Quietly this afternoon, the government’s last remaining hope of achieving net zero by 2050 drained away. BP has abandoned its project to develop a ‘blue’ hydrogen plant on Teesside which was supposed to produce the gas at a rate of 1.2 GW. It is not just a defeat for net zero ambitions but for Ed Miliband personally, given that he had fought hard in cabinet to advance the project while Keir Starmer and business secretary Peter Kyle had favoured using the site for a rival data centre. The data centre is now likely to proceed – an energy-hungry project in place of a green energy one.
It is not just a defeat for net zero ambitions but for Ed Miliband personally, given that he had fought hard in cabinet to advance the project
You can build all the wind turbines and solar panels you like, but the world is never going to reach net zero unless it also deals with the process emissions from steel-making, cement and fertiliser manufacture. These are emissions produced not from the source of energy but from the chemical processes involved. They are far from minimal. Steel-making currently accounts for around 7 per cent of global emissions, cement 6 per cent and fertiliser 5 per cent. Hydrogen offers a possible route for decarbonising steel and fertiliser. Moreover, hydrogen is a potential solution for large and heavy vehicles which are not suitable for electrification. JCB has already engineered a range of hydrogen-powered diggers which can deliver the punch which electric machines would struggle to replicate. Hydrogen also offers a possible drop-in solution for replacing gas boilers in homes which are not suitable for heat pumps.
The only trouble is that almost all the world’s hydrogen production currently is produced from fossil fuels, and itself emits large quantities of carbon dioxide as a by-product. If you want to decarbonise all the above you need to use either ‘green’ hydrogen, produced via electrolysis of water, or ‘blue’ hydrogen (as at Teesside) produced using natural gas but with carbon capture and storage (CCS) to remove the carbon dioxide from the waste gases.
That is why the previous Conservative government launched a ‘hydrogen strategy’ in 2021 proposing that the country develop 5 GW of low-carbon hydrogen production capacity by 2030 – of which Teesside was supposed to be to single largest and important part. BP has not so far given a reason why it has withdrawn from the project – whether it is political or economic – but, in common with other oil companies, BP has steadily been retreating on green projects in recent months as it tries to rebuild its profitability. It has, however, said that it will proceed with another carbon capture project nearby – this one attached to a gas-fired power station. Gas backed up with CCS is just about Miliband’s only hope of achieving his dream of decarbonising the grid – although virtually no one now believes he could achieve it by 2030.
Green hydrogen, by the way, is struggling, too. Stegra, a demonstration plant in Sweden which was supposed to produce green steel with the aid of green hydrogen produced on site, had to be bailed out with a grant from the Swedish government last week after failing to raise enough capital to proceed with the project. It still needs further funding.
Someone who will be pleased with BP’s withdrawal from the blue hydrogen plant is Conservative mayor for the Tees Valley, Ben Houchen, who has also championed the AI data centre. The only trouble now is where is the energy going to come from to power that and all the other data centres which will be needed to achieve the government’s AI ambitions? Britain’s data centres are already consuming around 2.5 per cent of all energy consumed in Britain. But years of building wind and solar while decommissioning fossil fuel and nuclear power stations has given us energy infrastructure which is not capable of satisfying domestic demand for energy, even before further investment in data centres.
Even on a windy afternoon like today’s, Britain has been importing 14 per cent of its energy from the continent via subsea connectors. Britain’s hydrogen strategy may now be in tatters, but so too is our native electricity supply.
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