Green Recovery Investment Prospectus - June 2020 - SGN
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00 SGN Green Recovery Investment Prospectus
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Green Recovery
Investment Prospectus
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| Contents | 01
Contents
This document sets 02 Executive summary
out proposals that are
intended to help inform
the decisions we must 12
H100 Fife
make as a country to
Leading the world’s first 100% green hydrogen
deliver a green economic to home network
recovery. We will engage
with our stakeholders to 16
Acorn carbon capture and storage
discuss these proposals,
explaining how we think A major clean growth catalyst
the projects can support
the UK economy and 18
ERM Dolphyn
deliver on our net-zero Green hydrogen at scale from offshore wind
ambition. We welcome
comments and feedback.
20
Aberdeen Vision
For further information Unlocking the hydrogen economy
please contact:
sgn.press.office@sgn.co.uk
22
H100 Machrihanish
A coordinated whole system approach to the
decarbonisation of heat
23
Energy system transition
Removing
all barriers to the large-scale rollout
of hydrogen networks
24
An ambitious energy efficiency
programme
02 SGN Green Recovery Investment Prospectus | Executive summary | 03
Executive summary
ORE Catapult’s
SGN’s medium to long term net-zero strategy 7MW Levenmouth
is to replace natural gas with hydrogen and Demonstration
other green gases, enabling the decarbonisation Turbine will
provide renewable
of heat by 2045. power for the
world-first H100
Fife project
There is no realistic scenario disruptive for customers. can be expedited now.
whereby the UK can achieve And as the UK seeks to Additional investment in
net-zero carbon emissions reinvigorate its domestic the other projects identified
by 2050 without hydrogen economy and set out the path in this paper would result
playing a key role in the to deliver net-zero, we must in the creation and support
decarbonisation of large seize the potential to become of around 1,500 engineering,
emitting sectors such as a global leader in renewable construction and business
domestic heat, industry and and low-carbon hydrogen support function jobs in
heavy transport. The need for technology. We must move 2020/21.
a clean and storable alternative quickly to realise this
to electricity is the basis of opportunity and achieve the Further investment in all
calls for urgent investment maximum economic benefit. future phases of every project
in the development, detailed in this paper has the
demonstration and scale We recommend unlocking potential to create and support
up of hydrogen solutions. regulatory investment in in excess of 100,000 direct and
research, development and indirect jobs across the UK
Peak demand for heat is more demonstration and expediting economy up to and beyond
than four times that on the industrial decarbonisation 2050 and secure the long-term
electricity network and 83% through key project investment. future of the UK oil and gas
of the UK’s 29 million homes and manufacturing industries.
are heated by boilers that burn Our key, shovel-ready
natural gas. 20,000 homes demonstration project, We are not proposing
a week or 1 million homes a H100 Fife, is essential for to deliver this alone.
year will need to switch to the creation of the hydrogen
low-carbon heat between 2025 economy. It will create a The decarbonisation of
and 2050. complete hydrogen to homes our economy and heating
network that will test every infrastructure requires
Although other technologies aspect of green hydrogen significant coordination across
will have a role to play, production, storage, network the supply chain. Unlocking
hydrogen can deliver delivery, home application and the regulatory investment by
decarbonisation of heat at social acceptability. incorporating this programme
the scale required to meet in our next price control period,
the Government’s net-zero Beyond delivery of regulatory GD2, will complement the
targets in a way that is most investment, we have prepared industrial strategy and aid the
cost-effective and least a list of investable projects that UK’s green recovery.
Credit: ORE Catapult
04 SGN Green Recovery Investment Prospectus | Executive summary | 05
Executive summary
Continued
Project title Phase Location Investment Carbon benefit Jobs estimate Earliest Project title Phase Location Investment Carbon benefit Jobs estimate Earliest
commencement commencement
date date
H100 Fife Phase 1 £27.2m 662 t CO2 100 Now Machrihanish 300 customer £15m 662 t CO2 in 100 2022
demonstration phase 2
Phase 2 £15m (estimate) 1,550 t CO2 60 2022
1,000 customer £15m 1,550 t CO2 60
Phase 3 £75m (estimate) 18,000 t CO2 300 2022 demonstration
Levenmouth West Scotland
Phase 4 £25m (estimate) 4,000 t CO2 100 2024
Phase 5 £1bn (estimate) 1.5 Mt CO2e 6,000 2026
Energy system Over 60 named SGN, other gas Around £300m Enables the 1,200 2021
transition projects networks and decarbonisation
the wider gas of UK heat and
Acorn CCS Development St Fergus/ £400m 3 Mt CO2 per 1,600 2021 industry industry
(Linked to of remaining Offshore North (estimate) annum
Aberdeen Vision 7 sites Sea/Southern
and Acorn North Sea/ £10bn 44 (47 total) Mt 42,400 2022
Hydrogen)
North Welsh (estimate) CO2 per annum (sum is 44,000)
Waters Energy c.£6.6bn 0.4 Mt CO2 1,891 Q3/Q4 2020
efficiency – £30bn 15-year rollout
Scotland,
South London (Upgrading 1.1m 2,837
and South homes at £6k 10-year rollout
Acorn 1 reformation £214m 0.4 Mt CO2 800 Now per job – £26k
Hydrogen module and East England
per home) 4,052
(Linked to storage (supply 7-year rollout
Aberdeen Vision 20% H2 blend to
and Acorn CCS) Aberdeen Vision)
St Fergus/
Additional 3 Aberdeen £631m 1.2 Mt CO2 2,500 2024
reformation
modules and
storage (supply
100% H2 to
Aberdeen Vision)
Aberdeen 20% hydrogen £100m 0.4 Mt CO2 400 Now
Vision blend into (estimate)
(Linked to Acorn Aberdeen
CCS and Acorn St Fergus/
Hydrogen) 100% hydrogen Aberdeen £150m 1.2 Mt CO2 600 2024
into Aberdeen (estimate)
ERM Dolphyn 10 MW £56m 4,000 t CO2 50 Now
project demonstration
100 MW £300m 40,000 t CO2 120 2025
demonstration North/West
Scottish Coast
4 GW array £10bn 1.5 Mt CO2 5,000 2028
Additional £90bn 13.5 Mt CO2 45,000 2032
36 GW capacity
