Net Zero Teesside, UK and carbon capture, utilisation and storage

Net Zero Teesside Power (NZT Power) aims to be one of the world’s first commercial scale gas-fired power stations with carbon capture. Image:
Teesside, a region in the north of England with an industrial heritage, is home to a diverse industry. The Net Zero Teesside Project (NZT) is set to build a Net Zero industrial cluster in the Tees Valley comprising power generation, hydrogen and chemicals production, steel making and other industries which aim to decarbonise their operations through the deployment of carbon capture, utilisation and storage (CCUS). NZT hopes to decarbonise the area’s carbon-intensive industry by capturing up to 10 MtCO2/y by 2030.

The geographically compact nature of Teesside’s industrial cluster, its proximity to ideal offshore CO2 storage sites in the North Sea, together with strong public and political support for these industries, makes Teesside a prime location to decarbonise industry and power, and to kick start a hydrogen economy using CCUS. Teesside Freeport is the UK’s largest and the only one in the country for importing ammonia; it provides the region the potential to export low-emission ammonia and/or hydrogen in the future.

In addition to existing businesses that are committed to decarbonising their operations, several new low-emission projects such as an 860 MW combined cycle gas turbine (CCGT) power plant with CCS, a gas-fed low-carbon hydrogen plant and an electric arc furnace steel making plant, have been planned or proposed. A common infrastructure is being developed by the Northern Endurance Partnership (NEP), a joint venture between BP, Equinor and TotalEnergies, to enable the CO2 created by these industrial processes to be captured and transported to offshore storage sites in the North Sea.

NZT has attracted many investors and industrial players including NZT Power, BP, Kellas, Suez, CF Fertilizers, TV ERF, BOC, GE, SeAH Wind and British Steel. The local authorities are committed and are actively working with the Government and industries to deliver the NZT. The realisation of NZT should create thousands of jobs and give a sustainable boost to the local economy. As a result, the initiative is receiving strong local support.

On 26 June, the Fuel and Energy Research Forum (FERF) held a joint CCS Interest Group/CCUS Environment Special Interest Group Seminar at the Net Zero Industry Innovation Centre, Teesside University. Before the seminar, some delegates were taken to Teesworks Industrial Zone for a site visit. Work has begun on projects such as the IGCC power plant integrated with CCS (NZT Power) and SeAH Wind’s wind turbine manufacture plant. The power station is planned to be built on the old Redcar blast furnace site where the old facility is being demolished. There is an existing pipeline network for transporting CO2 to offshore storage sites in the North Sea. Existing railway lines go through the site connecting it with cities and towns in other regions. A major transport hub to serve increasing numbers of vehicles coming to the Teesworks site has been approved. Large areas of various sites are being cleared and made available for proposed plants and facilities.

The NZT Power scheme is a partnership between energy companies BP and Equinor, and the Teesworks industrial zone. At the Seminar, Mr. Chris Paykin from BP presented BP’s CCUS plans at Teesside and globally. NZT Power would be the world’s first IGCC power station with CCS, providing enough low-carbon electricity to supply up to 1.3 million homes. When in operation, up to 2 MtCO2/y of emissions from the power station (which would otherwise be released into the atmosphere) would be captured and permanently stored under the North Sea, along with emissions from the Teesworks site’s other industries. A final investment decision will be taken later in 2024 and, if agreed, commercial operations could start in 2027.

Whitetail Clean Energy also plans to build a 350 MW power plant at Teesside, with early grant funding provided by the UK government. It will be the UK’s first power plant using the innovative NET Power technology. Natural gas is burnt in pure oxygen. The resulting CO2 is recycled as working fluid through a semi-closed loop called Allam-Fetvedt Cycle, generating a stream of pure CO2 ready to be transported and stored. The plant will capture over 800,000 tCO2/y, while emitting virtually no air pollution. Construction is likely to commence in 2024 and it is expected to enter into commercial operation in 2027.

