Plans announced for £750m Cheshire hydrogen production scheme

A £750m hydrogen production plant is to be built on the banks of the River Mersey.Essar, which operates the Stanlow oil refinery, and Progressive Energy, developers of HyNet North West, an industrial decarbonisation cluster, have joined forces to set up a venture to produce low carbon hydrogen at the Ellesmere Port refinery.The joint venture will manufacture hydrogen for use across the HyNet region and is expected to create hundreds of construction jobs, followed by thousands more across the region once the network is completed.It will provide Essar Oil UK with low carbon hydrogen to decarbonise its own energy demand in addition to creating a hydrogen economy across North West England and North East Wales.Natural gas, and fuel gases from the refinery will be converted into low carbon hydrogen, with carbon dioxide safely captured and stored offshore in sub-surface reservoirs in Liverpool Bay.The hydrogen production hub will deliver clean energy to industry in the HyNet ‘low carbon cluster’, as well as to fuel buses, trains and heavy goods vehicles, to heat homes, and to generate electricity when the sun is not shining or the wind blowing.The UK’s first low carbon hydrogen hub will initially produce three terawatt-hours (TWh) of low carbon hydrogen each year from 2025. This will be quickly followed by a facility twice this size giving a total capacity of over nine TWh of hydrogen per annum, equivalent to the energy used for heating across the whole of Liverpool.A total investment of approximately £750m will be committed to deliver the two hydrogen production hubs. Follow-on capacity growth is planned to reach 80% of the Government’s new target of 5GW of low carbon hydrogen for power, transport, industry and homes by 20301.Today’s agreement between Essar and Progressive Energy provides the basis to take the project through final development and into construction and operation. The project will be jointly delivered by the two companies.Progressive Energy originated the HyNet North West decarbonisation cluster, and Essar’s downstream energy activities in the area provide a natural structure for delivery.