06 SGN Green Recovery Investment Prospectus | Executive summary | 07
Executive summary
Continued
Table justifications and assumptions Phase 5
represents the significant
St Fergus gas terminal, which
accounts for 35% of total UK
development of the hydrogen gas supply, emits around 55 Mt
economy in Fife. This includes CO2 per year at point of final
H100 Fife Phase 2 Phase 4 integration with large industrial use). The development of Phase 5 of
The town of Methil, on the Fife which will expand phase 1 to will develop hydrogen transport users (Mossmorran), the build- all eight sites to deliver the
coast, has a rare confluence of 1,000 properties, is estimated infrastructure, which will require out of blue hydrogen production above stated capacity would H100 Fife
factors that make it a unique to cost £15 million and will additional processing to ensure and integration with the require a capital investment will save 1.5 Mt
location for demonstrating involve the conversion of the hydrogen is of sufficient quality electricity networks and large of £4.4 billion and an OPEX of CO2 and
hydrogen as an energy carrier. existing network and expansion and pressure for use in road, offshore wind generation assets, of £6.0 billion, totalling create 6,000
of the production facility. rail and marine transport. the rollout of significant £10.4 billion1. It should be
The above ratio estimates this The development of this additional jobs
With easy access to the hydrogen transport infrastructure noted that the costings in
Offshore Renewable Energy phase will create an additional phase is estimated to cost and the full rollout of hydrogen the referenced paper do not
Catapult’s 7 MW Levenmouth 60 jobs. The conversion of an £25 million. Aberdeen Vision to meet all heat and industrial include the investment required
Demonstration Turbine (the additional 700 customers aims to create a transport hub demands in Fife. This phase will for the capture capability at
world’s largest offshore wind to 100% green hydrogen for road transport, mainly for develop a significant hydrogen individual emitters.
turbine dedicated to research will provide annual emissions the city’s bus fleet – this economy which will integrate
and development) and a vacant savings of 1,550 t CO2. hub is estimated to deliver with the “hydrogen coast” and The Energy Policy unit at
9ha Scottish Enterprise plot The earliest commencement annual emissions savings is estimated to require at least Strathclyde University, led by
earmarked for energy of this phase is 2021. of 1,300 t CO2. This phase £1.5 billion of investment. Professor Karen Turner, has
development activity, the site of H100 Fife will encapsulate We deliver around 5 TWh of reported the potential for CCS
boasts a clean energy source, Phase 3 road, rail and marine transport natural gas to Fife per annum to play an important role in
space for a new hydrogen will expand H100 Fife to over a larger area. Therefore, – conversion of this demand helping to sustain around
production and storage facility, decarbonise non-domestic this phase of H100 Fife is to 100% hydrogen will reduce 44,000 direct and indirect
and a community of potential customers in and around estimated to save around emissions by 860,000 t CO2/ Scottish jobs currently linked
domestic end users within Levenmouth. There are 122 4,000 t CO2 per annum on annum. Further emissions to oil and gas and other
a small geographical area. commercial and industrial completion. The investment reductions from the related industrial sectors.
properties demanding 97 GWh of £25 million is estimated decarbonisation of electricity This investment will therefore
Phase 1 of natural gas per annum. to create 100 jobs. and transport yields the phase be assumed to create and
has been fully priced at This will require a ramp up 5 estimate of emissions savings sustain an estimated 44,000
£27.2 million and will in hydrogen production of at to be at least in the order of jobs in the UK oil and gas
decarbonise the gas demand least ten times (either blue or 1.5 Mt CO2. This investment and sector across the operational
of 300 homes (an average green hydrogen) and new areas rollout of phase 5 is estimated lifetime of the assets (out to
UK domestic property uses of network to be constructed, to create around 6,000 around 2070).
12,000 kWh of natural gas per often to meet specific industrial additional jobs.
year, at 0.184 kg CO2/kwh), loads. The decarbonisation Goldeneye has been
saving 662 t CO2/year. of this gas demand will yield identified as the first site for
annual emissions savings Acorn CCS development in 2021, requiring
Our Gas to the West project of around 18,000 t CO2. Pale Blue Dot Energy’s Acorn an approximate investment of
(new network construction This phase is likely to require CCS facility is expected, subject £400 million (CAPEX and OPEX
in Northern Ireland) created investment of around £75 to funding, to be operational of build), if it is assumed that
around 400 jobs for a million and will create 300 jobs. by 2024. The ‘Progressing every £1 million invested creates
£150 million investment This phase will require the Development of the UK’s four jobs – this investment
(around three jobs per £1 million build-out of production and Strategic CO2 Storage Resource would create 1,600 jobs across
investment), it will be assumed geological storage. Report’ (April 2016) by Pale its lifetime.
that for hydrogen projects, Blue Dot, Costain, the Energy
four jobs per £1 million of Technologies Institute and Axis The table has been presented
investment will be required Well Technology assessed the as a split in the repurposing
to account for the innovative UK’s CCS potential. of the Goldeneye field and
nature of the technologies the remaining seven sites
The eight high potential sites identified in storage resource
involved. Phase 1 of the H100 Fife will assessed and priced in the
H100 Fife will create assessment report.
be the world’s report have a total capacity
approximately 100 jobs using
this ratio. This project is ready first hydrogen of 1,645 Mt CO2, with a maximum Acorn CCS is closely
for immediate commencement heat network, injection rate of 47 Mt CO2/year linked with our Aberdeen
following investment. testing every (for reference the total Vision project.
