
“Our foundational work has shown that the Bacton Energy Hub is an important national site for the production of hydrogen and storage of carbon dioxide.
“We look forward to supporting the realisation of Bacton’s potential in the low carbon hydrogen-led economy over the coming years, helping the UK and Europe achieve net zero.”
Jon Carpenter, Vice President of Petrofac's New Energy Services unit, said:
"The location of the Bacton Energy Hub offers real potential for hydrogen transition. Initially enabling low-carbon hydrogen production using natural gas and the potential reuse of existing infrastructure for CO2 storage, and, in the future, as a significant centre for green hydrogen production drawing on its substantial renewable energy resources. We look forward to seeing how this exciting opportunity develops.”
Notes to editors:
This Business Opportunity Report was developed by industry as part of the extensive work undertaken as part of the Bacton Energy Hub Special Interest Groups; the NSTA supports the work to progress the Bacton Energy Hub.
Hydrogen in a low-carbon economy (Committee on Climate Change 2018)
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