As the MESH Project scales up in size and scope, its diversified risk profile becomes increasingly attractive to investors. In this article, I will look at its impressive array of revenue streams and how, through its diverse offering, MESH can remain “politically agnostic” and be tailored to serve the energy needs of any administration.
EnergyPathways MESH Project has ticked many boxes for investors since its IPO in December 2023, with its potential 20-25% annual investment yields over 25 years, significant BOD shareholding and recent buying, and September’s news of MESH gaining recognition as a “Project of National Significance” via a Section 35 Directive from the Secretary of State.
Since the IPO, the MESH plan has undergone a massive transformation, evolving from a standalone gas production outfit to a fully integrated energy storage hub. It is also an infrastructure project that remarkably requires no governmental funding, as it has attracted strategic private sector funding.
However, having spoken to many new and prospective investors of late, there seems to be a lack of clear understanding of how the project fits together and what the expansion of the plan has done to diversify and derisk the project, both with regard to revenue streams and also on the political front.
What are the MESH revenue streams?
To keep things simple, the latest incarnation of MESH (Marram Energy Storage Hub) will be a project of 6 primary revenue streams: Natural Gas production, Gas storage, LDES (Long Duration Energy Storage), High-grade Synthetic Graphite, Low-cost Hydrogen, and Clean Ammonia.
Natural Gas Production: MESH is located on the Marram gas field in the East Irish Sea and is a 100% owned and fully appraised acreage containing 46 billion cubic feet of natural gas (460m therms). The homegrown UK Gas produced can be sold into the market or utilised via the KBR and Hazer processes to create low-cost hydrogen, synthetic graphite, and clean ammonia. Utilising this method efficiently takes the methane and nitrogen emissions associated with gas production and creates valuable by-products, all whilst decarbonising the gas production process and, critically, mitigating SCOPE 1,2 & 3 emissions in doing so.- Natural Gas Storage: Once the gas in Marram has been extracted, the subsea cavern will be used for the storage of gas. Estimates are that the cavern can be used for storage when approximately 20% of the gas is depleted. With a storage capacity of circa 50-60 billion cubic feet or 500-600m therms, it is equivalent in size to the Rough Storage Facility operated by Centrica, which is set to close imminently unless over £2bn of taxpayer money can be provided by the government to bring it up to standard. Currently, the UK’s working gas capacity is ranked 11th in Europe, behind the likes of Hungary and Slovakia and a mere tenth of the capacity of Germany and Italy. As we have seen from recent geopolitical events, the need for energy independence and storage is critical.
- Hydrogen: The MESH Project plans to create low-cost, clean hydrogen via an innovative process: Methane Pyrolysis and once produced, it will have a 2.8TWh capacity in which to store it.
Methane Pyrolysis is provided by the Hazer Process (it’s worth noting that EnergyPathways have UK exclusivity with Hazer Group for its use), and in essence, it takes methane emissions from gas production and produces clean hydrogen with carbon as a by-product. However, unlike other decarbonisation routes that produce CO2, another problem emission, the Hazer Process turns its carbon into high-grade synthetic graphite. Hazer Process hydrogen is estimated to cost a fraction of comparative blue/green hydrogen production methods, and circa 20,000 tonnes of hydrogen are expected to be produced per year.
The stored hydrogen energy can be used for a variety of applications, from heating homes to powering the Northwest Industrial Hub and the region’s fleet of planned hydrogen-fuelled public transport vehicles. In 2024, we saw nearby HYNET sign the first hydrogen offtake agreements with Northwest industrial partners Essar and Kimberley Clarke.
- Ammonia Production: EnergyPathways will also be incorporating Hazer Group’s strategic alliance partner KBR for the integration of the Hazer technology for the production of low-carbon ammonia, and this is where Marram’s nitrogen emissions come into play. Normally seen as a problematic waste emission in the gas production process, in the case of the MESH Project, nitrogen will be highly advantageous, as it will be combined with green hydrogen to make clean Ammonia. Using the estimated 20,000 tonnes pa of hydrogen created via the HAZER® Process as feedstock, MESH has a production target of 110,000 tonnes of clean ammonia per year. In 2027, the Carbon Border Adjustment Mechanism will take effect, adding a tariff to ammonia imports that will affect UK consumers. EnergyPathways aims to competitively produce clean ammonia domestically, supporting UK re-industrialisation, farming and reducing reliance on high-emission, fossil fuel-based ammonia imports.
- High-Grade Synthetic Graphite: In simple terms, the aforementioned Hazer Process produces valuable high-grade synthetic graphite as a by-product, therefore diversifying the company’s product offering and revenue streams even further. Current production estimates are of 60,000 tonnes pa of high-grade synthetic graphite. The graphite being produced will be highly crystalline and have excellent comparison to high-end commercial forms of graphite used in lithium-ion batteries. Recently, the company announced plans for a techno-commercial study with Hazer Group and Mitsui to process the graphite to battery-grade level, as well as look at global offtake options. For context, battery-grade graphite trades for approximately $10,000 per tonne.
- LDES (Long Duration Energy Storage): LDES is critical for the UK energy sector and is a must with the potentially colossal energy requirement to be placed on the grid by the burgeoning AI and data centre industries, not to mention the growing power demands of EV. MESH plans to utilise low-cost subsea salt caverns to provide game-changing multi-day compressed air energy storage and holds the global IP rights for the H-CAES technology. Critically, the subsea caverns can be utilised for compressed air, hydrogen and gas storage too, adding another level of adaptability and diversification. The methodology is also cost-effective and highly scalable.