throughput of natural gas at
aspect of green
hydrogen
production
08 SGN Green Recovery Investment Prospectus | Executive summary | 09
Executive summary
Continued
3,000
Acorn Hydrogen n additional three 200 MW
A Aberdeen Vision Dolphyn
Our Aberdeen Vision project reformer modules would The success of Acorn Hydrogen ERM’s Dolphyn project aims to
(in partnership with Pale Blue provide sufficient supply for and all other blue hydrogen establish industrial scale green
jobs
Dot Energy) aims to develop Aberdeen to convert to 100% production is dependent on hydrogen production through
and roll out a hydrogen hydrogen, this would require the successful development the design, construction and
economy in Aberdeen and the a further investment of of Carbon Capture and Storage demonstration of floating
surrounding area. The feasibility £435 million. Additional (CCS) infrastructure (Acorn offshore wind turbines with could be created
study and required investment hydrogen storage requirements CCS). The success of blue integrated electrolyser green through phase 1 and
in this project will deliver a gas of 650 GWh would require hydrogen production is hydrogen production. This 2 of Acorn Hydrogen.
network infrastructure an additional investment of dependent on the extent of project will commence initially
(transmissions and distribution) £196 million. The total cost a demand, which is realised by with a smaller scale 2 MW
capable of delivering 100% of this phase is therefore the transition of current natural turbine demonstration as
£80
hydrogen to the city of £631 million. This investment gas demand to hydrogen a proof of concept, followed
Aberdeen and the surrounding is estimated to create around demand. This requires the by a larger 10 MW turbine
area. The projected costs do not 2,500 jobs. These jobs are repurposing and transition of demonstration. The initial
million
account for the construction of closely linked with the gas distribution infrastructure stages of this project have
the blue hydrogen production macroeconomic benefits to deliver up to 100% hydrogen. secured funding through
assets at St Fergus and the and jobs created by investment the BEIS hydrogen supply
required hydrogen storage. in Acorn CCS. Aberdeen Vision will repurpose competition. The design,
gas distribution infrastructure permitting and
berdeen Vision will enable
A The Aberdeen Vision Phase in Aberdeen and construct a The 2 MW demonstration
1 Final Report estimated that construction of the
hydrogen demand and therefore hydrogen transmission pipeline followed by the 10 MW 100% hydrogen
stimulate hydrogen production. a 2% by volume injection into from St Fergus to Aberdeen. demonstration will require an pipeline to Aberdeen
This new demand for hydrogen the NTS at St Fergus will The emissions savings from investment of £56 million and is estimated to require
will be supplied from blue reduce emissions by around Aberdeen Vision are directly will deliver around 4,000 t CO2/ an investment of
hydrogen production through 320,000 t CO2/year, with linked to the emissions savings year (total 12 MW capacity). around £80 million.
Pale Blue Dot’s Acorn a 20% by volume blend described in Acorn Hydrogen This phase has now commenced
Hydrogen. Acorn Hydrogen of hydrogen and natural gas and are not in addition to and is suitable for immediate
will reform natural gas at St into the Aberdeen distribution these savings. investment concluding in 2026.
Fergus to produce hydrogen network coupled with
for transport through the increased transport utilisation The design, permitting and The Dolphyn project will then
gas network infrastructure reducing emissions by around construction of the 100% look to develop a 100 MW
to customers. 80,000 t CO2/year. The first hydrogen pipeline to Aberdeen demonstration (array of
phase therefore will reduce is estimated to require an 10x10 MW turbines). This
ne 200 MW reformer module
O emissions by an estimated investment of around will require an investment
at St Fergus will produce 0.4 Mt CO2/year. £80 million. Modifications to of around £300 million and
sufficient hydrogen for a the distribution infrastructure reduce emissions by a further
2% injection to the National The second phase, where in order to enable 20% 40,000 t CO2. This phase
Transmission System (NTS) 100% of demand in Aberdeen hydrogen by volume blending is expected to be ready
and supply up to 20% of is met by hydrogen, is in Aberdeen is estimated to for investment and
Aberdeen’s demand (by estimated to reduce emissions cost around £20 million. This commencement by 2025
volume) through a dedicated by an additional 1.1 Mt CO2/year. overall investment in phase and completed by 2030.
hydrogen transmission pipeline It is assumed that an additional 1 of around £100 million is
from St Fergus to Aberdeen. saving of 0.1 Mt CO2 will be assumed to create and support ERM will then look to progress
The cost of this module was realised from a further uptake approximately 400 jobs in to full scale industrial green
estimated in the Aberdeen of hydrogen fuelled transport. Aberdeen. To enable the phase hydrogen production through
Vision Phase 1 Final Report This second phase will therefore 2 conversion to 100% hydrogen the construction of a 400
to be £145 million. To ensure reduce emissions by a further is estimated to require a further turbine array at 4 GW. This
security of supply, 229 GWh 1.2 Mt CO2/year (Total of investment of £150 million, array is estimated to require
of hydrogen is required in this 1.6 Mt CO2/year). creating and supporting an a £10 billion investment and
Phase, at an estimated cost additional 600 jobs. will deliver emissions reductions
of £69 million. The total cost he construction of the first
T of around 1.5 Mt CO2/year.
of this phase is therefore reformation module and This is expected to commence
£214 million. If it is assumed supporting storage is assumed construction in 2028 and will
that for every £1 million to be ready for investment now, be completed by 2034.
invested, four jobs are created, with the second phase ready
this phase will create around in 2024.
850 jobs. This is linked with
the jobs created in the Acorn
CCS investment.
