LONDON: UK Energy Group plc (AIM: UKEN) announced that its wholly owned subsidiary, UK Energy Storage Ltd, has signed a five-year Memorandum of Understanding (“MOU”) with UK Nuclear Limited (“UK.N”) to explore the synergistic development of co-located advanced nuclear power, green hydrogen, green ammonia and UKEn’s at-scale underground geological energy storage.

The collaboration will examine how power, heat and steam from Advanced and Small Modular Reactors (“A&SMR”) could support the efficient production of green hydrogen via electrolysis and its subsequent use to produce green ammonia, a proven hydrogen carrier set for significant market expansion in the global power, maritime, defence and agricultural sectors. The MOU will also explore the potential for the produced hydrogen and ammonia to be stored at scale in co-located UKEn underground geological energy storage facilities.

The MOU parties intend to:

· identify and scope suitable locations for co-located A&SMR nuclear power, green hydrogen, green ammonia and underground geological energy storage;

· develop an integrated industrial concept exploiting the potential synergies between co-located A&SMR nuclear power, green hydrogen & ammonia generation and underground energy storage;

· support each other’s related planning, stakeholder and government engagement activities;

· consider potential joint applications for future UK Government and research support.

UKEN’S Board believes the envisaged collaboration with UK.N could strengthen the Company’s current strategy by connecting its planned underground hydrogen storage projects with a substantive source of reliable low-carbon power and potentially significant supplies of hydrogen and/or ammonia.

The combination of reliable low-carbon power, green hydrogen, green ammonia production and large-scale geological storage could position UKEn’s projects as key components of an integrated clean-energy system. Such a system could support hydrogen-network balancing, energy security, green ammonia and e-fuel production, and ultra-long-duration energy storage.

The collaboration is consistent with the emerging pathway set out in the UK Low-carbon Ammonia Roadmap, which identifies a growing role for low-carbon ammonia in power, maritime transport, hydrogen supply, energy storage and the defence and agricultural sectors. The Roadmap anticipates additional UK ammonia storage infrastructure being developed as demand grows, with greater storage capacity ultimately contributing to UK Energy Security.

The collaboration is also aligned with the UK Government’s Modern Industrial Strategy and its objective of driving investment, growth and skilled employment through clean energy industries. By bringing together advanced nuclear power, hydrogen and ammonia production and large-scale underground energy storage, the evolving concept could support new industrial activity, strengthen domestic energy infrastructure and contribute to the UK’s long-term energy security. The Government’s Clean Energy Industries Sector Plan identifies nuclear and hydrogen as frontier industries with significant potential to attract investment and create industrial employment across the UK.

Stephen Sanderson, the Company’s Chief Executive commented: “This agreement brings together highly complementary elements of the UK’s future energy system; advanced nuclear generation, low-carbon hydrogen and ammonia production, and UKEn’s planned large-scale underground (hydrogen) energy storage.

The combination could provide the reliable power and steam required to produce green hydrogen, support the subsequent production of green ammonia, and enable energy to be stored at scale for future use.

The concept is closely aligned with the Government’s ambition to promote industrial growth through investment in clean energy, domestic infrastructure and high-value supply chains. It is also consistent with the emerging UK roadmap for low-carbon ammonia. We believe this collaboration strengthens the strategic relevance of UKEn’s planned storage projects and creates a potentially important new pathway towards their development.”