MESH positioned to accelerate the UK's energy transition

Its roadmap to providing security of power supply for the UK centres around installing new clean sources of power at pace and developing a flexible system that can accommodate and store Britain's renewable resources, while reducing the use of unabated gas power generation. The UK government is pushing ahead with reforming its energy policy, regulations, and markets across all sectors of the energy industry to accelerate the UK energy transition.

The MESH project is being developed as an integrated energy system. It can play a key part in contributing to the government's 2030 ambitions and it provides the government with large-scale flexible capacity and long duration storage needed to compliment the expansion of wind power capacity, and can be operational late in 2027. As an energy transition project backed by private capital and using the UK's onshore supply chain and work force to support a ‘just transition’, the benefits of MESH are being recognised by government bodies including the Department for Energy Security and Net Zero (DESNZ), the North Sea Transition Authority (NSTA), and The Crown Estate.

The company reported the following developments on MESH:

• EnergyPathways has signed a non-binding Memorandum of Understanding (MoU) with a clean energy fund for a cornerstone equity financing, that is priced at multiples to current share price, effectively minimising shareholder dilution. The funding complements the existing Global Green Asset Financing (GGAF) loan facility and, along with other debt financing, provides capital for MESH's growth plans in gas storage, hydrogen, and decarbonised gas power generation. This provides further demonstration to the government of MESH's ability to attract private capital to the UK energy transition.
• Following the company’s representation and consultations with the NTSA, an opportunity emerged to request a new straight to development petroleum licence for the MESH project that aligns with the project and supports an accelerated energy transition. The previous P2490 licence has lapsed. The P2490 licence was an old traditional exploration licence that was not ideally structured to allow delivery of the MESH project and was financially less beneficial for the company.
• EnergyPathways has commenced discussions with a Tier 1 FTSE 100 company regarding an agreement for MESH long-term gas storage capacity and gas sales off-take, as well as providing project debt financing for the MESH natural gas storage development.
• The company has submitted a final concept engineering report for MESH-H2 to DESNZ. MESH-H2 is a large-scale 640 MW salt cavern hydrogen storage facility with total storage capacity of 2.8 TWh. It will be integrated with the wider MESH project and linked to offshore regional wind to supply decarbonised energy.
• The critical decision on the company’s gas storage licence application to the NSTA is expected soon. The development of the MESH gas storage project will advance under this licence through to a development plan approval, construction, installation, and into operations involving The Crown Estate and the NSTA.

Ben Clube, CEO of EnergyPathways plc, said: “EnergyPathways looks forward to advancing the MESH project with an award of the gas storage licence. MESH can make a major contribution to accelerating the UK energy transition and meeting the government's 2030 clean energy targets.”

“Our progress with a Tier 1 FTSE 100 company on a long-term gas storage capacity and gas offtake agreement along with project debt financing is very encouraging.”

UK energy policy and regulatory reform

Ed Milliband, Secretary of State for DESNZ, stated in the Clean Power 2030 Action Plan, December 2024: "In an increasingly unstable world, our dependence on fossil fuels leaves us deeply vulnerable as a country – and that is true no matter where they come from.” He then emphasised the importance of, “homegrown energy.”

Ed Milliband continued at the DESNV committee, 15 January 2025: “North Sea oil and gas will continue to play an important role in the decades ahead. There is important common ground in that we must build the future for the North Sea, and the future is going to be in carbon capture and storage (CCS), offshore wind, and hydrogen.

The NSTA’s Chief Executive, Stuart Payne, in the NSTA 2025 Overview added: “We are at the start of an exciting new chapter devoted to the vital energy transition which integrates the North Sea's carbon capture, hydrogen, wind, and oil and gas resources. The climate crisis demands that the transition happens at pace and, if we get it right, this chapter can truly be the best and cleanest yet. In this new chapter, the sector will play a pivotal role. Oil and gas will continue to be part of the energy mix for decades as we transition, and domestic production can and must keep getting cleaner. The world-class supply chain, with its track record of tackling some of the most complex engineering challenges on earth, will be crucial in delivering decarbonised production and the CCS, hydrogen, and floating wind projects the country needs. The North Sea has played a major role in the world's energy mix for decades. Its global leadership of the energy transition has only just begun."

DESNZ Clean Power Action Plan: “We have high ambition. That means 43 - 50 GW of offshore wind, 27 - 29 GW of onshore wind, and 45 - 47 GW of solar power, significantly reducing our fossil-fuel dependency. These will be complemented by flexible capacity, including 23 - 27 GW of battery capacity, 4 - 6 GW of long-duration energy storage, and the development of flexibility technologies including gas carbon capture utilisation (CCU) and CCS, hydrogen, and substantially opportunity for consumer-led flexibility. Up until 2030, security of supply will be protected with the maintenance of an expected 35 GW of unabated gas reserve capacity. Growing our clean energy system in this way will see once-in-a-generation levels of energy investment – an estimated £40 billion average per year between 2025 - 2030.

MESH can make a meaningful contribution to delivering the UK government's ‘Clean Power by 2030’ target. The key elements identified by the government to back up wind capacity are CCS, energy storage, hydrogen, and decarbonised gas power generation. Much of the national portfolio of such projects depend on government subsidies and regulatory pricing that will be passed onto consumers. MESH provides a commercially competitive solution which can be delivered within the short timeframe available as well as support a just transition.

With the first phase of MESH being developed as an integrated gas storage project, the two relevant licensing regimes to be considered are: the Energy Act 2008, for the evaluation, development, and operation of offshore gas storage and the Petroleum Act 1998, for any recovery of indigenous gas from the storage operations and project.