Aberdeen City Council is poised to recover a mere portion of the significant taxpayer funds invested in its hydrogen bus fleet, a move that signals a pronounced shift in the city’s green energy strategy. Revelations from a leaked council dossier obtained by The Press and Journal indicate a fire sale of the 25 hydrogen-powered buses, with the local authority expecting to claw back approximately 6p for every £1 of public money spent.
The SNP and Liberal Democrat leadership in the city reportedly approved a cut-rate deal in early August, resulting in a 94% depreciation on the original £13.9 million acquisition cost of the fleet, which was initially deployed in early 2021 as part of Aberdeen’s ambition to build a post-oil hydrogen economy. This means an average loss of £520,000 per vehicle. The council anticipates recouping only £816,000 from the sale of these buses.
A Swift Pivot from Hydrogen to EV
The decision to divest from hydrogen comes after the city’s refuelling stations experienced a supply outage in July 2024, leaving the 25 Wrightbus 60-seaters inoperable and stored at First Bus’s King Street depot for two years. The outage was attributed to a shortage of replacement parts for the pumps. By February of this year, council officials had acknowledged a “significantly” changed energy market, favouring battery-powered electric vehicles (EVs) over hydrogen.
As part of this strategic pivot, First Bus, which leased the vehicles from the council, is set to purchase 23 of the buses for £30,000 each. The transport operator plans to convert these vehicles to electric power, turning away from hydrogen fuel. A spokesman for First Bus declined to comment on the transaction. The remaining two buses will be acquired by GeoPura for £126,000, intended for continued hydrogen use. GeoPura also declined to comment. Several other bids, including offers to take buses for free or for £1, were reportedly tabled but not accepted.
Ending the BP Joint Venture
Further to the bus divestment, Aberdeen City Council is dissolving its joint venture with BP, formed to produce green hydrogen from a solar farm. The council expects to pay BP a “nominal” £1 to acquire the energy giant’s interest in BP Aberdeen Hydrogen Energy Limited, the joint venture company with a reported value exceeding £40.3 million. Aberdeen City Council had invested £17 million into the scheme, while BP contributed £23.7 million.
Craig Innes, the council’s commercial chief, stated in a confidential August report: “Transfer of the company to 100% council ownership is anticipated by the end of August, and will be executed through a share purchase agreement, currently under negotiation.” He added that the signing would “de facto terminate” the joint venture. A BP spokeswoman reiterated a previous statement, saying: “BP acknowledges Aberdeen City Council’s decision and the impact on the Aberdeen Hydrogen Hub. We will work closely with them on next steps.”
Mr Innes also confirmed that officers had reviewed grant funding conditions and contractual obligations, concluding that “No issues have been identified, however final checks on warranties and IP right have still to be completed.” The hydrogen bus project received substantial external funding, including £7.5 million from the Scottish Government and a €2 million grant from the European Commission’s Joint Initiative for Hydrogen Vehicles across Europe (Jive).
Future as an EV Charging Hub
The funds generated from the sale of the hydrogen assets, alongside a proposed £1.38 million investment from the council and £1.65 million from its EV charging infrastructure partner Ezo, are earmarked for converting the former Aberdeen Hydrogen Hub into a major EV charging facility. This initiative aims to establish “one of the largest EV charging hubs in Scotland,” offering rapid charging for public transport, commercial fleets, and private vehicles.
In Case You Missed it:
Mr Innes noted that “Initial modelling undertaken with Ezo indicates the EV Pivot has the potential to generate multiple long-term income streams for the council and/or joint venture over the 20-year contract.” These income streams are anticipated from vehicle charging activity, site access agreements, and energy-related commercial opportunities.
In a broader “purge” of its hydrogen assets, the council also plans to sell off its hydrogen production and refuelling equipment from various sites, including Cove, Kittybrewster, and the TECA exhibition centre. GreenPower is in line to purchase this equipment for £1.3 million and has offered nearly £300,000 to lease the Cove and Kittybrewster sites for five years. This sale will also relieve the council of £265,000 in decommissioning liabilities and is expected to reduce insurance premiums at TECA by almost £340,000.
Efforts are also underway to sell a hydrogen-powered bin lorry and ten conversion kits designed to allow diesel vehicles to run on dual-fuel hydrogen. The council had 29 such dual-fuel vehicles by early August, which are now expected to operate on diesel-only until their replacement with low or zero-emission alternatives by 2027.
