£12bn for offshore wind and £1bn for hydrogen: Flurry of low-carbon tech investments for UK
Ørsted has revealed plans to spend £12bn with Scottish firms on offshore wind, in the same week that Ineos confirmed a £1bn hydrogen investment and the UK Government opened a new fund to help high-carbon businesses to decarbonise.
Ørsted’s proposals are contained in bids submitted to The Crown Estate Scotland through the ScotWind offshore wind leasing round. The Danish multinational firm has entered bids for five projects which, if approved, would collectively have a capacity of around 8.5GW. The UK Government is notably targeting 40GW of offshore wind capacity by 2030, with the Scottish Government promising to host at least 11GW of this total.
Three of the five projects are being solely overseen by Ørsted, with proposals for a mix of floating and fixed turbines. The other two are joint bids for projects solely using floating turbines, with BlueFloat Energy and Falck Renewables acting as partners. Floating turbine technologies enable wind farms to be installed in deeper waters, where winds tend to be stronger.
Energy generated at the proposed projects, Ørsted has stated, could be used to generate green hydrogen as well as being provided as electricity. The UK’s recently-published Hydrogen Strategy targets £4bn of private investment in blue and green generation, storage and usage this decade.
“Scotland undoubtedly has some of the best offshore wind resources in the world,” said Ørsted’s head of region for the UK, Duncan Clark.
“TheScotWind leasing round is a pivotal moment for the development of the offshore wind sector in Scotland, capitalising on its superb offshore wind potential and world-leading offshore engineering and contracting capabilities, unlocking investment that will create jobs and opportunities for Scottish businesses for generations.”
In related news, energy and chemicals giant Ineos has confirmed that it will invest a further £1bn in initiatives to decarbonise its largest industrial facility in Grangemouth, near Falkirk, with the primary focus being on hydrogen. The company had already pledged to reduce emissions at the site by 60% by 2030, before bringing them to net-zero by 2045, and earmarked £500m to achieve this.
The new £1bn pot will enable hydrogen to be produced at the site, and for all businesses there to use hydrogen within their processes. It will also be used to fund the development of a commercial-scale carbon capture array. In essence, Ineos is striving to create a blue hydrogen system at the site. The firm has not yet revealed the planned capacity.
Also set to benefit from the fresh funding are electric versions of key pieces of heavy equipment and improved energy efficiency measures including energy optimisation software. Additionally, Ineos has stated that it will scale up investment in sourcing post-consumer-recycled content for use in the plastics production at Grangemouth.
Ineos UK’s chief executive Stuart Collings said: “Our challenge is to deliver a roadmap which ensures a just transition to net-zero. This can only be achieved if we remain globally competitive and we stay ahead of evolving regulations and legislation. Hydrogen will play a very important role in the decarbonisation of our manufacturing plants.”
Ineos’ overarching climate commitment is to net-zero by 2050. Interim targets for reducing emissions across the business through to 2030 are due to be published in the coming months. Green groups including ClientEarth have been urging the business to provide more detail as soon as possible, given its past record of environmental controversies.
Government funding boost
The announcements from Ørsted and Ineos come in the same week that the UK Government has opened bids for a share of a £220m funding pot, designed to help high-carbon industries improve energy efficiency and transition to lower-carbon energy.
The funding is overseen by the Department for Business, Energy and Industrial Strategy (BEIS) as part of its Industrial Energy Transformation Fund. It will support businesses to invest in things like energy efficiency technologies, electric heat pumps, alternative fuels, carbon capture arrays and systems that capture waste heat, ready for reuse. Eligible sectors include steel and other building materials, pharmaceuticals, food and drink manufacturing and paper manufacturing.
Each business will be able to receive a grant of up to £30m from this new round of funding, which builds on the £69m which has already been issued through the first round of the Industrial Energy Transformation Fund. Applications will formally open on Monday (27 September) and close on 6 December.
The funding comes after the Government published an updated Industrial Strategy in March. The update was conducted to better align the policy package with the UK’s 2050 net-zero target.