RWE has agreed to support UK Oil & Gas’ (UKOG) underground hydrogen storage projects in UK
UK Oil & Gas PLC (London AIM: UKOG) is delighted to announce that its strategic Dorset and Yorkshire underground hydrogen storage projects have received a further key letter of support (“LOS”) from RWE, a leading global energy company and one of the largest renewable and conventional UK electricity generators, supplying around 15% of UK power demand.
RWE is also a major player in the UK green hydrogen space, a sector with key synergies to UKEn’s storage projects.
RWE’s planned green hydrogen plants within the Solent Cluster, Didcot and Teesside, are both in geographic and planned pipeline proximity to UKEn’s storage projects and present the opportunity to store hydrogen created from excess renewable power for future conversion to power during periods when the wind doesn’t blow, the sun doesn’t shine, or there are unforeseen power demand spikes.
The Company’s storage projects are operated by its wholly owned subsidiary UK Energy Storage (“UKEn”).
Mr Jeremy Smith commented in the LOS, “We see the operation of UKEn’s hydrogen storage projects as being potentially beneficial to RWE for the following reasons It will enable us to offer firm hydrogen supply contracts and to manage production outages. Secondly, It will allow us to optimise electricity cost and electrolyser operating regime in response to renewable generation capacity and wholesale market price signals. In addition, it will enable the efficient sizing of our optimised production facility to most efficiently meet our expected off-taker demand. Also, it will help to smooth our hydrogen production profile with the store acting as a buffer.
In support of this proposal, we have committed to working with UKEn to ensure that the design and delivery of the storage facility meets the needs of RWE and other potential industry users.”
“We are permitting you (UKEn) to reference RWE as a “supporting party” in discussions with the government and your proposed submission for revenue support via hydrogen storage allocation rounds.”
The RWE LOS along with similar LOS from major Japanese trading house Sumitomo and hydrogen pipeline provider SGN will be used as required documentation for the Company’s future application for government hydrogen storage Revenue Support over the coming months. The LOS identifies a potentially significant storage user together with highlighting the wider positive impact of UKEn’s planned storage upon the efficient operation of the wider hydrogen energy system.
Whilst the Company’s strategic storage projects are at an early engineering design stage and there can be no certainty they will receive government Revenue Support, the Company is committed to furthering these projects which will remain the focus of the Company’s overall future strategy. The Company expects to receive further LOS and agreements with strategic partners in due course.
