First Minister Alex Salmond has given the green light for a pioneering clean energy hub in Aberdeen which will include Europe's largest hydrogen bus fleet. The hub is also expected to eventually be able to offer refuelling for hydrogen powered vehicles if and when they make it into mainstream production.

Currently, Hyundai is trailling two of its ix35 FCEVs which have been selected by the European Commission as the official demonstration vehicle to test and promote hydrogen fuel cell technology in real-life driving conditions. They were used at a clean air event in Aberdeen earlier this year.

The Scottish Government and Scottish Enterprise funding will enable Aberdeen City Council, supported by Aberdeen Renewable Energy Group, to start the project's first phase with an order for 10 hydrogen fuel-cell buses. They will be refuelled at Scotland's first large hydrogen refuelling station, which will also be able to refuel hydrogen-powered passenger cars, as they become available.

Scottish & Southern Energy Power Distribution (SSEPD), working with industrial gases and clean energy technologies business BOC, will develop an integrated 'whole hydrogen' system which can harness wind energy to produce and store hydrogen that is then used as fuel for the bus fleet, as well as for generating electricity at times of peak demand.

Salmond said: 'Aberdeen is already Europe's offshore energy capital and this exciting new project can help position it as a leading city for low carbon technology and green transport. With a strong group of project partners, this initiative will boost Scotland's profile as a key hydrogen technology hub and a world-leading investment location for pioneering low carbon energy and transport systems.'

The Scottish Government and Scottish Enterprise have each committed up to £1.65 million to support the project, which has also received funding from the European Commission, and the UK Technology Strategy Board. In addition to the City Council, SSE and the two bus operators, other project partners include Aberdeen Renewable Energy Group, Ballard Power Systems, BOC, Scotia Gas Networks and Van Hool.

Scottish Enterprise director of energy and low carbon technologies, Adrian Gillespie, added: 'In supporting this project we can help to realise the long-term benefits of investing in hydrogen infrastructure. By providing a means of managing or storing surplus electricity from wind-farms, this project could play a vital role in enabling the management and storage of Scotland's vast renewables resources.

'The recently-published Smart Grid Sector Strategy estimates that the UK market for energy management products and services will be worth over £1.2 billion by 2020. As well as creating opportunities for companies already involved in hydrogen-related technologies, this project could also create opportunities for companies in other sectors to diversify their activities into the hydrogen production and storage market.'