21 October 2024
EnergyPathways
plc
("EnergyPathways" or the
"Company")
Collaboration with Government
on Hydrogen Storage
EnergyPathways plc (AIM: EPP), an
energy transition company developing low carbon integrated energy
solutions in the UK, is pleased to advise that Department of Energy
Security and Net Zero (DESNZ) has invited EnergyPathways to
participate in the Hydrogen Storage Business Model (HSBM) Design Group. This group comprises a
select number of companies, including several Tier-One companies
that are at the forefront of the UK's energy transition.
The HSBM, when finalised following
consultation with the Design Group, will define DESNZ's
new investment support scheme to promote the development of hydrogen storage
projects.
EnergyPathways expects the
first DESNZ Hydrogen Storage Allocation Round to
be launched during 2025 and intends to
submit an application for its large-scale MESH natural gas and
green hydrogen storage project.
Hydrogen Storage in the UK
In order to achieve the UK's
ambitions of up to 10 GW of low carbon hydrogen production capacity
by 2030, a significant build-out of hydrogen storage and transport
infrastructure will be needed.
Hydrogen storage at scale will be
important in the UK's future energy system in order to harness renewable power
that would otherwise be wasted. Excess
electricity generation from renewable sources, arising
due to network constraints or low demand,
is already a challenge for the UK, with wind
generators being paid to turn-down or curtail. The UK's annual
constraint costs are expected to rise from around £2bn per year to
around £8bn per year by 2030.
The initial focus of government
support in the first Hydrogen Storage
Allocation Round is expected to be on
scalable geological storage for green hydrogen. The National Grid Energy System Operator suggests that up to 2
TWh of geological storage could be required by 2030 and that
somewhere between 11 and 56 TWh of storage could be required by
2050. Locating electrolysers and hydrogen storage behind network
constraints is seen as the best means to utilise these otherwise
wasted constraint costs.
Government guidance indicates that
projects will be prioritised that can unlock whole of energy system
benefits, enable decarbonisation at pace and advance the
development of a hydrogen market. Projects that are expected to be
ranked highly will:
·
connect hydrogen producers with consumers and
balance misalignments in energy supply and demand;
·
enable low carbon-fuelled flexible power
generation to complement intermittent renewable
generation;
·
provide at pace decarbonisation pathways for unabated gas generation and gas
use;
·
be capable of repurposing natural gas
infrastructure and reducing decommissiong costs; and
·
connect new hydrogen production to new demand
centres.
DESNZ has indicated that it plans to
complete the design of the HSBM in 2025 and aims to announce the
launch of the first Hydrogen Storage Allocation Round during 2025.
Through this process, a shortlist of projects will to be taken to
due diligence and negotiations stage, with successful projects
announced after approximately 12 months, subject to administrative
and legislative arrangements including licensing.
About MESH
EnergyPathways plans to participate
in the first Hydrogen Storage Allocation Round proposing an
expansion of its MESH project.
The MESH natural gas and green
hydrogen storage facility, located off the UK's Lancashire coast,
will be initially equivalent in size to the Rough facility,
currently the UK's largest gas storage facility. It will have a
storage capacity of ~15TWh (~500 million therms or ~50 billion
cubic feet of gas). EnergyPathways has further identified growth
upside and plans to expand the MESH storage capacity by as much as
three times, including developing upscaled green hydrogen storage
with potential capacity of ~1.5TWh.
MESH is ideally positioned to play a
leading role in the development of the hydrogen sector and to
provide a total energy system solution for the UK, bringing
attendant economic benefits to the North West of England through
increasing supply chain activity, jobs and investment.
The MESH project is uniquely located
for green hydrogen storage and transportation. By being located
close to 7-8 GW of regional planned and existing wind power, it
will be able to harness curtailed wind energy at scale behind
network constraints, with green hydrogen production and storage. It
can also readily connect new green hydrogen supply to the nearby
emerging hydrogen markets being developed with the HyNet NorthWest
project, the UK's leading 'blue' hydrogen hub and Carbon Capture
and Storage (CCS) project. MESH is also ideally positioned to
decarbonise at pace the UK's natural gas supply by integrating and
repurposing existing gas infrastructure to transport new green
hydrogen production to energy markets and play a leading role in
decarbonising gas power generation and UK gas supply with hydrogen
blended natural gas, which is an initial means of decarbonising
flexible gas power generation and gas use.
EnergyPathways is forming a
stakeholder partner group for the MESH integrated energy project
comprising several global leading Tier-One engineering and energy
companies. It plans to complete pre-FEED by the end of 2024 and FID
at the end of 2025.
Commenting on the update, Ben Clube, CEO of EnergyPathways,
said:
"We are very pleased to have been invited to participate in
the DESNZ Hydrogen Storage Business Model Design Group - an honour,
given the select group involved including Tier-One
companies.
"Through its involvement in the
Group, EnergyPathways will have an opportunity to contribute to the
shape of the final commercial and regulatory design of the Hydrogen
Storage Business Model that will be used in the First Hydrogen
Storage Allocation Round to be launched in 2025.
"Our invitation results from our progressive engagement with
the relevant authorities and shows the collaborative approach
required between government and industry to enable the UK to
achieve its objectives with regards to an effective Net Zero and
energy security agenda.
"We believe EnergyPathways' MESH project is fully aligned with
the UK government's strategic objectives for hydrogen storage and
transporation and has a number of competitive advantages to warrant
Government support under the HSBM.
"We look forward to making a material contribution to the UK's
energy transition objectives and working with all our stakeholders
to deliver mutually beneficial outcomes."
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014 (which forms part of
domestic UK law pursuant to the European Union
(Withdrawal) Act 2018).
Enquiries:
|
|
EnergyPathways
Ben Clube / Ben Hodges
|
Tel: +44 (0)207 466 5000, c/o
Buchanan (Financial PR)
Email :
info@energypathways.uk
|
Cairn Financial Advisers LLP (Nominated
Adviser) Jo Turner / Louise
O'Driscoll / Sandy Jamieson
|
Tel: +44 (0)20 7213 0880
|
SP
Angel Corporate Finance LLP (Broker)
Richard Hail / Adam
Cowl
|
Tel: +44 (0)20 3470 0470
|
Global Investment Strategy UK Limited (Joint
Broker) Callum Hill / James
Sheehan
|
Tel: +44 (0)20 7048 9000
|
Buchanan (Financial PR) Ben
Romney / Barry Archer
|
Tel: +44 (0)207 466 5000
Email: energy@buchanan.uk.com
|
EnergyPathways Investor Website
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|
energypathways.uk
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@energy_pathways
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Forward Looking Statements
This announcement contains
forward-looking statements relating to expected or anticipated
future events and anticipated results that are forward-looking in
nature and, as a result, are subject to certain risks and
uncertainties, such as general economic, market and business
conditions, competition for qualified staff, the regulatory process
and actions, technical issues, new legislation, uncertainties
resulting from potential delays or changes in plans, uncertainties
resulting from working in a new political jurisdiction,
uncertainties regarding the results of exploration, uncertainties
regarding the timing and granting of prospecting rights,
uncertainties regarding the timing and granting of regulatory and
other third party consents and approvals, uncertainties regarding
the Company's or any third party's ability to execute and implement
future plans, and the occurrence of unexpected
events.
Actual results achieved may vary
from the information provided herein as a result of numerous known
and unknown risks and uncertainties and other factors.