The Tagdale Green Ammonia project in Shetland has already been shortlisted for UK government funding under Hydrogen Allocation Round 2 (HAR2).

The Norwegian state-owned energy firm plans to use renewable power to produce green hydrogen for conversion into ammonia, targeting supply to the fertiliser, shipping, and industrial sectors.

With public exhibitions set to take place later this month as part of early planning, Statkraft is scheduled to begin operations on the Tagdale project by the end of 2029.

Brie Foster, Statkraft’s Hydrogen Project manager, said the confirmation of the Shetland project demonstrates “the huge potential of the area” as a hub for clean energy.

“This project will play an important role in helping deliver food and energy security at home, as well as contribute more widely to the transition to cleaner energy,” Foster added.

“We’re in the early stage of development of our plans and will work closely with local stakeholders and the community in Shetland as our proposals progress.”

Statkraft is also planning a second 400MW hydrogen and ammonia project in Shetland, which will be located on land adjacent to the disused Scatsta airport.

The news comes months after Statekraft said it was halting all new green hydrogen project development because of market volatility, including high costs, low demand, and uncertain returns.

However, it reassured that “mature projects” that were already in progress or had strong external funding prospects would be advanced, before seeking investors to take them forward.