Hopes for 700 jobs and investment of hundreds of millions of pounds in Aberdeen have been boosted as the city looks to carve out a new post-oil future in hydrogen production.
BP has been named as the council’s preferred bidder and commercial partner to build Scotland’s first scalable green hydrogen production plant in the Granite City.
And the “scalable” aspect of the project could prove vital in the 10 years to come, as city leaders hope to build a new global industry, exporting surplus hydrogen and expertise across the world.
There are hopes the “world class” operation could be up and running by 2024, bringing 700 jobs to Aberdeen by 2030 when it is fully up-and-running.
Renewably-generated electricity, from offshore wind turbines and perhaps solar panels, will be converted to green hydrogen at the plant – going on to fuel buses, vans, lorries, boats and trains in the future.
Aberdeen hydrogen production: Final decision – and how to fund it – still years away
As yet, there is no site identified for the venture – which is expected to cost £215 million to set up and run over 10 years.
A final decision on future investment is scheduled to be taken in 2023, with the local authority already committing £19.4m to the project.
By then, council bosses will hope to have convinced governments to put money in as well, to make it easier to win investment from private firms – as was achieved through the Aberdeen City Region Deal.
Aberdeen has played the long game on hydrogen and is now looking to cash in on global interest
The local authority has been eyeing up hydrogen opportunities for more than a decade, paying big money for H-fuelled buses to prove the technology can work.
Currently, there are 25 zero-emission buses and 60 public sector vehicles and bin lorries on Granite City roads, as well as the tech being built into the replacement AECC at P&J Live.
Council leader Jenny Laing said: “We have been working to create demand as at the end of the day it’s the chicken and egg; is it build demand and then supply or does the supply come first?
“What we need to do is reduce the cost involved to make it more commercially advantageous to use hydrogen over fuels.
“That is what this is really about, bringing prices down.
“We saw it from the bus project from the very high costs of the first vehicles, the price reduced as more were rolled out.
“Ultimately, export is the big prize we are looking at – can we scale up to a degree where we can export to other parts of the UK and the world?”
The Aberdeen Labour leader admitted: “We are under no illusions: we need to continue to showcase what we want to do in Aberdeen, but while everyone in the world seems to be talking about hydrogen Aberdeen is actually delivering.
“I hope that difference will keep us at the forefront of this and leveraging investment.”
Hopes for 700 jobs at Aberdeen hydrogen production facility
Aberdeen’s hydrogen production will be ramped in three phases – firstly aimed at just making enough to fuel the city’s own public transport and municipal fleet by 2024.
Once that target has been met – and proven it can be maintained, dependably and sustainably – the focus will shift to producing more hydrogen with a view to heating homes with the green fuel.
That is something the council is already looking into, having commissioned a £100,000 feasibility study into how the new fuel could be incorporated into the city’s district heat network.
Finally, as the centre is scaled up again, Aberdeen could establish itself as a hydrogen producer on a UK, continental and global scale – but that relies on widespread adoption of the fuel beyond the city limits.
‘Absolutely logical’ that decades of oil and gas experience should be put to work in the Aberdeen hydrogen production project
Council finance convener, Conservative Ryan Houghton, said: “Aberdeen was the first mover in this area and when I was elected in 2017 I remember we had delegations from South Korea and Japan to explore how we were moving the technology forward.
“Our position is international, we want to maintain the centre of excellence in hydrogen and be in a place to export skills and expertise to the economic benefit of Aberdeen, so the city can continue to be a place people can work, raise a family and build a career here in high quality, well-paid jobs.
“We are seeing a move towards hydrogen – not just in the UK but in the Netherlands, Germany, Spain and Australia – this is a worldwide movement.
“We have a very high-skilled workforce in Aberdeen and the wider north-east and I would expect the bulk of those jobs would be for people making the transition from oil and gas.
“It absolutely logical to have people with 30 or 40 years of experience in these sectors lead it through with government support where possible.”
The partnership, and oil major BP’s interest in playing a role in it, will come as a major boost to employment in the north-east as the regional economy shifts from a reliance on oil and gas.
The oil major’s UK chief, Louise Kingham OBE, said: “BP wants to play a leading role in Scotland’s energy transition as is evidenced by this news and our transformational bid in the ScotWind offshore wind leasing round.
“These new business opportunities are underpinned by our 50-plus years of operations in the North Sea where, based out of Aberdeen, we have built up vast skills and experience that are directly transferable to emerging energy industries.
“We look forward to working with Aberdeen City Council on this exciting project and are pleased that – following the competitive and robust public procurement process – we were able to position BP as the partner of choice.”