REG - EnergyPathways PLC - Collaboration with Government on Hydrogen Storage

EnergypathwaysAnnouncement

21/10/2024 07:00

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RNS Number : 8870I  EnergyPathways PLC  21 October 2024

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                                        Tel: +44 (0)207 466 5000, c/o Buchanan (Financial PR)

Ben Clube / Ben Hodges

                                                     Email : info@energypathways.uk

 Cairn Financial Advisers LLP (Nominated Adviser)      Tel: +44 (0)20 7213 0880
 Jo Turner / Louise O'Driscoll / Sandy Jamieson
 SP Angel Corporate Finance LLP (Broker)               Tel: +44 (0)20 3470 0470

 Richard Hail / Adam Cowl
 Global Investment Strategy UK Limited (Joint Broker)  Tel: +44 (0)20 7048 9000
 Callum Hill / James Sheehan
 Buchanan (Financial PR)                               Tel: +44 (0)207 466 5000
 Ben Romney / Barry Archer
Email: energy@buchanan.uk.com (mailto:energy@buchanan.uk.com)

 

 

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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.

 

 

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