10 SGN Green Recovery Investment Prospectus
Executive summary
Continued
The final phase of this rollout Machrihanish &
will construct a further nine
4 GW arrays (total 40 GW),
which will represent a
Campbeltown
FEED study was conducted
A 1,500
jobs
to consider the site at The Macrihanish
significant volume of green Machrihanish as a possible
hydrogen capable of supplying location for the H100
project will reduce
a large proportion of GB heat demonstration. Despite not CO2 emissisions
and industrial demand. The being chosen, we seek to by 662 tonnes, could be created
development of nine further in 2020/21 through
arrays will require an investment
develop this site as a route creating and
into West Scotland for investment in
of up to £90 billion (this is likely supporting 100 key projects.
hydrogen. Required investment jobs in rural Argyll
to be lower due to economy of in this site to enable the first
scale and efficiency savings of phase build-out is estimated
industrial scale manufacturing). to be £15 million. This phase
The construction of these
1,000
can be started now and will
further arrays could commence supply 300 homes with green
in 2032 and, upon completion, hydrogen and enable the
reduce emissions by a further
homes
installation and testing of
13.5 Mt CO2/year. alternative downstream
renewable technologies. This
A study conducted by Energy phase will reduce emissions by
and Utility Skills2 estimated that 662 t CO2/year and create and The Machrihanish
growth in the UK offshore wind support 100 jobs in the region. & Campbeltown
sector (to an overall capacity site could supply
of 35 GW) by 2032 will directly Phase 2 of this project will green energy
support 36,000 jobs – this expand the network to to 1,000 homes.
equates to around 1,000 jobs 1,000 customers and require
per GW of capacity. a further £15 million investment,
saving an additional 1,550 t CO2
For green hydrogen production, and creating and supporting
due to the added element and a further 60 jobs in the area.
complexity of electrolysis and This phase will likely be ready
the more remote locations, it in 2022.
will be assumed that 1,250 jobs
will be created and supported The project has significant
per GW of offshore green growth potential similar
hydrogen production at the to H100 Fife, which will be
industrial scale. For the 10 MW quantified following investment
demonstration, due to the in phase 1. This includes the
smaller scale, it is estimated up development of a hydrogen
to 50 jobs will be created and economy in West Scotland.
supported. For the 100 MW
demonstration, it is estimated
that 120 jobs will be created
and supported (based on the Energy system transition
above ratio). Investment in each The investment of around
array is estimated to create and £300 million in the RIIO-GD2
maintain 5,000 jobs. programme will conduct
the necessary work to enable
the decarbonisation of the
energy delivered through
the network. This investment is
estimated to create and support
1,200 jobs, both in SGN and
wider project partners in the
gas industry.
This work can commence
in 2021.
12 SGN Green Recovery Investment Prospectus | H100 Fife | 13
H100 Fife
Levenmouth in Fife, home This is an area of high By securing and constructing H100 Fife phase 1
to the town of Methil, offers deprivation, and is recognised a hydrogen demonstration in
a location that is unique for to be within the 5% of most Levenmouth, a location has
demonstrating hydrogen as deprived areas according to been selected that is ideal for
an energy carrier. It provides the Scottish Index of Multiple evidencing the replacement of
access to an existing 7 MW Deprivation (SIMD). The natural gas with hydrogen and
wind turbine (owned by waterfront at Levenmouth has the wider rollout of hydrogen
ORE Catapult), and a vacant been an area steeped in the in the energy system. In addition
9ha plot owned by Scottish energy industry for decades, to the phases discussed in this Offshore Green electricity Safely Zero-carbon heating
Enterprise that is development with Methil being appointed paper, the location of the H100 wind produces hydrogen stored for homes
land for energy activities. as a new coal exportation dock Fife project lends itself to a
This site, identified for the in the 1870s. With this came a range of opportunities, including:
hydrogen production and wave of jobs and employment
storage facility, as well as opportunities linked to the • A central Scottish location,
the hydrogen demonstration export of coal from Fife, creating close to motorway connections
facility, is located adjacent a mining town and coal port and only 40 minutes from
to the potential domestic with a wagon line built to Edinburgh airport.
end users. bring coal to the dock from
the collieries. At one point, • The presence of Fife College,
Methil was Scotland’s main which demonstrates an
coal export dock. excellence in energy courses
and has a campus located
Moving into the 1970s, oil in Levenmouth. Transported
through network
field exploitation in the North
Sea brought a new form of • A platform of renewables
employment to the area and a and hydrogen education
major facility for the construction delivered by Bright Green
of platforms was established. Hydrogen that can be built
Energy Park Fife, as it is know upon in higher education.
today, still hosts contributors
to the offshore market with • Aligning with Fife Council’s
links to fossil fuels but also targeting of mid-Fife as a
renewables, including Biba. priority area for investment
This site has seen the and economic rejuvenation,
transformation of old energy with 2019 statistics reporting
to new, starting with coal Fife’s unemployment rate to
mining and exporting, through be 4.1%, compared to 3.5% for The location of
to oil platform fabrications and Scotland and 4.0% for the UK the H100 Fife
more recently offshore wind (Defined as: % of working age
turbine jacket structures. (16–64) residents who are out project lends
of work). In April 2020 the itself to a range
The presence of the 7 MW wind claimant rate in Levenmouth of opportunities
turbine on site demonstrates rose by 8.6%, the highest
the inclusion of clean energy increase in Fife.
into the function of the park
and sets the context for the
delivery of the next innovative
advancement in the energy
sector – hydrogen delivered
from offshore wind to
customers through our
H100 Fife project.
