Written evidence submitted by Storegga, Lead Developer of the Acorn Project and the Scottish Cluster (HCC0052)

Scottish Affairs Committee / follow up notes

This document has been prepared for submission to the Scottish Affairs Committee following Sarah Potts’ appearance in July to outline a number of points that the Committee sought further clarity around:

Storegga’s understanding of why the Acorn Project was selected as a reserve cluster

The UK Government has committed to having four carbon capture and storage clusters online by 2030 - delivering 20-30 megatonnes of carbon dioxide (MtCO₂) per year to safe storage by 2030 and up to 50 MtCO₂ per year by 2035. The Scottish Cluster, led by Storegga, was awarded Track-1 reserve status, in the UK Government’s current CCUS cluster sequencing programme in October 2021 and works closely with BEIS on the process. 

Storegga was disappointed not to secure a position as one of the first two industrial clusters in 2021, with the project scoring top in two of the five scoring criteria and second for another scoring criterion. Whilst Storegga has not seen the criteria awarded to the two successful clusters, we understand that two of the criteria that the Cluster scored less well on were:

1. The size of the emitter base that could connect into the Scottish Cluster – when compared to the two Track-1 clusters – the Scottish Cluster was conservative in its projections. Storegga and the Scottish Cluster has focused on broadening this emitter base significantly since October 2021, Ineos and Exxonmobil are now key components of the Cluster. Further work continues to grow this emitter base working with Scottish Enterprise and NECCUS.
2. The scoring criteria failed to reward the Scottish Cluster’s non-pipeline transportation ambition to introduce shipped emissions from the rest of the UK (and central Europe). The Scottish Cluster is able to deliver resilience in a way that neither of the Track-1 clusters can when they require planned or unplanned maintenance, and also the potential to import emissions from Europe where storage facilities are not at the scale required to support decarbonisation. The CCSA is helping Government to understand this issue in better detail ahead of the Track-2 process and since the Track-1 decision, the Government has already shifted to view legislation on non-pipeline transport more favourably.
• Further to this, the inclusion of the UK, and Europe’s first, at-scale Direct Air Capture facility was not scored favourably – despite it representing significant investment, providing thousands of construction jobs and demonstrating the UK’s global leadership position – however Government’s thinking on engineered Greenhouse Gas Removal technology has developed considerably since the Track-1 criteria was written and we expect this technology to form a key part of the Track-2 process.

The BEIS energy minister has confirmed that the Scottish Cluster is ‘first reserve’ and ‘met the eligibility criteria and performed well in the evaluation criteria.’ Further to this the Minister noted that ‘being a reserve in Track-1 in no way prejudices a cluster’s position in Track-2—in fact, it rather enhances it.’

It is clear to Storegga that non-pipeline transport and engineered Greenhouse Gas Removal technology (such as Direct Air Capture) needs to form a key part of the Track-2 criteria to enable the Scottish Cluster to deliver the maximum value for Scotland and the UK.

Any data we can provide on hydrogen job growth potential for Scotland

The Scottish Government’s draft Hydrogen Action Plan notes that ‘the growth of a strong hydrogen sector offers significant opportunities for regional and local economic benefit, creating new high-quality green jobs in our rural communities, islands and cities, and new opportunities for those currently working in high carbon sectors. Our analysis indicates that a strong hydrogen sector in Scotland could support up to 300,000 jobs across all skill levels by 2045. Many of the skills required already exist in our renewable and offshore industries.

Element Energy’s report on the role of Acorn Hydrogen in Enabling UK Net Zero also notes the unique advantages of the project for getting hydrogen off the ground quickly: “the project is also highly scalable, due to large volumes of natural gas feedstock available, the massive offshore CO2 storage capacity and the availability offshore pipeline infrastructure. This means that large volumes of hydrogen can be generated in the 2020s and beyond, offering an opportunity to establish hydrogen infrastructure before other complementary decarbonization technologies reach scale.”

This report also highlights three possible scenarios for delivering Net Zero in Scotland using hydrogen. The first looks at regional growth of hydrogen by injecting it into the NTS to help decarbonise the gas network and use hydrogen to aid in industrial decarbonization. The second scenario focuses on rolling out a Scottish Hydrogen Economy, deploying the clean energy nationally to decarbonise 20% of the energy demand from the distilling sector. The third scenario is a European Outreach programme that places Scotland as an importer and exporter of hydrogen, leveraging Scotland’s maritime infrastructure and increasing with growing hydrogen demand. In all three scenarios, there is a massive opportunity to decarbonise Scotland, grow the hydrogen economy and provide green jobs.

Storegga is also commissioning an updated report on the economic impact of the Scottish Cluster. Although this report will not be available before the end of this consultation period, if the Scottish Affairs Committee is interested, we will be happy to share the final result when it is complete.

The importance of blended hydrogen

Like hydrocarbons, pure hydrogen reacts with the air around it to combust and produces a large amount of heat as energy. Unlike the hydrocarbons, pure hydrogen does not leave behind contaminant particles.  The amount of oxides it creates is minimal compared to that of fossil fuels, and hydrogen's main by-product, water, is harmless. Hydrogen is crucial to achieving a rapid transition to low carbon energy and is therefore a vital tool for enabling the UK to reach net zero.

Storegga believes that both green and blue hydrogen have a major role to play in reaching net zero. Both are clean energy sources. For instance, blue hydrogen captures over 90% of the CO2 produced and enables the decarbonisation of natural gas which would otherwise emit CO2 at the point of use. For residual emissions Direct Air Capture (DAC) is a complementary technology which could be utilised to ensure full chain removal of all associated emissions.

Blue hydrogen could enable a very fast transition to low carbon energy if widely deployed. For example, the repurposing of gas infrastructure is best achieved initially by using blue hydrogen to enable rapid decarbonisation to take place at scale. This in turn, will be vital for the development of hydrogen applications across the economy.

Storegga’s strategy is to develop both blue and green hydrogen. Deploying blue hydrogen can quickly enable the large-scale transition that will make green hydrogen more economic. History shows that the adoption of new fuels such as hydrogen normally takes decades. But the IPPC is clear[1] that the climate is changing very quickly. Nobody has the luxury of time. Storegga wants to see both forms of hydrogen succeed, with the transition from blue to green achieved as quickly as possible.

Acorn Hydrogen is a hydrogen production facility being developed at St Fergus in Aberdeenshire, where around 35% of the UK’s natural gas currently comes onshore. This location places Acorn Hydrogen right at the entry point for natural gas entering the UK National Transmission System (NTS). As a result, we can make significant emissions reductions one entry point, rather than several output points.

The plan is to use renewable electricity for the plant’s operating needs, which will drive down relative emissions from the hydrogen production process. Acorn Hydrogen is planning a phased deployment, which will see 900MW operational by 2030 with the first 300MW reformer operational in 2027. Funding has been secured for Front End Engineering Design and the project aims to achieve a positive Final Investment Decision before in 2024.

Acorn Hydrogen will provide the foundations for wide scale hydrogen adoption across the UK. The 300MW reformer will supply an initial 2% blend of hydrogen by volume into the National Transmission System (NTS) at St Fergus. This can be rapidly scaled up. SGN plans to build a new pipeline to carry 100% hydrogen from St Fergus to Aberdeen. The new pipeline will enable the whole city to move to an initial 20% blend of hydrogen when Acorn Hydrogen becomes operational.

August 2022

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