BP to develop UK’s largest hydrogen factory in Teesside

Reposted from NOT A LOT OF PEOPLE KNOW THAT

MARCH 20, 2021

By Paul Homewood

h/t Patsy Lacey

Starry eyed Rachel Millard forgets to ask how much this will cost the taxpayer:

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BP is planning to build a vast hydrogen factory in Teesside to provide energy for local industry and homes.

Its H2Teesside could be producing hydrogen from natural gas – so-called ‘blue’ hydrogen – by 2027 or earlier with a target of generating 1GW of hydrogen by 2030.

The Government wants to develop 5GW of hydrogen production by 2030 as part of its effort to cut carbon emissions.

Hydrogen does not emit carbon when burned, although making it from natural gas as opposed to via electrolysis (dubbed ‘green’ hydrogen) does produce vast amounts of carbon dioxide.

How hydrogen output could expand in the coming decades, using carbon capture utilisation and storage (CCUS):

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https://www.telegraph.co.uk/business/2021/03/18/bp-develop-uks-largest-hydrogen-factory-teesside/

I can guarantee one thing – this investment will only go ahead on the back of massive subsidies, probably via a Contracts for Difference type scheme, similar to the way offshore wind farms are subsidised.

In short, BP will be paid a guaranteed price for all the hydrogen it produces, which will probably be triple the price of natural gas. The cost of this will be passed back to energy consumers.

Based on that BEIS document I wrote about yesterday, a 1 GW plant will cost in the region of £529 million, excluding any carbon capture plant:

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The steam reforming process uses 1.355 times as much natural gas as it converts; ie the process wastes about a quarter of the energy input. When operating expenses are thrown in such a plant would lose BP in the region of £250 million a year, if its output was sold at the market price for natural gas, which is £14/MWh.

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March 21, 2021 at 04:53AM

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