Essar to invest 750 mn pound to build low carbon hydrogen production hub

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Essar Group in partnership with clean energy specialist Progressive Energy will invest 750 million pound to build the UK’s biggest low carbon hydrogen production hub at Stanlow refinery in Ellesmere Port, Cheshire. The investment in two plants will be part of the HyNet scheme, a project to supply low carbon hydrogen to industrial sites and homes in north-west England.

“The joint venture will manufacture hydrogen at the refinery for use across the HyNet region,” the firms said in a statement. The plants would be built next to Essar’s Stanlow refinery in north-west England. Natural gas, and fuel gases from the refinery, will be converted into low carbon hydrogen, with carbon dioxide captured and stored in depleted undersea gas fields 60 km offshore in Liverpool Bay. The refinery will be converted to burn hydrogen instead of natural gas.

“It (the project) will provide Essar Oil UK with low carbon hydrogen to decarbonise its own energy demand in addition to creating a hydrogen economy across North West England and North East Wales,” the statement said.

The first plant should open in 2025 while the second is expected in 2027.

“The hydrogen production hub will deliver clean energy to the industry in the HyNet ‘low carbon cluster’, as well as to fuel buses, trains, and heavy goods vehicles, to heat our homes, and to generate electricity when the sun is not shining or the wind blowing,” the statement said.

The UK’s first low carbon hydrogen hub will initially produce 3 terawatt-hours (TWh) of low carbon hydrogen each year from 2025. This will be quickly followed by a facility twice this size giving a total capacity of over 9TWh of hydrogen per annum, equivalent to the energy used for heating across the whole of Liverpool.

“A total investment of approximately 750 million will be committed to deliver the two hydrogen production hubs,” it said. “Follow on capacity growth is planned to reach 80 per cent of the Government’s new target of 5GW of low carbon hydrogen for power, transport, industry and homes by 2030.”

The agreement between Essar and Progressive Energy provides the basis to take the project through final development and into construction and operation. The project will be jointly delivered by the two companies.
Progressive Energy originated the HyNet North West decarbonisation cluster, and Essar’s downstream energy activities in the area provide a natural structure for delivery.

Chris Manson-Whitton, Director at Progressive Energy said: “We cannot reach net zero without decarbonising industry. Today brings a key milestone in that journey as Progressive Energy and Essar Oil UK sign a Memorandum of Understanding setting out how we will work together to deliver this exciting project at Stanlow Refinery.

“Delivering net zero requires a transformation of our energy system. HyNet offers a once-in-a-generation opportunity to create real change in energy production and consumption, creating a cleaner world for future generations. It will unlock the low carbon hydrogen economy in the North West, reducing emissions and creating and safeguarding jobs.”

Stein Ivar Bye, Chief Executive Officer, Essar Oil UK said Essar is committed to innovative growth as a means to create a positive impact to both economy and environment. “HyNet and hydrogen production is integral to Stanlow’s strategy and will set it on a journey to be the UK’s first net zero emission refinery with the ambition to avoid emissions of over 2 million tonnes of carbon dioxide to the atmosphere per year, the equivalent of taking nearly a million cars off the road,” Bye added.

Hydrogen, he said, has a central role to play in low carbon energy solution. “We are demonstrating that the industry is committed to play its part of the UK’s transformational hydrogen strategy.”

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