Aberdeen City Council (ACC) has picked oil and gas giant BP (LON: BP) as the preferred bidder to help build a green hydrogen production hub.
The commercial partnership, formed following a robust tender process that kicked off in June, aims to establish the Granite City as a “world-class” base for hydrogen.
A key part of the Aberdeen Hydrogen Hub programme will involve the creation of “Scotland’s first” scalable facility capable of producing green hydrogen.
It’s hoped phase 1, which involves delivery of the £215 million project, will be up and running from 2024.
As the preferred bidder, BP will now work with the local authority to conclude the contractual process, which will lead to the set-up of the joint venture.
Options being explored to power the facility include a new photovoltaic solar farm and green power purchase agreements.
A private wire grid connection to generate hydrogen for buses, heavy goods vehicles and large vans is also on the cards.
A final investment decision on the selected development concept is expected in 2023.
Future phases could allow production to be scaled up through further investment, allowing the low carbon fuel to be supplied to rail, freight and marine operations.
Hydrogen could also be used to heat homes and potentially exported.
Expansion of the facility would be aided by the expected boom in renewable energy sources, particularly offshore wind farms emerging as part of the ScotWind leasing round.
© PRESS AND JOURNALA recent study commissioned by ACC on the growth in demand for hydrogen power estimates 700 skilled jobs could be created in the industry by 2030, if an export market is established.
Louise Kingham, BP’s UK head of country and senior vice president for Europe, said: “It’s a really exciting announcement. BP wants to play a leading role in Scotland and the energy transition so today’s news is great. Alongside the bid we’ve got in with ScotWind, it’s real evidence that we want to be part of the movement to a new energy future.
“We’ve got over five decades of experience in the North Sea and BP has been in Scotland for a century. It’s a fantastic opportunity for us to create that bridge and introduce these new projects, alongside what will be continue to be a very busy North Sea.”
She added: “The hard work starts now. What we’ve got to do is work together over the next few months and into Q1 2o22 to set up a joint venture.
“Within that, we can start to think about design work, draw up concepts and make some decisions about how we’re going to put this project into action.”
The Aberdeen Hydrogen Hub programme will support the local authority’s ambitions to create a “climate positive city” and build “inclusive growth” by supporting supply chain development, skills and training, and wider community benefits.
The local authority has already made significant low carbon plays in order to sow the seeds for a hydrogen economy in the north-east.
Hydrogen is currently used to power a fleet of 25 buses, 60 public sector vehicles and waste trucks, as well as the P&J Live events complex.
More than two million passengers have travelled on the city’s hydrogen buses, and its claimed CO2 savings to date are in excess of 100 tonnes over the last six years.
Jenny Laing, Aberdeen City Council Leader, said: “This is a huge announcement for Aberdeen. It paves the way for the city to be a world leader in the production of hydrogen-based green fuel and energy.
“It will help create a cleaner, more sustainable city for local people and it also provides us with the opportunity to create hundreds of skilled jobs and add millions to the Aberdeen economy.
“There is tremendous investment potential, and we already have deep-rooted skills and experience in the energy sector to tap into.
“Aberdeen has a worldwide reputation as a pioneering hydrogen city with a net zero emissions vision. We are already leading the way to a greener, cleaner future and working with BP, we intend to put Aberdeen at the forefront of the green economic recovery.
“We already have a successful partnership with BP, who have advised the Council on the delivery of our Energy Transition Strategic Infrastructure Plan and this exciting announcement builds on that work.”
Last year, BP formed a partnership with Aberdeen in order to help the city deliver on its net zero ambitions.
In response, Extinction Rebellion decided to dump a load of manure outside the oil and gas major’s Aberdeen base.
The environmental group also accused BP of ‘greenwashing’, something Ryan Houghton, Aberdeen City Council’s Convenor for City Growth & Resources, said is “unfair”.
He added: “Aberdeen has benefitted immensely from oil and gas and many of the sector’s biggest companies, including BP, have recognised the need to transition.
“The drive to net zero will require a lot of investment up front and we need to work with people and businesses that want to arrive at the same destination.
“We want to get to net zero, BP wants to get to net zero and they’ll be crucial in achieving that. We can’t be ideological, we have to be pragmatic.”
Over the next decade, BP expects to partner with 10-15 cities globally to provide innovative, integrated and decarbonised energy solutions at scale.
© PRESS AND JOURNALWilliam Lin, the supmerajor’s executive vice president regions, cities and solutions, said: “BP is truly delighted to have been selected as preferred bidder for this new low carbon energy project which will help develop an integrated, end-to-end energy system for the city based on green hydrogen with real potential for future growth within Aberdeen and beyond.
“The hub builds on Aberdeen’s leading position as a global energy centre as well as its growing reputation as a centre of excellence for hydrogen technology.
“For BP, this is further evidence of putting our strategy into action as we seek to provide integrated energy solutions to help cities and corporations decarbonise and get to net zero. We are very proud of the partnership and cooperation that we have with the Council and look forward to deepening our relationship going forward.”
Mike Tholen, sustainability director at Oil and Gas UK (OGUK), said: “It is exciting news that BP has been selected to accelerate Aberdeen City Council’s hydrogen ambitions.
“Hydrogen is recognised by the Climate Change Committee as a key technology that’s needed for the UK to achieve net zero emissions by 2050 – providing a clean fuel alternative for heating and transport. It is also a central part of our landmark North Sea Transition Deal with the UK Government.
“The offshore oil and gas sector’s skills and infrastructure will be key for the UK to successfully scale up this crucial greener energy across the country.”
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