H2Teesside is a low-carbon hydrogen production project, proposed by BP, using natural gas reforming combined with CCS. Hydrogen will be sent to large industrial users (offtakers) in Teesside via a pipeline network. It will produce approximately 160 ktH2/y, which will displace existing natural gas consumption by industrial emitters in Teesside, and capture approximately 2 MtCO2/y for long-term storage under the North Sea. BP is also developing a renewable hydrogen production facility, HyGreen Teesside, with initial planned phase of up to 80 MW of installed hydrogen production capacity.

In addition to the new low-carbon production facilities under development, there are multiple projects to retrofit the existing plants at Teesside with CCUS. Examples include  the Redcar Energy Project that plans to capture over 90% of the CO2 (which equates to over 400,000 tCO2/y) at its 49 MW energy recovery facility, and SUEZ’s plan to build a carbon capture plant at its existing energy-from-waste facilities at Tees Valley.

As for carbon utilisation, sustainable aviation fuel (SAF) production at Teesside got a big boost as almost £40 million from the Department for Transport’s Advanced Fuels Fund was awarded to five Teesside-based firms in 2023. Two of the projects intend to synthesise SAF using renewable hydrogen and captured CO2. Willis Sustainable Fuels (Carbonshift PtL) is one company developing plan for a refinery at Dorman Point on the Teesworks site with a capacity of 14 kt/y of SAF; it was awarded £4,721,000 from the fund’s second round. It will use power-to-liquid technology to convert CO2 and hydrogen into SAF, with operation expected to begin in 2026. Another power-to-liquid SAF project NABOO, developed by Arcadia e-Fuels, has been awarded £12,341,000. The project is to build a commercial scale plant to convert CO2 and hydrogen to produce 67.7 kt/y of SAF when at full capacity. The plant is expected to be operational in 2028.

Evidently, CCUS is an essential part of the NZT and will play a key role in decarbonisation of local industries. We need to deploy all the measures and technologies available to reduce greenhouse gas emissions to achieve net zero emissions (NZE) by, or around, 2050. CCUS, with its versatility of application and demonstrated effectiveness and ability to deal with enormous volumes of emissions, is an essential element of the technology suite that must be deployed, especially for the hard-to-abate sectors. Studies from the Intergovernmental Panel on Climate Change (IPCC), the International Energy Agency (IEA) and other independent organisations indicate that CCUS is a necessity, not an option, and reaching NZE will be virtually impossible without CCUS.

CCUS is central to the least-cost pathways to NZE, and facilitates a clean energy transition in a realistic and cost-effective way. In addition to reducing emissions, carbon dioxide utilisation (CCU) technologies enable carbon cycling by converting captured CO2 into value-added commercial products such as fuels, chemicals, polymers and building materials. Through the substitution of fossil fuel-based raw materials with captured CO2 and increased use of renewable energy, the integration of CCU-based manufacturing can contribute to a low-carbon economy.

Decarbonisation using CCUS will add costs. Currently, there is a significant gap between CO2 compliance market prices and CCS costs that is estimated to be €130-150/tCO2 compared with the EU Emissions Trading System allowance prices of around €68/tCO2 (on 25 June).

Incentives and subsidies would be needed initially to get the nascent sector up and running. The proposed low-emission projects at the NZT will need financial and policy support to become economically viable.

The UK government has been working on initiatives to develop CCUS industrial decarbonisation clusters. It published The Carbon Capture, Usage and Storage Net Zero Investment Roadmap in April 2023, outlining joint government and industry commitments for the deployment of CCUS in the UK and sets out its approach to delivering four CCUS low carbon industrial clusters, capturing 20-30 MtCO2/y across the economy by 2030. The government also invested heavily over the years in research, development and deployment of CCUS technologies. In the 2023 Spring Budget, the government committed to invest £20 billion over a period of 20 years to scale up CCUS projects across the UK. The government’s Track 1 and 2 CCUS cluster sequencing program were to help to de-risk investments, aligning emitters and CO2 transport and storage operators. However, the projects under development in the NZT and other regions are not without their challenges. Continued political and financial support is vital to deliver NZE industrial clusters in Teesside and across the UK.