Plans which could eventually see Aberdeen become a pioneering exporter of Hydrogen look set to take a major step forward.
Aberdeen City Council’s City Grown and Resources Committee will today be asked to sign-off proposals to create a joint venture with bp to deliver its Aberdeen Hydrogen Hub (AHH) project.
Councillors will also hear details on the proposed joint venture structure, governance, obligations, associated risks and the return on investment expected to the council through participation in the scheme.
Council officers have recommended that, subject to compliance with subsidy control legislation, councillors approve the appointment of bp as joint venture partner to deliver the Aberdeen Hydrogen Hub Strategic Partnership, following a public procurement procedure, and approval of the business case.
New entity
If approved, the plans will see bp and the council create a new company to deliver the plans.
A key part of the programme will involve the creation of Scotland’s first scalable green hydrogen production facility.
Phase 1, which involves delivery of a green hydrogen facility, is targeting first operations from 2024.
Options could include using power drawn from a new solar farm, green power purchase agreements and a private wire grid connection to generate hydrogen for buses, heavy goods vehicles and large vans.
Future phases could then see production scaled up through further investment to supply larger volumes of hydrogen for rail, freight and marine, as well as supply of hydrogen for heat and potentially export.
Potential
Aberdeen City Council, in partnership with Opportunity North East (ONE) and Scottish Enterprise (SE), appointed Element Energy in 2019 to review the business case for the hydrogen sector in Aberdeen following successful pilot projects – including the Aberdeen hydrogen bus project and Council fleet deployment – but continuing market failure for wider commercial adoption of hydrogen.
The report concluded that collating hydrogen demand across fleets, increasing production and supply of green hydrogen by connecting to large scale renewable generators, and coordinating supply chain and training could lower the price of hydrogen and catalyse use by other growth sectors seeking to decarbonise (heat, industry, maritime, rail etc).
This would then create significant economic opportunities as part of an energy transition in the North-east; unlocking new economic opportunities worth upwards of £700million gross value added to Scotland’s economy by 2030, as well as thousands of high-value jobs in Aberdeen and the surrounding region.
Phased development
It is envisaged that the AHH will be developed in three phases in response to growing demands for hydrogen:
- Phase 1: initial production for public sector consumption including the provision of a resilient, cost effective supply of hydrogen on a commercial basis to the market to support both existing and proposed transport projects.
- Phase 2: expansion in the short to medium term to connect to larger volume utilisation of hydrogen - rail, trucks and marine use.
- Phase 3: hydrogen for heat and export. Whole system approach to supply and demand. Innovation, skills and transition hub to support expansion of the local supply chain. Pursue the ambition for Aberdeen to be the centre of a brand new energy production business, exporting hydrogen to the world. Recent ScotWind announcements may support the future delivery of Phase 3.