Ofgem approves SGN hydrogen homes project in Scotland

SGN has announced H100 Fife - a project designed to heat homes with 100 percent green hydrogen - has received Ofgem approval. 

The energy regulator will award up to £18 million from its annual Network Innovation Competition to support development of the new hydrogen network, triggering a further investment of £6.9m from the Scottish Government. SGN shareholders and Britain’s three other gas distribution networks are also providing funding for the project, according to a statement.

Work will now begin on delivering the full-hydrogen demonstration network in Levenmouth, Fife, that will bring carbon-free heating and cooking to around 300 homes from the end of 2022.

The project will provide compelling evidence of hydrogen’s performance in a real-world domestic setting as a zero-carbon energy source, as the Scottish and UK Governments look to reduce greenhouse gas emissions to net zero by 2045 and 2050 respectively.

The clean gas will be produced locally, by a dedicated electrolysis plant powered by a nearby offshore wind turbine. The project will be the first of its kind to use a direct clean power supply to produce hydrogen for domestic heating.

“We’re delighted that stakeholders have recognised the critical importance of H100 Fife,” says Angus McIntosh, our Director of Energy Futures. “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 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,” says Jonathan Brearley, Ofgem’s Chief Executive.

 “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.

“Ofgem will continue to back the best of innovation, which will help drive the green recovery and enable consumers to reap the benefits up to 2050 and beyond.”

Replacing natural gas with hydrogen and other low-carbon alternatives will be key if the UK and Scottish Governments are to meet legally binding net zero emissions targets. 

H100 Fife is a critical first step as the UK aims to develop 5GW of hydrogen production capacity and a first “Hydrogen Town” by 2030. The project was singled out by the Prime Minister during the launch of the UK Government's Ten Point Plan for a Green Industrial Revolution, in addition to receiving support from Ofgem and the Scottish Government.

Customers in Fife will be given the chance to participate in the world-first demonstration.  Any customer that opts-in to the project will receive a free hydrogen connection, free replacement hydrogen appliances and free maintenance over the length of the project. They will pay the same amount for hydrogen gas as they would pay for natural gas.