Hydrogen Focus Area

The Hydrogen Focus Area considers the market change activities needed to integrate hydrogen into the UK’s energy mix.

Hydrogen, alongside other technologies, is expected to play a significant role in the decarbonisation of UK heat, industry, power generation and transport.

Recent UK hydrogen policy direction included the publication of The ten point plan for a green industrial revolution and the UK hydrogen strategy, outlining a vision for hydrogen development.

Alongside the hydrogen strategy a series of consultations were released, seeking industry views prior to Government publishing the outcome on the design of a UK low carbon hydrogen standard, as well as on the business model for low carbon hydrogen. In addition, Government confirmed the first industrial clusters (HyNet and East Coast Cluster) to be taken forward to the next stage of negotiations.

Most recently, the British energy security strategy includes ambitions to double previous hydrogen targets to 10 GW by 2030.

Clearly, there is a significant pipeline of policy signals to direct short-term ambitions for hydrogen development in the UK. However, uncertainty remains on the market impacts of a hydrogen transition.

National Gas, in collaboration with industry, decision makers and stakeholders, is working on the Hydrogen Gas Markets Plan (GMaP). We want to make sure the gas system and markets continue to deliver consumer value throughout the UK’s transition to a hydrogen future.

Hydrogen GMaP ongoing projects

2022 Hydrogen GMaP

Commercial framework exploration for Project Union

Networks will be key to enable a UK hydrogen transition. Networks will connect hydrogen producers with hydrogen consumers, to deliver reliable, safe and efficient supplies of hydrogen. Networks will also enable the necessary market pull and push forces to generate a liquid and competitive hydrogen market.

Through the Hydrogen GMaP, we are working with industry to explore how the development of Project Union could impact the existing gas sector market design and commercial arrangements.

Project Union is a National Gas Transmission project, exploring the potential to repurpose sections of the NTS to develop a hydrogen backbone network.

Hydrogen Deblending feasibility study (Phase 2) Markets workstream

We are undertaking in-depth analysis on how existing market frameworks may need to evolve to accommodate de-blending (i.e. gas separation) technology on the UK’s gas networks.

De-blending technology could play a pivotal role in the rollout of hydrogen blending, by protecting customers from receiving a hydrogen blend and enabling customers (who may be sensitive to gas quality fluctuations) to receive a consistent hydrogen blend or providing customers with full (100%) hydrogen.

This is a Network Innovation Allowance funded project, in which we have commissioned Frontier Economics to undertake in collaboration with an expert industry working group.

Hydrogen GMaP completed projects

2021 Hydrogen GMaP

The role of Guarantees of Origin in driving a future UK hydrogen market

This first-of-a-kind project explored the role a hydrogen Guarantee of Origin (GoO) scheme could play in the development of a UK hydrogen market.

In this project we evaluated existing GoO schemes in the UK and the EU, explored the benefits a hydrogen GoO scheme could generate for market participants including hydrogen producers, transporters and consumers, and also set out six key recommendations for industry to consider in order to implement a UK hydrogen GoO scheme.

2020 Hydrogen GMaP

Scenarios

We developed four hydrogen scenarios to explore the potential role of various hydrogen production and storage technologies, hydrogen transportation options and user conversion routes to full (100%) hydrogen. The scenarios were based on completed or ongoing hydrogen projects in Great Britain.

The purpose of generating the Hydrogen GMaP scenarios was to explore the hydrogen events or triggers that could lead to market change. For market participants this served to indicate potential future market change, based on specific triggers that could come to fruition.

Market considerations to support a hydrogen town

Based on Government ambition set out in the Prime Minister’s 10 Point Plan to potentially support industry to develop a plan for a hydrogen town before the end of the decade (an ambition based on successful evidence from hydrogen trials), this Hydrogen GMaP project set out to explore the potential market arrangements required to enable a hydrogen town.

The purpose of this project was to explore impact of a full (100%) hydrogen town to existing gas sector market design and commercial arrangements.

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