Wireline Issue 52 Winter 2021

Capturing Clusters

The concept of local Energy Clusters is one which is spreading across the UK, and increasingly going global. OGUK explores recent developments

U ntil the Second World War UK energy provision was largely carried out by over 1,000 local municipal power and gas companies. These companies, set up in the 19th century, operated gas works, produced methane from coal and, later, set up electricity provision. This was all changed following the establishment of integrated national transmission grids for electricity and gas that we use today. But one feature of the shift to net zero is that these more regional structures may make a comeback. The concept of local Energy Clusters is one which is spreading across the UK, and increasingly going global. These are driven by the need to rapidly achieve economies of scale in new technologies, particularly in carbon capture and hydrogen production where new networks need to be developed quickly, just like in the early days of gas and power.

Governments and businesses at national, devolved and regional level are already active. Some priority locations have already been identified for this type of approach, usually associatedwithmain concentrations of industrial emissions which will need these technologies as a priority: North East Scotland, Merseyside, Humberside, Teesside and South Wales. However, the concept is catching on fast as so-called Local Energy Partnerships (LEPs) are springing up in East Anglia around Bacton and Felixstowe and the Thames Estuary region which have less of a purely industrial heritage. The first set of CCUS and Hydrogen Clusters has now gone through a sequencing process which will determine the extent and timing of government support. Both the infrastructure element and capture projects for industry and power generation will require new regulatory regimes and a revenue model to cover their additional costs. In the longer term, and as carbon markets develop it is expected that such activities will become more Business as Usual. The cluster approach is also about integrating different energy markets. As renewable electricity grows substantially, the idea is also to concentrate economic activity around key energy rich locations. The East Coast Cluster around Humberside and Teesside includes a range of new energy projects. These will be based around both the growing wind industry in that location as well as the development of new CO2 transport and storage infrastructure being carried out by the Northern Endurance Partnership. There are now three potential hydrogen production facilities, electricity production (including Drax the largest power station in Europe) and several industrial carbon capture projects that will be linked up to new pipeline infrastructure. Meanwhile local energy consumers in those regions may be among the first to be offered hydrogen for home heating purposes via the local gas distribution networks. These projects may, to some degree, also shake up the way in which energy markets are organised. One feature of this new arrangement is that longer term relationships be re-emerge between energy producers, local industries and consumers. It is no surprise



3.1 Teesside

4.0 North West


South Wales

Project Cavendish H2 Production

2.6 2.6 Southampton

Devloping a UK hydrogen backbone Source: National Grid

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