Green hydrogen project in Scotland would be Europe’s biggest

Plans to build Europe’s largest green hydrogen project in Scotland are being drawn up to provide a cleaner alternative fuel for heavy industry and help alleviate the bottleneck in the energy system along the Scotland-England border.
A planning application has been submitted by Statera Energy, a British specialist in battery storage and other types of flexible energy generation, to develop the Kintore Hydrogen project in Aberdeenshire.
Statera will spend £600 million on developing 500 megawatts of capacity by 2028, before scaling up to 3 gigawatts by the end of the decade.
The benefit of hydrogen is that it does not emit carbon dioxide when burnt. So-called green hydrogen is the cleanest form of production, made by splitting water into hydrogen and oxygen with an electrolyser, powered by electricity generated from renewable sources.
Statera hopes that the project will take advantage of the abundant wind power generated in Scotland, which, due to constraints on the network, must sometimes be switched off to prevent the system being overloaded. Its location close to the River Don in Aberdeenshire will also mean there is a plentiful supply of water, the company said.
The previous government had set a target of 10 gigawatts of hydrogen production by the end of the decade. Labour has said hydrogen will play an “important role” in efforts to decarbonise the energy system.
The idea is that the hydrogen would connect into the transmission system via existing pipelines, which National Gas, the owner and operator of the system, is looking to partially repurpose to carry hydrogen. It is hoped that the project will supply customers on the Grangemouth industrial site and in the Teesside industrial cluster.
“The intent is that we would ultimately supply hydrogen to that type of network. Until then, we see blending [hydrogen with other gases] as a viable option, as a stepping stone to get projects such as Kintore off the ground and operating in the UK,” Tom Vernon, Statera’s founder and chief executive, said.
The project is expected to create up to 3,500 jobs during construction and up to 200 jobs on-site once operational.
Statera has said it will be ready to take a final investment decision on the project by 2026 but going ahead will depend on securing government support. It took part in the second annual auction round for green hydrogen projects, the results of which have yet to be announced, and would also participate in the third round if it is not successful, Vernon said.
Eleven green hydrogen projects, with a combined capacity of only 125 megawatts, were awarded contracts last year that guarantee a certain price for their product over 15 years, at an average agreed price of £241 per megawatt hour. The price of European natural gas is about €38.7 per therm.
“We see a pathway through to a much lower price than that,” Vernon said, referring to the first auction round. “With scale, we think Kintore really has the potential to be much lower than that with very low cost, surplus renewable power, economies of scale, and water production [nearby].”