14 SGN Green Recovery Investment Prospectus | H100 Fife | 15
H100 Fife
H100 Fife is seeking to (c) W
ithin Energy Park Fife Phase 5 (f) H
ydrogen from offshore The H100 map
deliver a first-of-a-kind 100% is the offshore jacket (estimate £1 billion) wind is a valuable process
hydrogen network, supplying manufacturers, BiFab, who that is being demonstrated
around 300 domestic properties have fabricated infrastructure Whole systems and at Levenmouth, opening a
in phase 1. This will be a new for the offshore oil and gas Hydrogen coast: market solution for hydrogen Hospital Diageo Packaging
purpose-built generation and industry as well as offshore (a) H
ydrogen could integrate production at scale.
storage solution, supplying a wind turbines. with the power network, Diageo
pipeline network, comprising
H2 Haulage
providing storage and (g) Neighbouring offshore wind
Distilling
of fully tested common natural
Anticline H2
(d) Close to Levenmouth supporting transport. activity off the coast of Fife Storage
gas components and fittings, is the Coaltown of Balgonie There is an opportunity to is accelerating with the
laid in parallel to the existing anticline, that has the expand on the ‘East Neuk’ Neart na Gaoithe (NnG) Moss
morr
an
gas network delivering an storage capacity for project undertaken with 450 MW wind farm and Grangemouth
end-to-end hydrogen system. hydrogen to serve Scottish Power Energy Cierco’s 12 MW–53 MW 300 homes 1,000 homes
100% H2 network 100% H2 network
Phase 1 will be delivered 250,000 homes. Networks to roll out whole development next to Energy
through an investment system solutions. Park Fife. Existing and Leven Rail
of £27.2 million. (e) Levenmouth Water future developments in the H2 Transport
Station
Treatment Works is nearby; (b) T
he rollout of property offshore wind market close
The growth potential of the there is future opportunity connections could expand to Energy Park Fife offer
H100 Fife site is significant, to generate hydrogen from to supply an extended the opportunity for power LOHC H2
Electrolyser
and can be summarised in waste water. decarbonised east integration for hydrogen
Trials
Storage
four expansion phases: coast network. production.
(f) Options for utilising the O2
Storage
Demonstration
Facility
Phase 2 oxygen for both fisheries (c) M
ossmorran’s Natural Liquid (h) Forth Ports are the
(estimate £15 million) and medical applications Gas and Ethylene Plant main port owners in Fife,
are also being explored. is located 25km from including those at Methil,
Offshore wind
development
d
win
re nt
sho me
1,000 properties: Levenmouth and produces Burntisland, Kirkcaldy, Off velop
de
(a) E
xpanding the initial industrial hydrogen as a Rosyth and also Industry in
Levenmouth
300 connections to 1,000 Phase 4 by-product of ethylene neighbouring ports Marine
Port
customer connections in (estimate £25 million) production. In addition, in Dundee and Leith
phase 2. This could include there is an existing liquid (Edinburgh). Marine activity
a conversion of existing Transport: natural gas pipeline between is still prominent in Fife and
natural gas assets, forming (a) Levenmouth was originally St Fergus and Mossmorran. Forth Ports are key players
one of the regional served by a rail link that was in all tiers of the renewables
conversion demonstrations. decommissioned decades (d) H
100 Fife is proposing sector. Marine applications
ago. Funding has now been a fully green solution to are already being looked
announced by Transport hydrogen networks through at by the hydrogen sector.
Phase 3 Scotland for reinstating electrolysis. However,
(estimate £75 million) the Levenmouth rail link. in the future of heat, the
A hydrogen alternative gas networks must adopt
Industrial and commercial: to diesel or electric will be a technology agnostic
(a) E
xploring integrating a explored. This infrastructure view to the production of
hydrogen supply solution upgrade will further hydrogen. The inclusion
for industry through improve the connectivity of of Grangemouth into the
collaboration with Diageo, Levenmouth with key routes wider rollout of hydrogen
one of the world’s largest and cities, as well as locally. represents large scale
distillers, who have their decarbonisation through the
main packaging site and (b) Hydrogen powered reformation of natural gas
a distillery in Levenmouth. haulage logistics also to produce hydrogen with
These are located 2–3km offers a possible transport carbon capture.
from the hydrogen opportunity, in addition to
production site. new or existing hydrogen (e) W
ith the production of
fleet vehicles. hydrogen using electrolysis,
(b) 5
2 manufacturing derived from offshore
businesses operate in (c) A
s the site is located wind, the hydrogen
the Levenmouth area. next to a marine port, system at Levenmouth is
there is the prospect demonstrating a world first
for marine hydrogen power to gas zero-carbon
transport or hydrogen solution for domestic heat.
powered vessels.16 SGN Green Recovery Investment Prospectus | Carbon capture and storage – Acorn CCS | 17
Carbon capture and storage –
Acorn CCS
78
Carbon capture and storage CCS also enables BECCS (bio
(CCS) describes the process energy and CCS) which produces
of capturing carbon dioxide negative carbon emissions –
billion
emissions from processes emissions from biomethane
which would otherwise have are part of the natural carbon
vented the waste gas to cycle, and therefore if captured,
tonnes
atmosphere. CCS enables the emissions are effectively removed
use of natural gas in a net-zero from the atmosphere. BECCS
world by removing the CO2 will be critical in eliminating
emissions from its use. The emissions from sectors of the Potential storage
production of blue hydrogen economy which cannot be capacity for offshore
requires CCS for the energy practically transitioned fully C02 in the UK.
produced to be classified as away from fossil fuels, such
low carbon. as aviation.
100
Whilst green hydrogen The UK’s CCS potential is
(hydrogen from electrolysis) significant. Pale Blue Dot’s
must provide the bulk of Strategic UK CCS Storage
years
hydrogen supply in the long Appraisal Project, funded by
term as natural gas supplies the Department of Energy
diminish, blue hydrogen, and and Climate Change, concluded
by default CCS, provides a step that there are no major
change to that end goal (green technical hurdles to storing 15% of this potential
hydrogen generation capacity industrial scale CO2 offshore in capacity would
to satisfy all heat and industrial UK sites3. The project identified
capture all UK With this important pipeline The project is led by Pale Blue
emissions for over infrastructure already in place, Dot Energy, with funding and
demand will require the build- 20 specific CO2 storage sites 100 years.
out of significant offshore wind (this only represents a small Acorn CCS can be started support from industry partners
generation assets and other proportion of overall national with just a modest amount (Chrysaor, Shell and Total), the
renewable generation assets, potential with a combined of existing CO2 emissions – UK and Scottish Governments,
which will take decades). capacity of 78 billion tonnes captured directly from the gas and the European Union4.
