RWE Letter of Support for UKEn Hydrogen Storage
UK Oil & Gas PLC
("UKOG" or the "Company")
RWE Letter of Support for UKEn Hydrogen Storage
UK Oil & Gas PLC (London AIM: UKOG) is delighted to announce that its strategic Dorset and Yorkshire underground hydrogen storage projects have received a further key letter of support ("LOS") from RWE, a leading global energy company and one of the largest renewable and conventional UK electricity generators, supplying around 15% of UK power demand. RWE is also a major player in the UK green hydrogen space, a sector with key synergies to UKEn's storage projects.
RWE's planned green hydrogen plants within the Solent Cluster, Didcot and Teesside, are both in geographic and planned pipeline proximity to UKEn's storage projects and present the opportunity to store hydrogen created from excess renewable power for future conversion to power during periods when the wind doesn't blow, the sun doesn't shine, or there are unforeseen power demand spikes.
The Company's storage projects are operated by its wholly owned subsidiary UK Energy Storage ("UKEn").
Mr Jeremy Smith, RWE UK's Head of Hydrogen Business Development commented in the LOS:
"We see the operation of UKEn's hydrogen storage projects as being potentially beneficial to RWE for the following reasons:
· It will enable us to offer firm hydrogen supply contracts and to manage production outages;
· It will allow us to optimise electricity cost and electrolyser operating regime in response to renewable generation capacity and wholesale market price signals;
· It will enable the efficient sizing of our optimised production facility to most efficiently meet our expected offtaker demand;
· It will help to smooth our hydrogen production profile with the store acting as a buffer.
In support of this proposal, we have committed to working with UKEn to ensure that the design and delivery of the storage facility meets the needs of RWE and other potential industry users."
"We are giving permission for you (UKEn) to reference RWE as a "supporting party" in discussions with government and your proposed submission for revenue support via hydrogen storage allocation rounds."
The RWE LOS along with similar LOS from major Japanese trading house Sumitomo and hydrogen pipeline provider SGN (see RNS of 29th May and 27th June 2024) will be used as required documentation for the Company's future application for government hydrogen storage Revenue Support over the coming months. The LOS identifies a potentially significant storage user together with highlighting the wider positive impact of UKEn's planned storage upon the efficient operation of the wider hydrogen energy system.
Whilst the Company's strategic storage projects are at an early engineering design stage and there can be no certainty they will receive government Revenue Support, the Company is committed to furthering these projects which will remain as the focus of the Company's overall future strategy. The Company expects to receive further LOS and agreements with strategic partners in due course.
Stephen Sanderson UKOG's Chief Executive commented:
"We are most grateful that RWE, a leading global electrical power provider and major player in the UK hydrogen space, has given its support to our projects. Their recognition of the potential benefits our storage could bring to RWE's green hydrogen projects further underscores our project's credentials and the significant impact they could have on the UK's hydrogen economy and energy security.
This LOS together with those from Sumitomo and SGN will help build both our application for government revenue support and provide identified potential strategic investors comfort that the projects can be successfully delivered."
For further information, please contact:
UK Oil & Gas Plc
Stephen Sanderson / Guzyal Mukhametzhanova Tel: 01483 941493
Zeus Capital Limited (Nominated Adviser and Broker)
James Joyce / Andrew de Andrade/James Bavister Tel: 0203 829 5000
CMC Markets (Joint Broker)
Douglas Crippen Tel: 0203 003 8632
Communications
Brian Alexander Tel: 01483 941493
The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014, as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018. Upon publication of this announcement, this information is now considered to be in the public domain.
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