Distributed hydrogen clusters in the South East Project Union - Conversion of the gas transmission

This section sets out the plan for Stage 1 of Capital Hydrogen, subject to consultation and investment through the regulatory cycle. This stage covers the time period from publication of this report to the end of 2033. Stage 1 of Capital Hydrogen focuses on two things:

1. Connecting hydrogen production to large energy users with short sections of hydrogen distribution pipeline.

2. Deploying the Project Union hydrogen backbone to connect hydrogen production, distributed hydrogen clusters and areas of future potential hydrogen demand throughout the region.

During Stage 1, in 2026, the UK government will make a decision on the use of hydrogen for heating in domestic and non-domestic buildings. A positive decision will lead to intensified planning from all groups which could be involved in the future hydrogen system. Towns throughout the South East could be converted to hydrogen from 2030. This is covered in Section 4 of this report, covering Stage 2 of Capital Hydrogen.

3.1 DISTRIBUTED HYDROGEN CLUSTERS IN THE SOUTH EAST

Definition: Distributed hydrogen clusters – regions of concentrated energy demand that could decarbonise by using low carbon hydrogen which is produced and stored locally. Short sections of distribution pipelines could be used to connect production, storage or demand of hydrogen within a cluster.

• Distributed hydrogen clusters are in development throughout the UK. Three such projects in the South East are outlined in this section, covering decarbonisation of industry and transport in the East of England and in Southampton, as shown on the map below.

• These distributed hydrogen clusters are aiming to operate independently initially, and will likely produce hydrogen needed for local demand with some small-scale storage. This production could be blue or green hydrogen, and hydrogen could be stored as a gas in pressurised containers, or chemically in hydrogen-containing compounds such as ammonia or Liquid Organic Hydrogen Compounds (LOHCs).

• Once connected to the hydrogen NTS via the Project Union hydrogen backbone, these projects could benefit from and contribute to the national hydrogen network, with hydrogen production and storage possible at larger scale, allowing greater flexibility and resilience.

3.1.1 NORWICH AND LOWESTOFT

• There is potential for hydrogen deployment around Norwich within Stage 1 of Capital Hydrogen, with up to 3.5 TWh of annual hydrogen demand from industrial and agricultural organisations in this region, and for marine transport along the nearby coastline.

• There is significant potential for an increase in renewable energy generation nearby and throughout East Anglia.

• Hydrogen East is currently exploring the potential to use this renewable generation to produce green hydrogen. The Lowestoft PowerPark site, on the east coast of England, has been identified as one of six potential focus sites for green hydrogen production in East Anglia. This site is looking to produce green hydrogen using existing and future local renewable generation plants, including both wind and solar.

• Hydrogen production at Lowestoft PowerPark could be used for local buses, port operations at the Port of Lowestoft, local council refuse collection vehicles, and for road transport hydrogen refuelling hubs in Lowestoft.

• A hydrogen gas grid blending opportunity near Yelverton offers a further ~ 350 GWh of potential hydrogen demand, allowing scale up of hydrogen production at Lowestoft and decarbonisation of gas supply to Norwich and the surrounding area.

• There is also potential for hydrogen production at Bacton to supplement hydrogen supply to industry near Norwich, either via the Project Union hydrogen backbone or via a dedicated new hydrogen pipeline between Bacton and Norwich.

• Because of these potential demand and hydrogen production opportunities, Cadent expects there is a need for short sections of hydrogen pipelines. Cadent will do further work on this in 2023, with a view to taking any pipeline plans to technical feasibility in 2025.

3.1.2 FELIXSTOWE AND HARWICH – FREEPORT EAST

3.1.3 SOUTHAMPTON

• The Felixstowe and Harwich port areas are located near Ipswich on the east coast of England, and sites are key in Freeport East’s plans for development in the area.

• Felixstowe is Britain’s largest and busiest container port, dealing with 48% of Britain’s containerised trade, and Harwich is set to become a hub for the manufacture of offshore wind turbine components based on the favourable conditions created by Freeport East.

• Decarbonising these areas using hydrogen would be a way to drive economic growth in the area.

• Hydrogen could be produced and used locally around the Freeport East area, with a target of 0.5 GW hydrogen production capacity by 2030 and 1 GW hydrogen production capacity targeted for 2035.

• This hydrogen could be a mixture of green hydrogen using North Sea offshore wind generation and pink hydrogen from nearby nuclear power plants at Sizewell.

• Scottish Power are developing a 100 MW green hydrogen production facility at the Port of Felixstowe.

• Hydrogen production and consumption at this site could be further supported by connection to a future hydrogen NTS.

• Cadent will do further work on this in 2023, with a view to taking any pipeline plans to technical feasibility in 2024.

• Southampton is home to one of the UK’s busiest ports, with around 2.6 million tonnes of CO2 emitted annually19 .

• The UK government has identified the Southampton as one of Britain’s six industrial clusters20. The Southampton Water project is looking to use hydrogen to decarbonise industry and transport in the Southampton area, in partnership with Macquarie’s Green Investment Group. This could involve a mixture of hydrogen production, storage and consumption.

• There is 4.3 TWh of potential hydrogen demand in Southampton Water’s initial phase, with the first hydrogen planned to be supplied from 203021 .

19 https://www.sgn.co.uk/news/were-exploring-potential-of-hydrogen-super-hub-port-of-southampton 20 Net Zero Strategy: Build Back Greener, BEIS, 2021 21 https://www.wsp.com/en-GB/projects/southampton-water-feasibility-study