SSE Thermal partners with Kellas Midstream, acquiring 50% ownership of the H2NorthEast hydrogen project in Teesside. Set to bolster a decarbonized power system by 2035, the initiative aims to produce blue hydrogen with carbon capture and storage, contributing to the UK's hydrogen ambitions and fostering a low-carbon future.
SSE Thermal has made a significant move by securing a 50% stake in the H2NorthEast hydrogen project, joining hands with Kellas Midstream. This collaborative endeavor in Teesside holds promise for steering a robust, low-carbon power system by 2035 while expediting industrial decarbonization.
The partnership's primary focus lies in jointly developing H2NorthEast, envisioned as a hydrogen production facility integrated with carbon capture and storage capabilities. This venture aims to serve as a catalyst in igniting a hydrogen-driven economy within the Tees Valley. The initial deal, amounting to less than £10 million, represents SSE Thermal's proactive investment in Kellas Midstream, with further potential contingent considerations based on the project's financial investment decision.
H2NorthEast's primary phase is slated to yield around 355MW of blue hydrogen production capacity commencing in 2028, with ambitious plans to scale up beyond 1GW. The envisioned off-takers encompass heavy industry sectors and power generation, facilitating blending into existing assets or commissioning new hydrogen-fired plants.
Recognizing the pivotal role of blue hydrogen in securing a reliable and decarbonized power system, the Climate Change Committee underscores its capacity to drive demand for hydrogen at scale. The project's successful execution aligns with the UK Government's aspirations to achieve 10GW of low-carbon hydrogen production by 2030, a substantial portion of which could be contributed by blue hydrogen initiatives like H2NorthEast.
Teesside emerges as a strategic focal point for decarbonization, with the UK Government actively promoting CO₂ infrastructure development in the region. H2NorthEast's participation in the East Coast Cluster positions it advantageously to secure connections to shared CO₂ pipelines through the forthcoming Track 1 Expansion process, facilitating safe emissions capture and storage beneath the Southern North Sea.
SSE Thermal's involvement in H2NorthEast marks a strategic enhancement to its hydrogen portfolio. The project, bolstered by support from the UK Government's Net Zero Hydrogen Fund, is currently undergoing Front End Engineering and Design led by Worley and Johnson Matthey.
The anticipated carbon capture rate of 97% at H2NorthEast places it in compliance with both UK and EU low-carbon standards, emphasizing its alignment with sustainable activities outlined in the EU Taxonomy and the UK's Low Carbon Hydrogen Standard.
SSE Thermal's partnership in H2NorthEast signifies a robust commitment to drive low-carbon hydrogen production in the UK. This collaboration holds promise in contributing significantly to the nation's hydrogen aspirations, aligning with decarbonization goals while fostering industrial growth in a sustainable, eco-friendly manner.