Scotland is on track to establish Europe’s largest green hydrogen initiative, aimed at providing a sustainable fuel alternative for heavy industries and addressing energy supply challenges in the Scotland-England corridor.

A planning proposal has been submitted by Statera Energy, a UK-based expert in battery storage and flexible energy solutions, for the Kintore Hydrogen project located in Aberdeenshire.

Statera plans to invest £600 million to generate 500 megawatts of capacity by 2028, with ambitions to expand this to 3 gigawatts by 2030.

Hydrogen is a non-polluting fuel, releasing no carbon dioxide upon combustion. The cleanest hydrogen variant, known as green hydrogen, is produced through electrolysis, which separates water into hydrogen and oxygen using renewable energy sources.

The project aims to leverage Scotland’s abundant wind energy, which is sometimes curtailed due to grid constraints. Additionally, its proximity to the River Don ensures a reliable water source for production, according to Statera.

Previous governmental targets had aimed for 10 gigawatts of hydrogen production by the end of the decade, with the Labour party stating that hydrogen will be crucial for the decarbonization of the energy system.

The hydrogen produced is intended to integrate with the existing natural gas transmission system, which National Gas is planning to modify for hydrogen delivery. This initiative is expected to serve clients within the Grangemouth industrial site and the Teesside industrial cluster.

“Our goal is to ultimately provide hydrogen to that network. In the interim, we view blending hydrogen with other gases as a practical approach to initiate projects like Kintore in the UK,” commented Tom Vernon, Statera’s founder and CEO.

During the construction phase, the initiative is anticipated to generate up to 3,500 jobs and around 200 permanent positions once operational.

Statera aims to reach a final investment decision by 2026, contingent upon securing governmental backing. The company participated in the second annual auction for green hydrogen projects, with results yet to be disclosed, and plans to enter the third round if necessary.

Last year, eleven green hydrogen initiatives received contracts totaling a mere 125 megawatts, guaranteeing fixed prices for fifteen years, averaging £241 per megawatt hour. In comparison, European natural gas prices stand around €38.7 per therm.

“We foresee a pathway to significantly lower costs,” said Vernon regarding the initial auction round. “With larger scale production, Kintore has the potential to achieve lower pricing due to abundant renewable energy, economies of scale, and local water supply.”