UK Oil & Gas PLC (AIM: UKOG) surged another 29% following a letter of support from ‘big five’ UK energy supplier RWE (ETR: RWE) for its underground hydrogen storage projects in Dorset and Yorkshire.
Germany-based RWE has plans for green hydrogen plants within the Solent Cluster, Didcot, and Teesside, which are geographically and strategically aligned with UKOG subsidiary UKEn’s storage projects.
Jeremy Smith, RWE UK’s Head of Hydrogen Business Development, commented in the letter: “We see the operation of UKEn’s hydrogen storage projects as potentially beneficial to RWE for several reasons:
- Enabling us to offer firm hydrogen supply contracts and manage production outages
- Allowing us to optimize electricity costs and electrolyzer operations in response to renewable generation capacity and wholesale market price signals
- Facilitating the efficient sizing of our optimized production facility to meet our expected offtaker demand most effectively
- Helping 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 meet 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 the government and your proposed submission for revenue support via hydrogen storage allocation rounds.”
UKOG already has a similar letter from Japanese trading house Sumitomo and hydrogen pipeline provider SGN, with all three letters supporting its application for government hydrogen storage Revenue Support.
Stephen Sanderson, UKOG’s chief executive, commented: “[RWE’s] recognition of the potential benefits our storage could bring to its 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.”
Shares jumped 29.44% to 0.093p.
