Statkraft advances plan for UK green hydrogen and ammonia project

Norwegian state-owned power group Statkraft has obtained a land lease for its planned 400 MW green hydrogen and ammonia production facility in the Shetland Islands, UK.

The Shetland Hydrogen Project 2 will use green hydrogen to produce green ammonia to be used in applications such as marine fuel and fertiliser production.

It will be built at the disused Scatsta airport near the Sullom Voe oil terminal and the Shetland Gas Plant. The site will convert excess renewable electricity into hydrogen during periods of grid constraint, according to Statkraft.

“This scheme offers an opportunity to combine Shetland’s renewable resources with innovative technology,” said Stuart Marley, Principal Hydrogen Project Manager at Statkraft.

The company plans to take advantage of the Shetland’s ample renewable resources with three wind farms currently in pre-construction: Mossy Hill near Lerwick, and Energy Isles and Beaw Field on Yell.

“While we are currently in the early stages of development, we will work closely with local stakeholders and the wider Shetland community as we progress.”

Scatsta Airport closed in 2020 after the site operator lost a major contract to Babcock MCS Offshore. The new operator moved its operations to Sumburgh Airport. This shift in contracts meant that Scatsta lost its primary source of business, leading to its closure. ©Peter Kesternich

The latest announcement comes just three months after the company said it would halt new hydrogen developments, blaming ongoing market uncertainty.

Statkraft said parts of its portfolio would be “further matured” before seeking investors to try to realise the projects. The Shetland project, which received external funding, is part of the company’s existing portfolio – which will be developed further before seeking investors to take them forward.

“Several projects have received substantial external funding opportunities, and the company is working with authorities to ensure their progression,” said Birgitte Ringstad Vartdal, President and CEO of Statkraft.

“After reducing the ambition level on green hydrogen development last year, we are experiencing even more uncertainty in the market.”

She added that the company would focus on growth opportunities in other technologies and markets.

“Developing a flexible portfolio based on our competitive strengths and prioritising the best projects to invest in is … a key priority.”