UK feasibility study Project Willow has published nine options for the soon-to-close Scottish oil refinery Grangemouth’s future industrial use after evaluating more than 300 technologies.
The publication of the £1.5m study – published today by global business consultancy EY in conjunction with the UK government, the Scottish government and refining and energy trading business Petroineos – follows the recent Petroineos decision to decommission the oil refinery.
Industrial gases will be critical to at least half of the final proposals. These include fuel switching (replacing natural gas combustion with low carbon hydrogen), anaerobic digestion (AD, fermentation of organic waste and biogas for biomethane), e-methanol and methanol-to-jet (low-carbon hydrogen to produce methanol and convert to SAF), and e-ammonia (produced from hydrogen for shipping and chemicals).
Source: Project Willow
Costing the project options
The fuel switching project would require between £210m and £250m of capital expenditure, the e-mathanol and methanol-to-jet project in the region of £1.7bn to £2.1bn and the low-carbon SAF project from £740m to £900m. No estimates were provided for the e-ammonia project. The overall budget rises to around £3.5bn.
The plan – which is backed by £25m from the Scottish government and £200m from the UK – aims to unlock investment and drive growth.
In all cases private investors will be critical to achieving projects viability – principally developers and technology providers, feedstock suppliers, corporate partners and offtakers, plus other investors.
It follows First Minister John Swinney’s announcement to establish a Grangemouth Just Transition Fund, which will support businesses and stakeholders to bring forward investible propositions for the site over the next 12 months.
First Minister John Swinney said, “We will leave no stone unturned in order to secure the future of the Grangemouth refinery site, and the Scottish government has already committed or invested a total of £87m to help do so.”
To kickstart the process, Energy Minister Michael Shanks and Acting Cabinet Secretary for Net Zero and Energy Gillian Martin co-chaired a meeting this morning (Wednesday) of the Grangemouth Future Industry Board with local industry leaders, Falkirk Council, trade bodies and unions.
Scottish Enterprise and the UK Government’s Office for Investment will work with Petroineos to market the proposals set out in Project Willow and seek investor interest.
Alongside launching a search for investors, both governments have also committed to review the Project Willow policy recommendations and understand how government funding can be deployed to help develop proposals from the private sector.
Project Willow and hydrogen
Project Willow’s hydrogen projects aim to provide industrial offtake for green electrons. By converting them to gaseous and liquid molecules via green hydrogen, they can be more easily stored and transported to where they are needed.
Grangemouth, through Project Acorn, also has the potential to develop blue hydrogen, which would see natural gas converted to hydrogen, with carbon captured and sent to St Fergus for offshore storage.
“The split between green and blue hydrogen that is required to supply the projects in Willow has not been determined and this will have to be examined through feasibility studies in later stages,” the report states.
The e-methanol project would require a carbon dioxide (CO2) source. In the UK’s SAF mandate, e-fuels produced from fossil CO2 are qualifying. In the EU, CO2 must come from biogenic sources. There are a range of sources to draw from, with material sources potentially coming from AD and bioethanol projects.
Identifying project partners
The report concludes that the next step is to identify initial partners for the projects, develop detailed business plans and agree the operating principles of the delivery vehicle. So-called ‘priority actions’ will be urgently needed to unlock projects, along with detailed consideration of policy recommendations and investment support.
Thereafter, a project mobilisation phase, involving feasibility studies and pre-FEED/FEED and business plans, will be needed before final investment decisions and construction.