Ofgem has awarded £18 million to a project led by SGN to build a first-of-a-kind green hydrogen network serving 300 homes in Fife.
The project was among five winners to receive a collective total of around £58 million in the regulator’s eighth and final Network Innovation Competition.
The new network will be installed in parallel with the existing gas grid, allowing up to 300 households to opt into the trial initially. To help persuade them to take part, a demonstration facility, including three homes, will be constructed to showcase hydrogen appliances developed under the government’s Hy4Heat programme.
The connections, appliances and maintenance will all be offered to customers for free and the hydrogen will be supplied at the same price as natural gas. The fuel be produced by splitting apart water using an electrolyser powered by a 7MW offshore wind turbine in Levenmouth.
SGN director of energy futures Angus McIntosh said: “H100 Fife is the UK’s priority project in this area and is designed to demonstrate hydrogen distribution and in-home performance in a real-world setting. It’s an exciting opportunity to revolutionise the way millions of people heat their homes. The hydrogen appliances will connect to the existing pipes in the home for zero carbon heating and cooking with minimal disruption and with no need to replace existing radiators or plumbing.”
The £25 million project also involves the three other gas distribution networks in Great Britain – Cadent, Northern Gas Networks and Wales and West Utilities – and forms part of the Energy Networks Association’s Gas Goes Green initiative. Following its approval by Ofgem, the Scottish government will now contribute £6.9 million to the scheme.
Ofgem has also awarded more than £9 million to National Grid Gas Transmission to use decommissioned assets to build a mock-up of a hydrogen transmission network at DNV GL’s research and testing facility in Spadeadam.
National Grid project director Anthony Green said: “Today’s announcement is a major step forward and shows Ofgem’s commitment to net zero investment. If we truly want to reach a net zero decarbonised future, we need to replace methane with green alternatives like hydrogen.
“Sectors such as heat are difficult to decarbonise, and the importance of the gas networks to the UK’s current energy supply means projects like this are crucial if we are to deliver low carbon energy, reliably and safely to all consumers.”
The pipes will be connected to a dummy distribution network, which is also being built at the site by Northern Gas Networks (NGN) as part of its H21 programme. They will together supply a row of three research houses, dubbed HyStreet by DNV GL, to provide a full representation of a hydrogen gas grid. The first hydrogen boilers were recently installed in the homes by Baxi Heating and Worcester Bosch.
NGN chief executive Mark Horsley said: “We’re delighted to be working with National Grid on this project. Gas networks play an essential role in delivering a reliable, resilient supply of energy to UK customers.
“By building up the evidence base for hydrogen, we’re demonstrating that these networks are key not only to the delivery of net zero, but also to ensuring customers continue to receive a secure supply of low carbon energy for years to come.’
Construction is scheduled to begin next year and testing in 2022.
On the electricity side, the biggest winner this year was UK Power Networks, which was granted nearly £14.4 million for its Constellation project. The company plans to develop a “local intelligence platform” for controlling, optimising and protecting its substations so they are able to continuously manage variable renewable generation and surges in demand, even when communications are lost with its central systems.
Electricity North West has been awarded almost £8 million for its Quest project to combine a series of standalone voltage control systems into a single architecture and create an “inherently self-balancing network”, whilst National Grid Electricity Transmission has been granted more than £8.1 million for its RICA (Retrofitted Insulated Cross-Arms) project to develop of a new way of upgrading overhead power lines to operate at higher voltages.
Ofgem chief executive Jonathan Brearley said: “By developing crucial knowledge and expertise across the industry, innovation pioneered by previous winners has helped put the UK on the path to net zero and saved consumers millions of pounds on their energy bills.”
“The high level of ambition shown by bidders in this year’s Network Innovation Competition is hugely encouraging and shows the energy industry getting behind the challenge of net zero,” he added.
“The winning projects were those which showed the most potential to make the game-changing leaps in technology we need to build a greener, fairer energy system at the lowest cost to consumers.”
Energy minister Kwasi Kwarteng said: “The government’s ten-point plan has set out a bold ambition for a green industrial revolution that will support a cleaner energy system and allow us to meet our net zero emissions targets.
“We must continue driving forward the new low-carbon technologies we need to achieve this and I’m delighted to see Ofgem supporting these projects through the Network Innovation Competition.”
The Network Innovation Competition is due to be replaced by a Strategic Innovation Competition focussing on major sector-wide or cross-sector issues as part of the RIIO2 price controls, which take effect in April next year for all sectors except electricity distribution.