Offshore Wind Power Limited (OWPL), the consortium formed by Macquarie’s Green Investment Group, TotalEnergies and Renewable Infrastructure Development Group, has revealed that it is exploring opportunities for the production of green hydrogen on the island of Flotta in Orkney, Scotland, powered by offshore wind. OWPL reports that it is exploring a possible partnership with Repsol Sinopec, the Flotta Terminal owner, and Uniper, a leading international energy company and pioneer in the field of hydrogen, to bring the project to fruition.
This is an exciting prospect for the Flotta Oil Terminal and the wider Orkney economy, particularly following the announcement by Resol Sinopec in July that jobs were at risk at the terminal as a result of “operational changes”. The new plans promise to deliver:
- New employment opportunities for existing workers;
- Significant inward investment;
- 25+ years of operation; and
- A maritime low carbon refuelling port.
However, whilst the dominant message conveyed by the partner statements at this stage is that the project will deliver ‘true’ green hydrogen (i.e. through electrolysis powered by purely renewable energy), there are some hints that the project will not entirely replace the existing oil and gas operations. In his statement, José Luis Muñoz, Chief Executive Officer of Repsol Sinopec, commented:
“This project would enable the terminal to be progressively transformed over time into a diversified energy hub where conventional oil and gas operations continue, co-existing alongside the development of a sustainable long-term green future for the facility.”
Accordingly, it remains to be seen whether the project will follow through on its commitment to produce entirely green hydrogen or if a proportion of the output will be allocated to blue hydrogen (presumably combined with carbon capture), at least in the short to mid-term.
In any case, this project is evidence of the fact that numerous opportunities exist in the growth of green hydrogen in the UK and beyond. In our recent article, we discuss the role of green hydrogen in the UK energy market and the challenges faced in making the transition from blue to green hydrogen production. As always, when new technologies emerge, particularly when we see sectors converging (as is the case here and will be the case for a number of green hydrogen projects), getting the right advice is critically important for the purpose of mitigating risk.
Burges Salmon’s multi-disciplinary team of specialist lawyers is already advising on a number of hydrogen projects and speaking to renewable energy developers on plans to implement green hydrogen, both in the UK and overseas. We are members of Renewable UK’s Hydrogen Working Group and sit on the Executive of the UK Hydrogen and Fuel Cell Association which lobbies and monitors hydrogen developments and assesses new regulation.