Essar, Progressive Energy set up £1billion JV

New Delhi: Essar group on Wednesday announced a new joint venture (JV) with Progressive Energy to build the UK's largest hydrogen hub at the Stanlow manufacturing complex at an investment of 1 billion pounds.

"Led by Essar as the majority shareholder, Vertex Hydrogen has been formed to provide the catalyst for development of a hydrogen economy across North West England and North Wales, as a central part of the HyNet decarbonisation cluster," it said in a statement.

Essar Oil UK holds 90 per cent stake in Vertex Hydrogen, while Progressive Energy Ltd has the remaining 10 per cent.

Vertex will deliver the UK's first low carbon hydrogen production plant to lead the country's hydrogen production economy. Using Johnson Matthey's Low Carbon Hydrogen (LCHTM) technology, the hydrogen production plant will sit at the heart of HyNet North West, the UK's leading industrial decarbonisation cluster. HyNet will deploy a combination of low carbon hydrogen, distributed by Cadent Gas Ltd, and carbon capture and storage (CCS) infrastructure, provided by ENI, to decarbonise industry, transport and transform how people heat their homes across North West England and North East Wales. This initiative is a core part of a wider strategy by Essar globally to focus on investing in energy transition through the transformation of existing portfolio companies, and investments in new ventures.

"The UK's first low carbon hydrogen facility at Essar Stanlow will sit at the heart of the HyNet low carbon cluster, to produce a total of 1GW per year of hydrogen, across two units, from 2026. This is equivalent to the domestic heating energy used by a major British city region, such as Liverpool," the statement said. Waste fuel gasses from Essar Stanlow, and natural gas, will be converted by Vertex Hydrogen into hydrogen, with carbon dioxide safely captured and stored by HyNet partner Eni SpA, underground offshore in Liverpool Bay. The hydrogen production hub will provide low-carbon energy to replace fossil fuels in industry across the HyNet region, as well as heating homes, and fuelling buses, trains and trucks. "A total investment of approximately £1 billion will be committed to deliver the hydrogen production hub," it said. The hydrogen produced will, in the first instance, be utilised by Essar to reduce its carbon footprint at the Stanlow Manufacturing Complex. In addition, Vertex will provide low-carbon hydrogen to a wide range of businesses, including companies from the chemicals, ceramics, paper, glass and flexible power generation sectors, such as Tata Chemicals Europe, Encirc, InterGen, Solvay, Ingevity, Novelis, Glass Futures and Saica Paper -- all having expressed interest already. More widely in the region, companies such as Pilkington are demonstrating use of hydrogen in their facilities. Cadent Gas Ltd is also developing the UK's first multi-user hydrogen distribution network within HyNet. Essar Chairman Prashant Ruia said: "Essar is massively committed to investing in energy transition and is building a portfolio of companies in this space. Vertex Hydrogen is a central component of that vision, which will be instrumental in helping create a hydrogen future for North West England and North East Wales. This will see over £1 billion of investment, thereby creating jobs and supporting local communities for decades to come."