A group of five European oil giants – BP, Shell, Total, Eni and Equinor – have formed a new consortium with the aim of creating a zero-carbon industrial cluster in Teesside.
The project called Net Zero Teesside will seek to decarbonise industry in the area by building a carbon capture and storage (CCS) network to transport CO2 to reservoirs under the North Sea, including from a combined-cycle gas turbine plant that will provide power to local energy users.
It was previously known as the Clean Gas Project and up until now was being developed by OGCI Climate Investments – a £1 billion investment fund created by the Oil and Gas Climate Initiative (OGCI), of which the consortium partners are all members.
The group will work alongside the Tees Valley Mayor and Combined Authority to develop the cluster, which it says could be operational by the mid-2020s with the right support. It has already signed memorandums of understanding with three local industrial partners.
Net Zero Teesside managing director Andy Lane said: “Its advantageous location, advanced planning stage, the expertise of our world class project partners and government support for decarbonisation in the UK mean Net Zero Teesside is uniquely positioned to become the UK’s first decarbonised cluster.
“The formation of such a powerful partnership led by BP demonstrates the industry’s commitment to the UK government’s net zero targets. We’re hugely excited to see Teesside back at the forefront of UK industry and want the project to progress further.”
Tees Valley mayor Ben Houchen said: “Net Zero Teesside represents the next step in our ambitions for Teesside, Darlington and Hartlepool to become a pioneer in clean energy, driving almost half a billion pounds into the regional economy and boosting the wider UK by £3.2 billion.
“This world-leading industrial-scale decarbonisation project will safeguard and create 5,500 good quality, well paid jobs for local people. It will act as a beacon for new technologies and further investment as other companies are attracted to our area, while helping the UK achieve its clean energy potential.”
Equinor has also partnered with National Grid and Drax to create a zero-carbon industrial hub in the Humber region, whilst a third such cluster is being developed near Liverpool and Manchester by a consortium including Cadent, National Grid, SP Energy Networks, Electricity North West and Orsted.
In the run-up to the recent election, prime minister Boris Johnson pledged to provide up to £800 million of government funding for the creation of CCS networks.
Speaking to Utility Week yesterday as the company announced plans to cease coal generation in 2021, Drax Group chief executive Will Gardiner said he hoped to receive more visibility over how the money will be spent in the upcoming budget, adding: “My guess is over the course of the year that money will be allocated to one or more clusters.”
Gardiner said he also expects that “a lot of the regulatory framework will be in place for both the capture and also the transport and storage” by the end of 2020.