Compressed air LDES will also harness excess or wasted wind energy from the surrounding wind farms in the Irish Sea and convert it into multi-day deployable power. Currently, the UK’s offshore wind power infrastructure is lacking efficiency, and every year, the government pays substantial wind curtailment costs and turns wind farms off when the wind blows too much, as grid constraints mean much of the excess wind energy is wasted. The government uses the Contracts for Difference (CfD) scheme to support wind energy projects, and it guarantees a price for electricity generated by wind farms. Therefore, any wasted energy costs the government money. In 2024, that amounted to around £1bn, and by 2030 it’s estimated to rise to at least £6bn a year. When the wind blows, there’s a glut of wind power that cannot get to the grid and be sold, and that electricity is wasted. However, when the wind doesn’t blow, gas-fired power plants are called upon to bridge the energy gap. MESH will aim to take that waste wind energy and convert it into readily deployable power via compressed air LDES, therefore providing the UK energy grid with dispatchable multi-day capacity energy as and when needed. Also, it will save the government and the taxpayer a considerable amount of money per year, money that can be used to help lower consumer energy bills. It’s also worth noting that recently, two new large-scale neighbouring Irish Sea wind farms (Mona and Morgan) have been greenlit by the government. Therefore, mitigating curtailment costs has never been more important.
There we have a brief overview of all six of the primary production offerings from the MESH Project and how they interlink to create a highly diversified suite of revenue streams. This level of diversification ensures the company isn’t overly exposed to fluctuations in commodity prices, world events, or government policy shifts, or, in fact, complete changes of administrations. It is this last point that seems to be a concern for some investors I have spoken to. However, as I’ll hopefully demonstrate, the MESH project is highly adaptable and completely politically agnostic.
Politics: How will a change of political administration affect MESH?
Due to the fact that MESH produces zero emissions, it is often mistakenly seen as a Net-Zero or Labour government-reliant project. When in fact it is, zero emissions by smart design, not for the sake of a green agenda or Net-Zero. MESH takes its emissions and uses them to make highly valuable end products that can be sold for profit, rather than being buried underground in Carbon Capture Storage facilities or released into the environment as pollutants.
So, what would happen if there were a change in administration at the next election?
As I am sure many of you are aware, it was, in fact, the Conservatives who put in place almost all of the current energy policies, including the CfD (Contracts for Difference) policy covering the wind power sector and also the hydrogen storage bill.
However, to exhaustively satisfy any doubters, let’s go nuclear and set aside the Conservatives for now and hypothesise that Reform was to win the next election. How would they perceive the MESH Project?
Firstly, the MESH project has attracted private sector cornerstone investment, so it will require no funding from the government and is therefore not affected by budgetary shifts when the government is strapped for cash. So, any incoming administration won’t have to put their hands in their pockets to subsidise the project.
But let’s delve a bit deeper and break it down again into individual revenue streams:
Homegrown UK Gas Production: Reform, I am sure, would be all for the exploitation of homegrown British gas in the North Sea, saving UK O&G jobs and ensuring we are not reliant on nonsensical gas imports. By all accounts, domestic fossil fuel production would score a big tick in Reform’s book.
Gas Storage: Energy storage, and in particular, gas storage, is absolutely mission-critical for any administration as the UK have a mere 10% capacity compared to the likes of Germany and Italy. Energy storage is energy security, and energy security is national security. Another thumbs up from Reform, no doubt.
Synthetic Graphite Production: Currently, the UK is reliant on 100% imported graphite, with 80% of that coming from China. It has been deemed a “critical mineral”, and a domestically produced source of British graphite would be essential for the economy and also nuclear power. How could Reform say no to that?
Ammonia Production: Sadly, the last remaining UK ammonia plant closed its doors recently, and the UK is now solely reliant on imports, imports that are set to get even more expensive in 2027 as the Carbon Border Adjustment Mechanism takes effect on all ammonia brought into the country. A UK domestic supply is therefore of huge value to any governing party. Ammonia is vital for UK Farmers as it is the key component in chemical fertilisers, and Reform has been outspoken in support of the UK Farming industry.
Hydrogen: Hydrogen, admittedly, isn’t on Reform’s list of loves. However, MESH will utilise its hydrogen to create the aforementioned ammonia. Therefore, if Reform decides to dismantle the hydrogen industry in the UK, this will not affect EnergyPathways in the slightest, as they can adapt to not require a market of external offtake partners.
As for the hydrogen produced from the neighbouring Irish Sea wind farms, Reform is dead against wind power of course, and will most likely say no to any new development; however, they will inherit an energy grid system that is reliant on renewable power and a sea full of wind farms that still have a 15-20 year lifespan that will need to have wind curtailment costs mitigated. Luckily, MESH can help them out with that.
LDES: Long-duration energy storage is, like gas storage, mission-critical for the UK economy. Reform has talked of creating a Crypto, AI and Datacentre hub in the UK, which will need huge amounts of steady deployable power. LDES is the answer. Also, it is worth noting that the LDES salt caverns can be utilised for hydrogen, compressed air, or natural gas storage, so it can tailor-make its service offering dependent on what current/future political administrations might require.
Conclusion:
As a business EnergyPathways MESH Project is diversified across 6 revenue streams, ensuring it isn’t overly exposed to commodity price fluctuations or geopolitical events. It requires no government or taxpayer funding due to strategic private sector investment, and it is also “politically agnostic” enough to have true cross-party appeal and provide any administration with a vital provision of key domestically produced commodities that the nation and the economy require. All in all, the expansion of the MESH project promises to deliver more in terms of output and profitability; however, most importantly, it has provided a level of diversification that has significantly derisked it as an investment.