of CO2). The top 15% of this processing units at the St Acorn CCS and Acorn
Blue hydrogen production potential capacity would Fergus gas terminal. The first Hydrogen are closely linked
allows the continued use of capture all UK emissions phase of Acorn CCS offers a with our Aberdeen Vision
natural gas in a net-zero world, for over 100 years. The UK low capital cost start, with an project and together will
securing the prosperity and undoubtably possesses a CCS investment decision planned in spearhead the development
future of the natural gas supply capacity well in excess of its early 2021, that can be delivered of the hydrogen economy
chain and those employed in it, practical needs and a capacity by 2024 – establishing the in the north east of Scotland.
whilst moving towards net-zero marketable on a global scale. critical CO2 transport and
emissions with economically storage infrastructure required The full industrial development
produced energy, allowing the Pale Blue Dot’s (Aberdeen based) for the wider Acorn build-out, of CSS is critical to the
large scale build-out of green Acorn CCS facility is a carbon including Acorn Hydrogen and decarbonisation of the UK
hydrogen from offshore wind capture and storage project the import of CO2 to St Fergus economy and will require a
(and the subsequent cost specifically designed to overcome from ships at Peterhead Port multi-billion-pound investment
competitiveness through its one of the acknowledged blockers and from Scotland’s industrial over decades.
economy of scale) and to CCS deployment in the UK – Central Belt.
stimulating the CCS industry. the high capital costs involved The initial phase of the
in getting started. Based at the Designated a European Project development of Acorn CCS
St Fergus gas terminal in North of Common Interest (PCI), will see the repurposing of
East Scotland, Acorn CCS can Acorn is an important catalyst the Goldeneye pipeline in the
repurpose existing gas pipelines for clean growth opportunities North Sea for carbon dioxide
to take CO2 directly to the Acorn in Scotland and in regions transportation, with future
CO2 Storage Site (the first CO2 where CO2 transport and phases developing a further
storage licence to be awarded storage is limited. Acorn can seven high potential sites.
by the Oil and Gas Authority). help transform the UK’s carbon
intensive industries into low-carbon
industries and sustain jobs.18 SGN Green Recovery Investment Prospectus | Green hydrogen – ERM Dolphyn | 19
Green hydrogen – ERM Dolphyn
Whilst blue hydrogen must, farms generating electricity ERM was awarded UK This project at scale could UK wind installations
and will, play a significant role are optimally located nearer Government funding to further transform the UK energy capacity (MW)
in the decarbonisation of heat demand (this is due to the fact develop their Dolphyn Project5. industry and become the
and industry, the reformation electricity is kinetic energy, as The first of a kind Dolphyn primary source of energy for the
of natural gas does still require opposed to chemical energy, project is an innovative UK economy. Green hydrogen
natural gas, which is a finite which is more practical to integrated system combining production at scale will drive
resource. The end state of the transport long distances) – all of the technologies required down the price of energy. This
UK gas industry must be one this is not always in locations to bring together the latest technology is critical in the
supplied by as close to 100% where the greatest wind floating wind turbine and future success and longevity
green hydrogen as is resource is. The greatest and electrolyser technologies. of the hydrogen economy and
practically possible. most consistent wind speeds The project aims to create a provides a route to a self-
in the UK are typically found 2 MW prototype by March 2021, sufficient, zero-carbon energy
Green hydrogen is produced in deep water locations around providing a proof of concept. supply from a secure and infinite
by the electrolysis of water into the Atlantic Coast and the If successful, ERM aim to resource. This will bring
oxygen and hydrogen and is North Coast. Building out wind significantly scale up the significant macroeconomic
powered by renewably generation for electricity at production of green hydrogen benefits, export potential, IP
generated electricity. Renewable these locations is unlikely to to arrays of 10 MW floating for British industry and
energy is practically infinite and be practical or economical electrolyser wind turbines manufacturing and enduring
reliance on it in a fully scaled due to power transmission (arrays of 400 – 20 by 20). job security.
solution (with sufficient requirements. Each array, with a generation
generation capacity and storage capacity of 4 GW, capable of Full rollout of this technology
capacity) will provide a secure Producing hydrogen with supplying heat to 1.5 million and the development of green
supply of zero carbon energy. renewable energy in remote homes. The potential of this hydrogen production is highly
Whilst 2050 targets can be locations allows instant energy project is tremendous, and its desirable and essential to
achieved through the use of blue storage to chemical energy, success has the potential to hydrogen security of supply in
and green hydrogen, green which can then be delivered unlock green hydrogen the long term. This represents
hydrogen is the only form of long distances through gas production in remote locations, a multi-billion-pound investment
hydrogen generation which can pipes (which equivalently deliver potentially utilising offshore oil requirement in the very best
reach a point of no security significantly greater quantities and gas platforms (enabling their interests of the UK economy,
of supply issues (blue hydrogen of energy than electrical cables repurposing) and stimulating the job market and environment.
is reliant on natural gas supply) at a fraction of the cost). offshore wind industry to a
and should be fully depended significant hydrogen market.
