Getting a CCUS hub off the ground:
The evolution of Net Zero Teesside
2017 – Developing the concept
OGCI Climate Investments took over the Clean Gas Project, developed by the Energy Technologies Institute to explore the feasibility of providing abated gas power, with carbon storage in depleted reservoirs in the North Sea.
Climate Investments revised and commercialized the concept, working with member company experts. The gas-fired power plant was to be an anchor project – built to provide carbon transport and storage facilities for other industrial emitters in the region. There would be separate responsibility and business models for transport and storage infrastucture, and for carbon capture by industrial emitters.
2018 – Getting national and local support for a CCUS hub
OGCI and Climate Investments participated in a cross-industry taskforce, appointed by the UK government, to look at the costs of CCUS. The team helped to identify the value of CCUS to the UK and to get support for the hub concept, as a way of reducing costs and encouraging commercial investment. It also worked with the Teesside Collective, an informal coalition of local authorities and interest groups that had formed to support clean industrial development in the region.
2019 – Working towards effective business models
The OGCI team was asked to participate in a government taskforce to identify and recommend policy options that would create viable business models for both capture and storage. The government agreed to develop a portfolio of policies that would incentivize transport and storage, and capture in power, industry and hydrogen. It also helped to fund advance engineering design work for two hubs, including Teesside.
2020 – Creating an operating structure
OGCI Climate Investments handed over ownership of the hub to a consortium of OGCI member companies: bp (the operator), Eni, Equinor, Shell and Total. The hub was formally launched as Net Zero Teesside, with support from local authorities and involvement of the local community. In August 2020, the government announced.
NZT world’s first zero carbon industrial hub by 2030
Understanding the Net Zero Teesside hub
Location – Teesside
- Accounts for almost 6% of industrial emissions in the UK is home to five of the top 25 carbon dioxide emitters in the UK
- Close to North Sea with access to many suitable CO2 storage sites
- Concentration of industries in a compact area, so captured CO2 can be gathered and transported to an offshore site relatively easily
- Large areas of brownfield land available for redevelopment
- Access to reliable water and gas supplies and proximity to electricity grid infrastructure.
- Support from local authorities
Anchor project owners – bp, Eni, Equinor, Shell, Total
- NZT Power responsible for:
- the construction, operation and decommissioning of the gas-fired power station
- the equipment required to capture its CO2 emissions
- NZNS Storage responsible for:
- the construction, operation and decommissioning of the equipment required for the high-pressure compression of CO2 from the power station and local industries
- the onshore CO2 pipeline network
- the pipeline that will transport the CO2 to the geological storage site under the North Sea and associated infrastructure
- Gas-fired power plant
- Biomass power station
- Hydrogen production facility
- Other industries in talks
- Around 6 MtCO2/year by 2030
- Support up to 5,500 direct jobs annually by 2035 and safeguard jobs in existing carbon intensive industry
- Regenerate and revitalize Teesside with new technologies and investment, and as a leader in industrial decarbonization
Transport & storage: regulated asset models planned
Power: plan is to combine payment for low carbon generating capacity, plus a variable payment for use, in order to support flexible backup to renewables; probably using a Contract for Difference structure
Industry: plan for upfront capital support, plus industrial Contract for Difference to cover operating expenses and allow for recovery of capital spend
Hydrogen: aim to support all low carbon hydrogen production, but no consensus yet on preferred options