Up to £16bn of public and private cash is set to be invested in cleaner energy technology, including up to £3bn to replace fossil fuel power supplies on oil and gas platforms with renewable energy, another £3bn for technology to capture and store carbon from fossil fuel energy and industrial processes and industrial processes, and up to £10bn for hydrogen production.
The Oil and Gas Authority (OGA) - which is funded by an industry levy - commissioned Progressive Energy to undertake a study in December 2020 to analyse the hydrogen demand potential in Bacton and the South East of England.
It concluded that the area - where there are a large number of gas sites with many redundant platforms - has the potential to become a “significant” hydrogen production site for London and the south east. There are different categories of hydrogen including blue (from fossil fuels), green (renewables) or pink (nuclear).
“A sustainable market for this hydrogen is expected to develop and it is anticipated that blue hydrogen will be the most commercially viable option in the 2030s and early 2040s. This will provide the time for the maturation of green hydrogen technology and for green hydrogen to become more cost competitive on an industrial scale by the late 2040s and early 2050s,” the OGA report concluded.
The Southern North Sea has enough hydrocarbon reserves to meet blue hydrogen demand while the UK transitions to net zero through a decarbonisation of the UK energy mix, it said. This could use existing hydrocarbon infrastructure and “extensive CO2 storage potential” the Southern North Sea has to offer, but it warned that failure to act now could see infrastructure prematurely decommissioned and hydrocarbon opportunities lost “which would have a credible impact on realising this value for the region”.
Alistair Macfarlane, OGA area manager for the Southern North Sea and East Irish Sea, said it was very early days in the evaluation process, with the next stage involving OGA hosting a session with interested industry companies to see if the sector can form a working group to do more detailed work to move towards making the idea a reality.
“The Energy Transition Deal and the money earmarked for hydrogen production could undoubtedly help give this impetus,” he said. “There will however be competition for this funding as there has been for the CO2 storage funding so any proposals will have to be robust and deliverable.
"I'd hope Bacton area and Southern North Sea would be in a position to make a strong case when more detail of how this funding will be dispersed becomes available.”
East of England Energy Group (EEEGR) chief executive Simon Gray said: “Should we choose as a nation to maintain a form of gas supply (be it natural gas, hydrogen or a blend) then a hub that can produce hydrogen from a variety of sources (blue, green or pink) and blend this onto the grid will be essential and Bacton would be the logical place to do this.”
This was due to a number of factors including its proximity to areas of demand in London, the south east and the Midlands, its gas pockets potentially suitable for conversion to blue hydrogen, its green hydrogen potential from offshore wins and the potential of pink hydrogen from the proposed Sizewell C nuclear plant, with studies looking at the suitability of existing infrastructure to get hydrogen back to Bacton.
The OGA will be hosting a workshop on June 16 to share further insights into the report’s findings. Email Bactonenergyhub@ogauthority.co.uk