Largest onshore gas storage site making good progress

Scottish and Southern Energy (SSE) is working on a joint venture with Statoil to develop underground storage capacity of around 420m cubic metres at the Aldbrough site.

The companies are forming nine gas caverns 2km underground by leaching or dissolving salt deposits with sea water to be replaced by gas under pressure.

The project was given the go-ahead in 2007 after planners said it "can legitimately be regarded as essential for the national interest", given forecasts that the UK will be up to 90 per cent reliant on gas imports by 2020.

In a statement yesterday, SSE said: "The development already provided capacity in four caverns at the end of the last financial year and further capacity is expected to become available by the end of this financial year, when there will be six caverns storing a total of around 175mcm of gas.

"The development as a whole, which will comprise nine caverns in total, remains on schedule to be completed in 2012."

SSE is spending 290m on its 66 per cent stake in the project.

The company gave updates yesterday on other projects including onshore and offshore wind farms and the Beauly to Denny electricity transmission line in Scotland.

In total, the business has around 1.3bn invested in projects under construction.

Ian Marchant, chief executive of SSE, said: "Our programme of investment is designed to deliver assets in renewable energy, electricity networks and gas storage which will contribute to secure lower-carbon supplies of energy and support SSE's long-term commitment to above-inflation dividend growth.

"We have made solid progress in recent months, but discipline in project assessment, development and execution remains paramount for the rest of this financial year and beyond."

The energy giant also revealed yesterday that it had reached the 10 million milestone for customer accounts – more than double the 4.5 million seen in 2002.

It has increased gas and electricity customers in Britain and Ireland by 335,000 in the past 12 months, while its total customer base rose by 375,000. SSE said it is on course to increase annual dividend payments by at least 2 per cent more than RPI inflation.

In May, the utility said annual profits grew to 1.29bn despite falling power use among its customers.

The UK's second biggest energy firm, which owns Ferrybridge coal-fired power station in West Yorkshire, said average energy use by its household customers had fallen in each of the previous three years, despite progressively colder winters.

Shares closed last night at 1118.00, down 1.15 per cent.

ITM power makes another signing for its hydrogen vehicle refueller

Clean fuel firm ITM Power has signed Scottish and Southern Energy to test its high-pressure hydrogen vehicle refueller.

The AIM-listed Sheffield firm said SSE has agreed a deal to participate in its Hydrogen On Site Trials (Host) programme.

SSE joins Sheffield City Council, the London Borough of Camden, logistics firm DHL, London Stansted Airport, and the Forestry Commission in signing up for the trials.

ITM is currently building its HFuel high-pressure refueller, thanks to support from the Technology Strategy Board and partners Gateway to London and Revolve Technologies.

ITM's innovative electrolyser technology creates high-purity hydrogen from electricity and water.

Trials will start next year, once HFuel has been built, and will provide each council with two Ford Transit vans run on hydrogen generated by portable refuellers.