on beyond 2040. Green hydrogen enables the oil
and gas model of transporting
The UK is a world leader in stored energy ashore (rather
offshore wind energy which than generating energy where
is currently dedicated to it is needed as is the case with
electricity generation. To electricity generation) to be
optimise costs and minimise applied to the offshore wind
transmission losses, wind energy sector.20 SGN Green Recovery Investment Prospectus | Aberdeen Vision and Acorn Hydrogen | 21
Aberdeen Vision and
Acorn Hydrogen
Aberdeen is Europe’s leading The opportunity to develop a The strategic location of St Fergus
oil and gas centre, with over hydrogen economy along the Aberdeen (close proximity
half a century of heritage in east coast of Scotland will to oil and gas infrastructure,
delivering energy to the UK require significant infrastructure natural gas supply chains, high
economy. In its 50 years as repurposing and build-out in potential CCS sites, high potential
the UK’s energy capital, it has and around key locations for offshore wind locations and a
developed capabilities and IP hydrogen production to deliver highly skilled workforce across
that have generated trillions in deep decarbonisation, which engineering and construction)
exports and inward investment includes Aberdeen as a and its strong links to critical
into the UK. The nearby port at strategic location. Through a hydrogen projects makes it an
St Fergus is where 35% of the range of initiatives including essential area for investment
UK’s natural gas is brought to Aberdeen Vision, H100 Aberdeen as part of the Green Recovery
shore. As we strive towards our feasibility, Acorn CCS, Acorn in the coming years. The
net-zero emissions target, the Hydrogen and ERM’s Dolphyn consequences of not investing
development of a hydrogen project, Aberdeen continues in this area, and industry, would
economy and supply chain to be a hub of activity for result in the missed opportunity
in Aberdeen and the north hydrogen deployment. to develop a world-leading
east of Scotland presents a hydrogen economy in the
tremendous opportunity to put The uses of hydrogen in UK, which would be highly
the region at the leading edge transport have also been detrimental to not only the
of the zero-carbon supply pursued in Aberdeen, which is economy of the north east
chain, maintaining its status as now home to one of the largest of Scotland, but the UK’s ability
a world-leading energy centre and most varied hydrogen to achieve net-zero targets.
in a net-zero world. road transport fleets in the
UK including buses, hydrogen
refuelling stations and hydrogen Our Aberdeen Vision project electrolysed offshore wind This project has the potential
fleet vehicles available to aims to unlock the hydrogen (Dolphyn project) would be to deliver at least 1.5 million
businesses as part of a car club. economy in Aberdeen and injected into a dedicated 100% tonnes of CO2e emissions
Furthermore, The Event Complex the surrounding area. Acorn hydrogen pipeline, laid to reduction per annum (with a
Aberdeen (TECA) is a world- Hydrogen will supply the Aberdeen, allowing an initial 100% hydrogen Aberdeen Local
class, £330 million facility and hydrogen for this project with 20% blend by volume to the Distribution Zone (LDZ)), and
is recognised as the UK’s most Aberdeen Vision enabling network increasing to 100%. in the process provide a
sustainable venue, all powered the demand through the The pipeline would supply the significant boost and growth
by an onsite energy centre and construction and repurposing existing and proposed refuelling stimulus to the north east of
anaerobic digestion plant using of the infrastructure required solutions in Aberdeen. There Scotland and the city
renewable energy sources and to transport it. Phase 1 of this is also future opportunity of Aberdeen; an area and city
features the largest hydrogen project has concluded and to blend into the National heavily reliant on the oil and gas
fuel cell installation in the UK. assessed the feasibility of Transmission System. industry. Early investment in this
constructing a 200 MW Steam project, which is planned to roll
Methane Reformer (SMR) at The full build-out of this out to 100% hydrogen by
St Fergus (as part of Acorn project will require an around 2028, will provide
Hydrogen), constructing a 100% investment of around £100 welcome economic and
hydrogen pipeline to Aberdeen million to achieve enough decarbonisation benefits to
and developing Aberdeen’s gas capacity for a 20% blend in the area and industry, and will
network infrastructure to enable Aberdeen City with further afford this critical project the
up to 20% by volume into the investment required to achieve maximum chance of success.
energy blend. a 100% hydrogen distribution.
A hydrogen SMR blue hydrogen production, This project provides a route
economy in which will be built out as part of for the decarbonisation of heat,
Pale Blue Dot’s Acorn Hydrogen industry and transport in the
Aberdeen would project, will separate natural north east of Scotland. The
maintain its status gas from St Fergus gas terminal creation of hydrogen demand
as a world-leading into hydrogen and carbon (enabled by a repurposed gas
energy centre in dioxide using steam, with the infrastructure) will enable the
a net-zero world CO2 by-product captured and repurposing of the North Sea
stored permanently at Pale Blue oil and gas industry to produce
Dot’s Acorn CCS facility in the blue and green hydrogen.
North Sea. Hydrogen both from
reformed natural gas and22 SGN Green Recovery Investment Prospectus | Energy system transition | 23
Machrihanish hydrogen Energy system transition
demonstration
100%
Machrihanish Airbase We have ambitions to build out In RIIO-GD2, we aim to prove The execution of this
Community Council (MACC) all three sites in time. The site and demonstrate the safe and programme of work as part
is the proposed area for a at Machrihanish is of particular efficient transportation of up of the whole suite of R&D
secondary H100 demonstration interest (the site at Aberdeen to 100% hydrogen through our is essential in enabling the In RIIO-GD2, we
site, following on from the has been incorporated into the network, enabling the rollout repurposing of the GB gas aim to prove and
progression of H100 Fife. Aberdeen Vision project) due of 100% hydrogen networks network infrastructure demonstrate the
The site is the former RAF to its remoteness and variation in 2026 at strategic locations. to enable the hydrogen safe and efficient
Machrihanish which was in renewable supply (wind and We proposed a highly ambitious economy. transportation of up
operated as a military airbase solar). The build-out of this site, and far reaching programme of to 100% hydrogen.
between 1918 and the 1990s, which will likely require an work to Ofgem in GD2, the
located around five miles to investment in excess of £15 detail of which can be found in
the north west of Campbeltown. million, aims to produce the RIIO-GD2 business plan and
60
hydrogen from the electrolysis supporting appendices.
