Green hydrogen could be central to decarbonising major parts of the UK economy. First, it is needed to decarbonise current processes that rely on natural gas-derived hydrogen, such as oil refining and the production of fertilizers. Hydrogen’s high energy density also allows it to be substituted for coal and gas in steelmaking, and for oil-derived fuels in heavy transport and aviation. It will also replace natural gas in domestic and industrial heating. In addition, by using offshore wind energy to run electrolysers – which split water atoms to produce hydrogen and oxygen – there is the possibility of creating low-cost green hydrogen for export.
We are supporting initiatives which we expect to create both increased hydrogen supply and demand in the UK. Cadent, the UK’s gas distribution network, is upgrading its infrastructure to ensure it is hydrogen ready and is also trialling its use by both domestic and industrial customers. We have also invested in Storegga, whose Acorn project is the first large-scale blue hydrogen project in Scotland.
This is where the next part of the North Sea clean energy opportunity lies. The depleted oil reservoirs deep beneath the sea have the potential to be safe, long-term repositories for sequestered emissions. This could be an important solution for storing the likes of carbon dioxide captured from industrial sectors that will find it impossible or prohibitively expensive to entirely eliminate their greenhouse gas emissions by 2050. Heavy industry, like petrochemical, steel, and aluminium producers could capture the carbon emitted to meet the UK’s net zero goals.
Exhausted oil and gas fields have been proven to offer effective long-term storage for carbon, with existing platforms, pipes and storage reservoirs in the North Sea able to be repurposed to support this new industry.
Leveraging the energy legacy and future potential of the North Sea could create a fully integrated clean energy system at scale. This could make a major contribution to the UK’s decarbonisation objectives while providing significant benefits to both the national economy and regional communities.
The development and upgrade of renewable energy, hydrogen, carbon capture storage and distribution infrastructure could deliver significant added value to the economy - creating a new energy export while helping to offset the tax relief set aside for the decommissioning of North Sea oil and gas fields. The clean energy sector is expected to create significant opportunities for well-paid employment and the transitioning of jobs currently supported by the offshore oil and gas sector.
Macquarie looks forward to playing a role in supporting the managed transition of the North Sea so it can become the low-carbon engine room of the UK’s energy system, improving security of supply at the lowest cost while meeting the UK’s net zero ambitions.
From renewable energy to new technologies we are investing in the UK’s energy infrastructure, and helping our clients on their decarbonisation journeys.