Ofgem CEO: Burgeoning hydrogen and CCS industry in Teesside and Humber to yield tens of thousands of jobs

Tens of thousands of new-generation clean jobs need to be created to support burgeoning hydrogen production and the carbon capture and storage (CCS) industry in the UK’s Teesside and Humberside regions, according to Jonathan Brearley, CEO of UK energy market regulator Ofgem.

Following visits to CCS Teesside and Humberside regions on January 16, Brearley said decarbonizing heavy industry, like steel, cement and refineries, hydrogen production and power plants needed a new generation of clean jobs.

On January 17, he met Tees Valley Mayor Lord Houchen to discuss in further detail how the region’s carbon capture and low-carbon energy industry, including offshore wind, is set to create thousands of good-quality jobs for local people, as well as adding £1 billion per year to the economy over 25 years.

“It’s inspiring to see such ambitious, innovative projects taking shape in Humberside and Teesside, which will help to create thousands of jobs and are critical to achieving the government’s target of decarbonise the power system by 2035, and reach net zero by 2050.

“The gas crisis, as much as the climate crisis, has shown the need for building our energy security from volatile international gas markets. Our role at Ofgem is to unlock investment and accelerate signing off infrastructure and facilities to ensure everyone can benefit from a net zero system as quickly as possible, at the lowest cost to consumers to protect businesses and households.

“These carbon capture and low-carbon projects will play a key role in delivering this cheaper, more secure and cleaner energy system for the country, and these apprenticeships and trainees will be going into the wide range of new, highly-skilled jobs needed to realise the net zero energy transition,” Brearley said.

During his visit, Brearley met the team behind the Viking CCS scheme, a carbon capture and storage project in the southern North Sea. He also toured several other carbon capture and low-carbon energy projects currently under construction in the East Coast Cluster, including a hydrogen plant.

Brearley also visited CATCH, an engineering and industrial training facility in Humberside, and Teesworks Skills Academy, which links jobseekers, local employment hubs, and skills providers across the Tees Valley. At both training facilities, Brearley met apprentices and learned about the specialist skills they are being equipped with to access the 20,000 new jobs expected to be created by the two regions’ carbon capture and low-carbon energy projects.

The UK government has set targets to achieve 20-30 mtpa of carbon storage and four operational CCUS clusters by 2030, which will support the delivery of 50,000 jobs in the industry.

The Viking CCS project, previously known as V Net Zero, in the Humber region is said to have the potential to meet one-third of the UK government’s CCS target. According to the Viking CCS project operator, Harbour Energy, the delivery of the project could be transformational for the region, potentially unlocking up to £7 billion of investment across the full CO2 capture, transport, and storage value chain over the next decade. As per agreement from April 2023, Harbour owns a 60% interest in the project while energy giant BP owns a 40% non-operated share.

The Viking CCS project has access to a planned new CO2 shipping terminal at Associated British Ports’ Port of Immingham, with the potential for shipped CO2 from dispersed emitters elsewhere in the UK and internationally to be transported for permanent storage within the Viking fields

At the end of 2023, Harbour Energy, BP, and Associated British Ports (ABP) entered into an exclusive commercial agreement with Cory Group for the transportation and storage of CO2 by ship. The alliance will focus on the transport and storage of shipped CO2 emissions originating from Cory’s energy-from-waste (EfW) facilities.

A final investment decision for the Viking CCS project is expected in 2024 and the project could be operational as early as 2027, potentially storing up to 10 million tonnes of CO₂ per year by 2030.  

In addition to taking part in CCS projects, BP is leading two hydrogen developments in Teesside – H2Teesside and HyGreen Teesside.

According to BP, H2Teesside aims to be one of the biggest blue hydrogen production facilities in the UK, delivering approximately 160,000 tonnes of low-carbon hydrogen per annum. The company is currently running a second consultation on proposals for the project until January 23, 2024.

BP also committed to invest in green skills by launching a dedicated education skills program for H2Teesside. The program will aim to reach more than 5,000 people to help inspire the next generation of talent, ensuring local people benefit from near-term job opportunities and advancing social mobility.

HyGreen Teesside project is targeting 80 MWe of green hydrogen capacity by 2025 – and targeting growth to 500 MW by 2030, delivering up to 5% of the UK government’s hydrogen target of 10GW by 2030.

In Humber, another energy giant Equinor is developing Hydrogen to Humber Saltend (H2H Saltend), a 600 MW low-carbon hydrogen production plant with carbon capture. This project is scheduled to be operational by 2027.

At the same time, H2H Saltend is the kick-starter project for the wider Zero Carbon Humber scheme, which will provide regional infrastructure from Easington to Drax. The infrastructure will transport hydrogen to industrial customers seeking to reduce their emissions whilst also capturing CO2 for safe subsea storage as part of the East Coast Cluster.

The project also forms part of Equinor’s wider ‘Hydrogen to Humber’ ambition to deliver 1.8 GW of low-carbon hydrogen production within the region, nearly 20% of the UK’s national target.