Campbeltown is one of of renewable energy sources
five Statutory Independent to supply a 100% hydrogen This programme of work,
Undertakings (SIUs) operated network to around 300 which contains over 60 named Number of projects
by SGN and is supplied by customers in Machrihanish. projects, intends to tackle the needed to tackle
liquefied natural gas (LNG), A further £15 million would technical and safety knowledge technical and safety
which is shipped in via road lead to an expansion to 1,000 gaps and subsequently remove knowledge gaps to
tanker. The site operates as a customers in Campbeltown. all barriers preventing the pave the way for a
business park and community large-scale rollout of hydrogen large-scale rollout of
facility, comprising of 137 In parallel, the project would networks in GB. The programme hydrogen networks.
households and 21 commercial seek to install a range of will also consider regional
premises. These are connected downstream renewable strategy in order to ready and
to a private wire network technologies, such as air source identify frontier towns suitable
supplied by National Grid heat pumps, to compare the for the first rollout of 100%
through MACC as the landlord. operation of heat pumps and hydrogen networks.
There is no existing gas hydrogen boilers at the same
infrastructure at this site. location. This would represent
There is also 250kW of solar an ideal test bed to determine
PV developed on site which the suitability of various heating
supplies the private wire, with technologies to feed into a
a further 1 MW consented. coordinated whole system
Beyond a hydrogen network, approach to the decarbonisation
features of this site offer the of heat with electricity networks.
option to explore hydrogen The remote west coast location
solutions for aquaculture, of this site does not tie into the
industrial demand, proposed east coast of Scotland
decarbonising haulage routes hydrogen coast concept;
and marine applications. however, it does present itself
as a useful test bed for low-
H100 Fife will be the world’s carbon heat technologies.
first 100% hydrogen heat
network. This site was chosen Investment in this project would
following a comprehensive stimulate the local economy and
and competitive process provide an invaluable opportunity
between different bidders and to develop a hydrogen economy Progressing Development of the UK’s
1 4
https://theacornproject.uk/
Strategic Carbon Dioxide Storage
locations. Feasibility studies in the west of Scotland, Resource – a summary of results from 5
https://www.erm.com/news/erm-gets-
were conducted for sites in providing a route to the the Strategic UK CO2 Appraisal go-ahead-to-develop-green-hydrogen-
Aberdeen, Machrihanish and at decarbonisation of the wider Project – April 2016, Costain, Energy at-scale-from-offshore-wind/
Levenmouth. Machrihanish and area, including the city of technologies Institute, Pale Blue Dot
and Axis Well Technologies. https://www.modernpowersystems.
Levenmouth were progressed Glasgow. This project is likely com/features/featuregetting-green-
to FEED and Levenmouth was to have the same growth 2
https://renewablesnow.com/news/ hydrogen-production-into-deep-water-
ultimately selected for the potential as H100 Fife, with study-sees-260-growth-in-uk-offshore- the-dolphyn-project-7780776/
H100 demonstration. similar access to offshore wind wind-jobs-by-2032-severe- featuregetting-green-hydrogen-
competition-for-talent-632330/ production-into-deep-water-the-
potential. The economic growth dolphyn-project-7780776-503836.html
and development of the area, 3
Energy Technologies Institute,
if this project is progressed to Strategic UK CCS Storage Appraisal
full completion, is tremendous. – https://www.eti.co.uk/programmes/
carbon-capture-storage/strategic-uk-
ccs-storage-appraisal24 SGN Green Recovery Investment Prospectus | Executive Summary | 00
Energy efficiency programme
The delivery of a national A major driver for energy In the short term, estimates
energy efficiency programme efficiency is the associated suggest 66,000–86,000 new
for UK households would carbon savings and reductions jobs could be sustained annually
create jobs; substantially in consumer bills. The The across the UK. While some
reduce carbon emissions and Committee on Climate Change resources could quickly start
support net-zero targets, (CCC) estimate that the annual and carry out activities such
reducing the impact of climate direct emission savings from all as survey work, there is a
change; and help customers residential energy efficiency requirement to either up-skill
with rising energy bills and could be 6 MtCO2 by 2030. our existing resources or recruit SGN
affordability challenges in It is also believed that total additional resources in order St Lawrence House
the wake of the COVID-19 energy use could be reduced to undertake all of the activities Station Approach
pandemic. by approximately 25% by requried for a full energy Horley, Surrey
2035 through cost-effective efficiency upgrade. RH6 9HJ
Energy use in homes accounts investments in energy efficiency,
for approximately 14% of UK with related consumer savings Deployment of energy efficiency sgn.co.uk
greenhouse gas emissions. on annual domestic heating in households is likely to be more
These emissions need to fall energy bills through energy efficient if a ‘street by street’
by 24% by 2030 to meet efficient insulation. approach is adopted where
decarbonisation targets, scope and scale efficiencies
suggesting a major improvement Previous energy efficiency can be realised, enabling
in housing energy efficiency is schemes have seen challenging very targeted customer
required. Whilst energy efficient levels of customer take-up even communications to help win
white goods, lighting and when it has been offered for customer support. Local networks
consumption monitoring/ free due to the perceived have significant experience
metering (e.g. smart meters) hassle factor (i.e. clearing lofts). of through managing the Iron
are becoming increasingly However, this was before net- Mains Replacement Programme
commonplace, improvements zero and increased evidence and which was mandated by the
in housing infrastructure and acceptance of climate change Health and Safety Executive
insulation are less advanced impacts and affordability in 2002, their established
and could provide significant pressures due to rising customer processes and approach currently
improvements in energy bills. A programme now sees replacement at 70–75%
efficiency with respect to accompanied with a targeted based on 2002 levels and will
household heating. communications plan could complete in 2032.
drive a significant improvement
in consumer take-up. Local authorities, charities
and energy suppliers could be
A national, network-led required to provide additional
programme could be an effective customer information and work
way to establish a least cost with networks to support
solution which could be quickly customer engagement and
established using existing communication. This could help
infrastructure. Local networks target and prioritise local areas
could utilise existing supply to drive maximum benefits and
chains creating a significant protect vulnerable customers
number of local jobs and whilst helping to engage
providing benefits to the customers and drive higher
wider economy. take-up.You can also read
