SSE's Keadby 2 plant will be partially supplied with hydrogen fuel under the deal. Photograph: SSE SSE's Keadby 2 plant will be partially supplied with hydrogen fuel under the deal. Photograph: SSE

Two 'first-of-a-kind' CCS and hydrogen power stations planned

SSE Thermal and Equinor have announced that they are to work together to develop two new ‘first-of-a-kind’ power stations, one fed with natural gas with carbon capture, and the other fed entirely on hydrogen.

The firms announced the projects today, both set to be built in the Humber region, earmarked by the government as a centre for decarbonised industry. “The projects have the potential to create thousands of skilled, green jobs and revitalise a key industrial heartland,” they said in a joint statement.

The two plants, expected to be built near Scunthorpe in Lincolnshire, would take the place of older, carbon-intensive generation and provide the kind of flexibility needed to maintain security of supply amid growing reliance on intermittent renewables, the firms said.

The 900-megawatt Keadby 3 plant would be fuelled with natural gas and fitted with carbon capture technology, its emissions piped away for storage under the southern North Sea. An application for a development consent order is expected this spring. Assuming all goes to plan, it could come online in 2027, in line with the government’s ambitions for low-carbon industrial clusters.

Keadby Hydrogen would have the same generation capacity, corresponding to a peak demand of 1,800MW of hydrogen production. “It would be the world’s first major 100% hydrogen-fired power station, securing at-scale demand for hydrogen in the region for decades to come,” the firms said. It could be operational by the end of the decade, they added.

But final investment decisions for both depend on the right policy frameworks being in place, the firms said.

Stephen Wheeler, managing director of SSE Thermal, said the projects, “would play a major role in decarbonising the UK’s flexible generation capacity, while supporting a green economic recovery in the Humber”.

“By utilising cutting-edge carbon capture and hydrogen solutions, we can decarbonise power generation, heavy industry and hard-to-reach sectors of the economy, which will be essential in both achieving net zero emissions and ensuring a just transition for workers and communities. With over 12 million tonnes of annual carbon emissions, ideal transport and storage options, and major energy and industrial companies working together, the Humber has to be at the centre of the UK’s decarbonisation strategy,” he added.

The deal comes amid a flurry of investment in hydrogen technology, including a gigawatt-scale system that BP announced last month, closely connected to a series of industrial decarbonisation projects backed by the government.

The SSE-Equinor projects alone would make a significant contribution towards reaching the government’s ambitions for both carbon capture, usage and storage and hydrogen. Keadby 3 would capture 1.5m tonnes of CO2 per year, against the target of 10mt by 2030, while demand from Keadby Hydrogen would match a third of the 5GW hydrogen production goal.

The two would use the hydrogen and CO2 pipelines being developed by the Zero Carbon Humber partnership, which involves the two firms, and the Northern Endurance Partnership, which includes Equinor. The two initiatives received a total of £73m government funding in March.

A further part of the deal is to “progressively decarbonise” SSE Thermal’s 840MW Keadby 2 natural gas plant by blending hydrogen into its fuel. It is currently under construction. Further such projects could follow, the firms say.

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