A series of major projects along Scotland’s east coast highlights the benefits of joined-up thinking around hydrogen and CCS infrastructure. Wireline explores how the Hydrogen Coast could play a decisive role in meeting net-zero targets.
As the energy industry steps up strategic efforts to achieve the UK’s net-zero carbon emission objectives, a host of pioneering new projects are beginning to take shape. In some areas of Scotland, various key initiatives are already in motion. Extending along the east coast from Orkney through Aberdeenshire and on to Fife, these schemes are all focused on providing the infrastructure, technology and demand for hydrogen.
Last year saw the unification of much of these efforts under the banner of the “Hydrogen Coast.” Associated projects range from the harnessing of renewable energy sources such as wind to produce hydrogen (also called ‘green’ hydrogen), to the planned creation of major new facilities to decarbonise natural gas from North Sea fields supported by carbon capture and storage technology, (distinguished as ‘blue hydrogen’).
Collectively, this cluster of projects are positioned to capitalise on the east coast’s natural assets and its existing industry infrastructure to forge a hydrogen economy and help Scotland achieve a 75% carbon reduction by 2030 and meet its aim of becoming net-zero by 2045. In doing so, the projects could open up new long-term opportunities for oil and gas operators and supply chain businesses alike.
The hope is that by drawing on the specialist resources, existing skills and technical knowledge of the energy sector, the Hydrogen Coast could position Scotland as a national – and global – leader in the energy transition.
“We believe hydrogen will become a huge part of the energy industry in the coming years – not just a peripheral, tacked-on element, but a significant sector in its own right.”
Hydrogen of course already plays a role in the energy mix – as exemplified by its use within some refining applications and transport systems – but the ambition of those involved in these projects is to take hydrogen’s status to another level. “We’re increasingly seeing the opportunities for hydrogen to play a key role in the decarbonisation agenda and we believe it’s essential in getting us to net-zero,” says Sam Gomersall, commercial director with Pale Blue Dot Energy, project developer of Acorn CCS and Acorn Hydrogen.
Pale Blue Dot has a specialist focus on the low-carbon energy transition and is a pivotal player in some of the central elements of the Hydrogen Coast. “It’s not there yet, but we believe hydrogen will become a huge part of the energy industry in the coming years – not just a peripheral, tacked-on element, but a significant sector in its own right,” adds Sam. “People in the oil and gas industry are perhaps not yet fully aware that it’s coming down the road, but it could happen both quickly and at scale, presenting multiple opportunities within a Just Transition.”
UK energy consumption is effectively divided into three sectors, with around half of our energy used for heat, a quarter for transport and a quarter for electricity generation.
“There’s good progress already in terms of starting to use renewables to decarbonise power and we’re also beginning to move ahead in transport, with the emergence of both hydrogen and electric vehicles, but the big challenge revolves around heat,” says Sam.
“Most of that comes from natural gas and, at the point it’s used, it emits CO2. One of the options that we and others are looking at is to displace some – and eventually all – of that gas with hydrogen. This means we would be using clean fuel at the point of use.”
Those principles are driving some of the key projects within the Hydrogen Coast portfolio, including the Acorn Hydrogen project at the St Fergus gas terminal and the Aberdeen Vision programme. The former facility receives North Sea gas and is responsible for processing around 35% of the UK’s gas supply.
Led by Pale Blue Dot working in conjunction with partners, Acorn comprises two central programmes. The first component involves establishing carbon capture and storage (CCS) infrastructure at St Fergus to capture the CO2 by-product of both the natural gas and hydrogen production process, and transport it offshore for permanent geological storage using existing oil and gas infrastructure. The second involves the creation of new facilities at St Fergus, whereby natural gas would undergo a reformation process to produce hydrogen for export into the national transmission system.
Plans to produce this hydrogen feedstock are closely interlinked with the Aberdeen Vision project, which is focused on using hydrogen to help decarbonise the local and national gas transmission systems. This programme envisages progress over three phases. The first would see a 2% concentration of hydrogen blended with natural gas exported from St Fergus into the national transmission network for use across Scotland and northern England. The scale of the terminal’s exports means this phase alone would eliminate around 400,000 tonnes of CO2 annually from the energy system.
The second phase would involve scaling up hydrogen production at the complex and adding a 20% blend to the gas supply for the Aberdeen city and shire region. This would entail installing a new pipeline from St Fergus to Aberdeen to transport pure hydrogen for injection at strategic points – and to offer a local 100% hydrogen hub for transport and other applications.
The final anticipated phase would see natural gas replaced entirely with hydrogen for the region’s heating and other purposes, a process that would entail the staged transition of the local distribution network.
“Acorn production is all about scale – the most important aspect is to get started with the formation of new facilities that can put a 2% blend into the national system. We’d then need more production capability to get to 20%, so it’s about phased and incremental development,” Sam adds.
“We see hydrogen as an essential part of the oil and gas industry’s future as it will enable operators to continue producing natural gas that will ultimately be exported from St Fergus as hydrogen – so the end user will be using a clean fuel.”
