A major green energy project in Teesside may no longer be going ahead, as BP shifts strategic focus away from investment in renewable projects.
Since its announcement to shareholders last week that it would be “lowering capex into transition businesses”, BP has told Energy Voice its focus on Teesside no longer includes the HyGreen project.
HyGreen was to be the company’s first green hydrogen project in the UK. The planned large-scale green hydrogen production facility at the Teesworks site aimed to generate 500 megawatt electrical input (MWe) of hydrogen production when fully operational.
A spokesperson for BP told Energy Voice: “We’ve been clear in our recent strategy reset announcement that we’re focused on high-graded projects in hydrogen and carbon capture, prioritizing 5-7 projects for this decade.
“In the UK, our focus is on the significant projects in Teesside – NZT Power, NEP and H2Teesside.”
NZT Power is a gas-fired power station on the former site of the Redcar steelworks, while the Northern Endurance Partnership (NEP) is the joint venture between BP, Equinor and Total to build carbon capture and storage infrastructure to reduce emissions from NZT, before rolling the scheme out in phases for other projects in the region to connect to it.
Contracts were signed in December 2024 with the UK government providing billions of pounds of investment to help development of the schemes. It is thought that construction of NZT could support up to 2,000 jobs.
H2Teesside is BP’s planned blue hydrogen project, which aims to produce 1.2 GW of hydrogen production a year.
Planning application expired
BP had submitted its planning application for HyGreen to Redcar and Cleveland Borough Council in April last year, explaining that the plant would “use electrolysis to split water molecules into hydrogen gas and water using electricity produced primarily from renewable sources.”
The plan also included building pipelines to export hydrogen to industrial offtakers around Teesside.
However, with BP shifting focus from transitionary energy projects, the planning application expired last week – just days after it announced cuts in renewable energy investments and an increase in oil and gas production.
HyGreen was announced in November 2021, with BP hoping to create 600 construction jobs, and a further 100 jobs once operational.
It said at the time that HyGreen Teesside would be “vital for supporting low-carbon industry and power projects across the region”.
The UK government’s Department for Energy Security & Net Zero declined to comment on BP’s abandonment of its first green hydrogen scheme in the UK.
The Tees Valley Combined Authority, whose Conservative mayor Ben Houchen described the project as “yet another coup for the region as we lead the UK in creating the cleaner, safer and healthier jobs and communities of the future,” also declined to comment.
Since coming to power, Labour has doubled its low-carbon hydrogen production target to 10 GW by 2030. But low-carbon (AKA green) hydrogen is very expensive to produce and there is no ready market for this quantity of hydrogen, even if the capacity target were reached.
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