Industrial decarbonisation is one of the UK’s most pressing challenges. Heavy industry demands energy-dense fuels and continuous power, conditions that cannot be fully met by electrification alone.
The UK’s emerging industrial strategy involves the co-location of green technologies in industrial hubs. By clustering hydrogen production, energy storage, carbon capture, and renewable power, these hubs are evolving into integrated ecosystems that deliver low-carbon fuels, system flexibility, and secure energy supply.
Hydrogen As a Clean Burning Fuel
Hydrogen is central to industrial decarbonisation. In sectors such as steel, cement, chemical and fertilisers production along with heavy transport and aviation, hydrogen provides an alternative clean fuel where electrification is either impractical or too expensive.
There are two key types of hydrogen relevant to industrial decarbonisation:
- Blue hydrogen, produced from natural gas refining with carbon capture, providing a near-term option.
- Green hydrogen, made by renewable-powered electrolysis, is the long-term goal for carbon-free industrial fuel.
The UK government has set a target of 10GW of low-carbon hydrogen capacity by 2030. The Hydrogen Allocation Round scheme (HARs) has been put in place to provide the revenue support to H2 production infrastructure. HAR1, launched in July 2022 supports 11 projects representing 125MW of electrolytic hydrogen capacity. HAR2 is in due diligence currently, with 27 projects shortlisted. These are set to begin commercial operation between 2026 and 2029.
Forthcoming hydrogen storage and transport business models (expected to use a cap and floor revenue scheme) will underpin the infrastructure required for mass deployment.
Large-Scale Storage: Salt Caverns
CAES uses surplus renewable electricity to compress air and store it in salt caverns. When demand on the grid rises, the pressurised air is released, expanded and driven through turbines, generating electricity. CAES is capable of long-duration storage, ranging from days to entire seasons, making it ideally suited to balancing the intermittency of renewable generation.
This approach becomes even more powerful when integrated with hydrogen. Decarbonising heavy industry will require continuous, large-volume hydrogen supply, meaning storage is equally important to production. At present, geological storage in salt caverns is the only proven technology capable of safely and affordably storing hydrogen at the massive scale needed for industrial decarbonisation.
Instead of using air as the storage medium, caverns can be filled with hydrogen, which has a far higher energy density. This enables much greater storage capacity within the same geological volume, allowing caverns to serve not just as buffers for short-term variability, but as strategic reserves of dispatchable renewable energy for industrial decarbonisation.
Storelectric’s CAES technology captures and reuses the heat generated during the compression process, improving system efficiency and reducing the need for fossil back-up. This stored heat can also be applied to hydrogen production: when used to catalyse electrolysis, it reduces the electricity required to split water into hydrogen and oxygen, cutting costs and increasing overall system efficiency.
This multi-use functionality transforms caverns into clean energy banks for both industrial fuel and system stability.
At a glance, salt caverns offer:
- Massive capacity: Caverns can hold a huge amount more hydrogen than above-ground tanks.
- Security of supply: Seasonal balancing between renewable generation peaks and energy demand.
- Proven safety: Decades of operation in natural gas storage, including hydrogen storage at Teesside.
Carbon Capture, Utilisation and Storage (CCUS)
CCUS is a critical enabler of both blue hydrogen and wider industrial decarbonisation. By capturing emissions from hydrogen production and energy-intensive industries, CCUS prevents millions of tonnes of CO₂ from entering the atmosphere.
Captured carbon can then be:
- Permanently stored in depleted offshore oil and gas fields.
- Repurposed into feedstocks for chemicals and fuels.
In the IEA’s Sustainable Development Scenario, in 2030, 40% of low-carbon hydrogen comes from fossil-based production that is equipped with CCUS making it indispensable in the near term while green hydrogen scales.
Industrial Hubs: Teesside and the East Coast Cluster
Co-location reduces capital costs, accelerates deployment, and builds resilient supply chains.
Teesside
- Net Zero Teesside Power (NZT Power): the world’s first commercial-scale gas-fired power station with CCUS, generating 742MW of low-carbon power and capturing up to 2 MtCO₂ annually.
- H2Teesside (bp): targeting 1GW of blue hydrogen by 2030, capturing ~2 MtCO₂ annually.
- Salt cavern storage: The region has already safely stored hydrogen in a salt cavern, and has the capacity to house large-scale hydrogen and CAES.
East Coast Cluster
Spanning Teesside and the Humber, the East Coast Cluster is one of the UK’s flagship CCUS and hydrogen projects, anchored by the East Coast Network of CO₂ pipelines and offshore storage sites.
- Expected to capture and store 20–30 MtCO₂ annually by 2030.
- Aims to remove 50% of the UK’s industrial cluster CO2 emissions
- Provides shared transport and storage infrastructure, creating economies of scale and enabling a phased build-out of hydrogen and CCUS capacity.
Together, Teesside and the East Coast Cluster represent the most advanced example of co-located green technologies in practice: Integrating CCUS, hydrogen, energy storage, and renewables to create a scalable blueprint for industrial decarbonisation.
Repurposing Legacy Assets
Decarbonisation at scale requires cost-effective solutions. Repurposing legacy infrastructure reduces capital expenditure, avoids lengthy permitting, and supports just transition objectives.
- Salt caverns: Adapted from natural gas storage for hydrogen and CAES.
- North Sea pipelines: Re-used to transport CO₂ offshore for storage.
- Coal power stations: Converted into low-carbon energy hubs, making use of high-voltage grid connections.
This re-use preserves industrial heritage while accelerating the deployment of clean energy technologies.
Integrated Ecosystems, Not Isolated Technologies
Industrial decarbonisation cannot be solved by a single technology. It requires systems integration; hydrogen as an alternative clean burning fuel, CCUS as an enabler, geological storage as a buffer AND store of dispatchable hydrogen, and renewables as a clean power source.
