Hydrogen production hub deal agreed in ‘exciting milestone for Aberdeen and its people’

Construction of a multi-million-pound green hydrogen production facility in Aberdeen could finally begin by the end of the year.

The city council and BP have given the green light to the Aberdeen hydrogen hub.

Bosses on the project have taken more than a year longer than planned to take this final investment decision.

Worries quashed with final investment decision – finally – on the Aberdeen hydrogen hub

The P&J understands this first of three possible phases of development will cost around £40 million.

A £215m price tag has been put on the entire, scalable, Aberdeen hydrogen hub which could increase production in step with demand.

As a joint venture, the local authority and BP agreed in 2022 to build the plant to produce, store and distribute around 300 tonnes of the fuel a year at a site in Harness Road.

The project is viewed as a key part of the north-east’s shift towards the renewable and low carbon energy industry, as part of the transition away from oil and gas.

BP Aberdeen Hydrogen Energy Limited, the joint venture, will produce green hydrogen at the Hareness Road site, powered by electricity generated at a solar farm planned for the former Ness landfill.

Delays in approving the project have knocked back hopes of turning on production in 2025, with the target now the following year.

Prolonged “due diligence” prompted concern for the future of the Aberdeen hydrogen hub project – funded by both the UK and Scottish governments – as recently as February.

But project bosses are now optimistic construction can begin by the end of 2024.

‘An exciting milestone for the people of Aberdeen’

BP Aberdeen Hydrogen Energy Limited chief executive Oliver Taylor said: “This is an exciting milestone for the project, Aberdeen, and its people.

“Not only does the hydrogen hub support BP and Aberdeen City Council’s shared ambition for the city’s future, it also presents a growth opportunity for the region’s supply chain and skills development.”

Being built with scaling up in mind, the 300 tonnes of green hydrogen the facility is planned to produce in its infancy will be enough to fuel 25 buses and a similar number of other fleet vehicles every day.

If Aberdeen City Council and BP do expand the facility, it could eventually produce enough green hydrogen to power rail, freight and marine vehicles, using energy from larger-scale renewable sources like offshore wind.

It could also provide hydrogen for heat and for export.

Exporting the key to hundreds of skilled hydrogen jobs

And, according to a study commissioned by Aberdeen City Council, it is exporting that will prove key in establishing hydrogen as a key sector of the economy.

The research claimed there could be up to 700 skilled jobs across the hydrogen industry by the end of the decade, if the Aberdeen hydrogen hub is scaled up to produce the fuel for export.

However, since the forecast of that jobs boom by 2030, the council and BP have taken an extra year to reach the agreement announced today.

When the joint venture was announced by councillors and BP’s senior vice president for Europe, Louise Kingham, in March 2022, their press release set out expectations that the final investment design would be agreed in early 2023.

Aberdeen City Council approved their end of the business case at the end of October.

Even at that time, Town House sources said they expected a final investment decision to have been approved by “the end of the year”.

Aberdeen praised for hydrogen ‘leadership’

Today, Ms Kingham said: “Aberdeen City Council deserves a huge amount of credit for showing leadership as they progress their plans to deliver lower carbon energy solutions and, for BP, this is further evidence of how we are backing Britain by investing in support of today’s energy needs and those of tomorrow.”

With a keen interest in hydrogen for the last decade, Aberdeen City Council has loudly been trying to stimulate demand for green hydrogen.

Dozens of hydrogen buses, vans and bin lorries are used on city streets every day as part of the city’s effort to adopt the low carbon technology.

The local authority’s £400m P&J Live and Teca complex is also hydrogen-fuelled.

Aberdeen City Council co-leader Ian Yuill added: “This investment by the council and BP is an important step towards the delivery of the Aberdeen Hydrogen Hub project.

“Aberdeen has been a leader among cities in bringing hydrogen to market for public transport and council fleet vehicles.

“This project is central to our vision to increase the supply and demand for hydrogen as a fuel in support of the city’s net zero vision.”