COP26: Hydrogen economy in Yorkshire could open 'floodgate of investment' and thousands of new jobs

Further government clarity on its hydrogen strategy and the support it will give to help the industry scale up could open a 'floodgate of investment' and thousands of new jobs in Yorkshire, according to a former senior figure at utilities giant Centrica.

Prime Minister Boris Johnson unveiled a hydrogen powered JCB Loadall telescopic handler in central London earlier this month

The former chief executive of Centrica Storage, which is preparing to press the button on a £1.6bn overhaul of its Rough gas storage site in the North Sea so it can store hydrogen instead of methane, said East Yorkshire was well placed to benefit from the hydrogen push.

Speaking to The Yorkshire Post before he departed, Greg McKenna said: “We’ve got the wind farms, we’ve got the power stations, we’ve got the petrochemicals. It all needs to be converted.”

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He added: “The Government is extremely positive towards hydrogen and it realises that we need to get the hydrogen economy up and running as quickly as possible if we’re going to make our decarbonisation targets.

“It’s not one thing that’s going to get us to net zero. We’re going to have hydrogen, electrification, solar, nuclear and wind. It’s a combination of all those things.

“But we are running out of time. We need to start building this stuff and make it happen. The money is out there - there are infrastructure funds, banks and people who are desperate to start building this infrastructure but you can‘t build it if you don’t know what’s going to happen.

“We need clarity from the Government and we need some assurance of what that future is going to look like. Once we’ve got that I think there’ll be a floodgate of investment and with that will come masses of jobs.”

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In August, ministers unveiled the UK’s first hydrogen strategy aimed at helping reduce carbon emissions across a number of sectors from heavy industry to home heating.

The Government promised to create 9,000 “high quality” jobs by the end of the decade.

However, Mr McKenna said Centrica needs to see a government support model before it is prepared to kickstart the project at Rough.

“We’re not asking for any money but no board is going to sign off a £1.6bn investment if they don’t know they’re going to get their money back,” he said. “What we’re looking for is some sort of regulated model, some sort of guarantee that says if we don’t make a return the government will prop up the difference. It’s the same model that the National Grid is based on. We just want the government to be a guarantor.”

A key theme of the strategy is hydrogen networks and storage and Mr McKenna said Rough was ideally positioned to become the UK’s biggest hydrogen store.

Using soon-to-be redundant gas fields in the North Sea for both the storage of hydrogen, and for carbon capture would be key to moving the UK away from its reliance on fossil fuels, he said.

Rough employs 350 people but supports over 1,000 jobs in total.

Its storage element closed in 2017, with the infrastructure having survived beyond its initial design life. The other 50 per cent of the field is still producing natural gas, though it is anticipated to come to an end in February 2023.

“Instead of shutting Rough down in 2023, we want to repurpose it as the UK’s biggest hydrogen store,” Mr McKenna said.

The Government is taking a ‘twin track’ approach by supporting both ‘green’ electrolytic and ‘blue’ carbon capture-enabled hydrogen production.

Equinor’s Hydrogen to Humber (H2H) Saltend project at Saltend Chemicals Park near Hull, focuses on ‘blue’ hydrogen. Its initial phase will comprise a 600MW auto thermal reformer with carbon capture to convert natural gas to hydrogen.

When operational, it is expected to be the largest plant of its kind in the world, enabling industrial customers in the park to fully switch to hydrogen, and the power plant in the park to move to a 30 per cent hydrogen to natural gas blend.

“Humberside is one of the biggest CO2 polluters in the UK but there’s a potential to make a big impact here that’s good for the whole country,” Mr McKenna said.

“It could become the biggest hydrogen producer and the biggest hydrogen store, which helps the whole decarbonisation agenda.”