Connection and collaboration
Inherently linked with the planned production capabilities are the proposals to develop CCS, which would involve building new technical facilities at St Fergus and using existing infrastructure to pipe the CO2 offshore. There are three offshore gas transmission pipelines no longer required for petroleum use which could be used for transport, with the CO2 stored deep underground using new wells. The strategy also envisages CO2 emissions from the UK and Europe being imported for storage via, for example, the nearby deep-water facilities at Peterhead or by existing onshore pipeline infrastructure.
It’s proposed that CO2 emissions from the current St Fergus processing facilities will be used to bring the new CCS system into use, realising an early environmental gain ahead of the hydrogen production facilities becoming operational. This CCS technology must be in place before hydrogen production begins at St Fergus and Sam says the CCS Front End Engineering Design (FEED) is already underway. The Acorn hydrogen production facility preparation is at the Concept Select or Pre-FEED stage.
With a final investment decision anticipated towards the end of 2021, and all necessary consents and permitting requirements being progressed, there are hopes the CCS project will go live in 2024, with the first 200-MW reformation unit for hydrogen production due on stream in 2025.
The close links between offshore operations and the hydrogen economy are further exemplified by other elements of the Hydrogen Coast collective, such as the Surf ‘n’ Turf community project in Orkney. This scheme would see surplus electricity from tidal power devices at the European Marine Energy Centre and from the onshore Eday Renewable Energy turbine, used to generate hydrogen.
The Hydrogen Coast coalition has strengthened in recent times through increased engagement among the various diverse parties – within and without the energy sector. “The connections manifest themselves in lots of different ways across the organisations,” says Sam. “It has seemed increasingly appropriate to have informal collaboration, but it’s certainly not designed to be exclusive – anyone with a stake in the topic can become involved.”
Its ability to reach other sectors is boosted by organisations such as the Scottish Hydrogen and Fuel Cell Association, which features participation by several project representatives, while the CCS agenda is given further impetus via the North East Carbon Capture, Usage and Storage (NECCUS) Alliance.
The Alliance brings together industry, academia and government to provide collective support for the Scottish energy transition. Pale Blue Dot is among the founding members, and Sam adds: “It’s a great example of how a coalition of the willing can be formed to achieve net-zero goals.”
More broadly, Sam says there has been sustained support and encouragement from the Scottish and UK governments, Scottish Enterprise and Opportunity North East (ONE), among other bodies. That support in part recognises the potential economic gains: initial estimates from the Centre for Energy Policy at the University of Strathclyde suggest that by 2030 anywhere between 7,000 and 45,000 UK jobs would be associated with Scotland securing 40% of the carbon storage element of a European CO2 management market.
“There aren’t big opportunities today but the key for supply companies is perhaps to start skilling up and addressing any technology gaps, so they’ll be in a position to capitalise on hydrogen developments as they arise.”
The opportunities for players in the oil and gas sector to capitalise on the transition are also diverse, says Sam. “For operators, it depends on their future strategy, but the Acorn plans will offer a net-zero route to market for natural gas,” he adds.
As operator of the St Fergus Terminal, Shell will also play a key role in Acorn, as well as project partner Total. Commenting on the project, a Shell spokesperson added: “Shell has been working with partners to shape the basic concept and are providing our input and expertise through a Technical Development Service Agreement. The next steps depend on progress in developing the policy and regulatory frameworks required to support CCS at scale in the UK and the outcome of the current work scope.”
On the supply chain side, larger contractors are already exploring the opportunities both in terms of supporting hydrogen production and helping deliver CCS solutions. While this new sector won’t arrive overnight, the groundwork could be laid now for the facilities and skills that will come to the fore over the next decade. “There aren’t big opportunities today but the key for supply companies is perhaps to start skilling up and addressing any technology gaps, so they’ll be in a position to capitalise on hydrogen developments as they arise,” he continues.
Onshore, those possibilities encompass developments such as the chemical processing facilities for hydrogen production, which would offer opportunities for EPC companies and specialist vendors.
Offshore, CCS would still require many of the major work scopes associated with conventional oil and gas work, including pipelines and subsea infrastructure, drilling and downhole equipment.
“We believe most of the potential gaps lie in skills and assets at the moment; the technology is more about refinement than breakthrough advances,” says Sam. “Supply chain companies might benefit from looking at the services they currently provide and assessing what they might offer in the hydrogen space, then look at what skills, expertise and training they might want to invest in.”
He says the skills gap may exist in areas such as health and safety, where very specific specialist support is required, and in technical areas such as materials.
Overall, he adds, the Hydrogen Coast is putting Scotland on the global map. With Aberdeen already taking a lead in hydrogen-powered transport and Orkney demonstrating the potential for island communities when it comes to the production of hydrogen from surplus renewables, these projects are already raising the profile of hydrogen as a power source.
That international status will support the energy industry’s ability to take its emerging hydrogen capabilities into other regions – just as it has done with its North Sea oil and gas expertise.
“Acorn Hydrogen and the Hydrogen Coast initiative is critical to get everything moving in the UK, but hydrogen is being looked at in many other countries,” says Pale Blue Dot’s communication and stakeholder engagement lead, Kirsty Lynch. “These projects put us at the forefront of development in this area – Aberdeen in many respects has led the way in the development of oil and gas expertise, and this is part of the next phase of energy supply from the region.
“As the supply chain grows its hydrogen expertise, it should open up other opportunities to support hydrogen and CCS projects elsewhere in the world.”
You can see the Hydrogen Coast summary document here.