SSE Thermal has acquired a 50% stake in the H2NorthEast blue hydrogen scheme in the UK.
The agreement, with Aberdeen-headquartered infrastructure firm Kellas Midstream, will see the two firms jointly develop the Teesside project, which could deliver 355 megawatts of blue hydrogen from 2028.
It aims to scale up from that first phase to more than 1GW, with offtakers including heavy industry and power generation, either blending hydrogen into their existing assets or utilising it in new hydrogen-fired power plants.
H2NorthEast is expected to be linked to the wider East Coast Cluster, a carbon capture and storage (CCS) development aimed at storing 23 million tonnes of CO2 per year from industrial emitters in the Humber and Teesside.
The blue hydrogen scheme will be developed on land adjacent to Kellas’ CATS terminal in Teesside.
SSE Thermal said the deal was for an initial consideration of less than £10m to Kellas Midstream, with further payments should the project reach an investment decision.
Nathan Morgan, CEO of Kellas Midstream, said: “We are delighted to establish a joint venture with SSE which will allow us to leverage both organisations’ industry-leading positions in energy infrastructure and flexible energy generation to realise our shared commitment to go beyond ambition and make low carbon hydrogen production a reality for the UK.
“SSE’s entry into H2NorthEast is further testament to the quality of this world-class project and the significant role it can play in the UK’s net zero journey.”
Blue hydrogen is derived from natural gas, with associated emissions captured via CCUS – in this case, stored via pipeline in depleted gas fields of the Southern North Sea.
It is seen as a key means of decarbonising heavy industry, though wider applications – such as use in homes for heating – are seen as less likely to take off.
© Supplied by BPThe UK Government aims to have 10GW of low-carbon hydrogen production by 2030, of which up to 5GW could be blue hydrogen.
Catherine Raw, managing director of SSE Thermal and group executive committee lead for hydrogen, said: “Blue hydrogen has a strategic role to play alongside green hydrogen and the hydrogen produced by H2NorthEast will not only support the decarbonisation of industry, it can be a vital piece in the net zero jigsaw for the power sector.
“As a company focused on decarbonising power generation using low-carbon technologies, we know how crucial it is for hydrogen production to be scaled up this decade. H2NorthEast will help to deliver production at significant scale while also serving as a key enabler of green hydrogen, benefiting the UK’s net zero ambitions and creating an engine room for industrial growth.
“We have gained significant experience in developing projects including hydrogen and carbon capture through other projects in our portfolio and look forward to bringing that expertise to H2NorthEast and working with our new partners at Kellas Midstream.”
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