A consortium of companies plans to develop a 700-MW low-carbon hydrogen production facility on the UK's Thames estuary, partnering with the Scottish Acorn carbon capture and storage project, the groups said in a statement Oct. 12.
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Project Cavendish aims to be operational by early 2027, capturing and storing 1.2 million mt/year of CO2.
The Acorn Project has signed a memorandum of understanding with Project Cavendish to receive CO2 shipped from the planned production site at the Isle of Grain to Peterhead Port in Scotland.
"This MOU with Acorn CCS is a key step that enables us to explore transporting the associated carbon emissions and storing them off the coast of Aberdeen," Paul Bogers, VP Hydrogen at Shell, one of the Project Cavendish partners, said.
"It is an example of how companies and regions can work together to move the UK closer to its net-zero target," Bogers said.
Hydrogen production could rise to 1.75 GW by 2030, abating 3 million mt/year of CO2.
Project Cavendish is a collaboration between Arup, VPI, National Grid Ventures, Shell, SSE Thermal and Uniper.
Peterhead Port has joined the Scottish Cluster -- an industry group seeking to decarbonize operations through the Acorn CCS facility -- signing an MOU with Acorn to support feasibility and design work for a dedicated CO2 terminal at the port by 2026.
Project Cavendish is eyeing a final investment decision by the end of 2023.
The site is close to gas and electricity networks, power stations and an LNG facility. It also aims to transport hydrogen by pipeline to London.
An investment decision on the Scottish Cluster could be taken in early 2023, with commissioning from 2025 and storage of 6.2 million mt/year of CO2 planned by 2030.
The Cluster expects to store around 23 million mt/year of CO2 from the mid-2030s, it said.
"The signing of the MOUs with Project Cavendish and the Peterhead Port Authority demonstrates how the Scottish Cluster can decarbonize not only Scottish emitters but those throughout the UK and Europe," CEO for Storegga, lead developer of the Acorn project, Nick Cooper said in the statement.
"The Acorn Project is strategically located in Aberdeenshire to make best use of legacy oil and gas infrastructure and Scotland's excellent offshore geology for CO2 storage," Cooper said.
"This, combined with access to the deepwater port of Peterhead which offers significant CO2 import capabilities, means that the Scottish Cluster is able to support the urgent decarbonization of industrial clusters across the UK, with the Cluster conservatively expected to be managing more than 60% of the UK government's overall CO2 capture and storage by 2030," he added.
Calculated costs for blue hydrogen production, produced from fossil fuels with CCS, have risen sharply on the back of strong gas prices, while costs for renewable hydrogen production via electrolysis have increased even further.
S&P Global Platts assessed the cost of blue hydrogen production by autothermal reforming in the UK at GBP4.80/kg ($6.53/kg) Oct 11 (including capex, CCS and carbon).
Renewable hydrogen production via alkaline electrolysis (including capex) was assessed at GBP13.61/kg and PEM electrolysis production was GBP16.10/kg.
However, costs are expected to come down rapidly, with expectations that low-carbon and renewable hydrogen production could be cost-competitive with unabated fossil fuel-derived production by 2030.