The company has passed the initial screening for regulator Ofgem’s annual Network Innovation Competition, which could provide funding for the project. A full bid will be submitted this summer.
The so-called H100 Fife project consists of a hydrogen production and storage system and heating network, which will run alongside the current natural gas network in Levenmouth, Fife, Scotland.
Green hydrogen will be produced by electrolysis powered by offshore wind electricity. The hydrogen will be stored and distributed to around 300 homes connected to the new network, providing fuel for domestic heating.
In the UK, central heating accounts for roughly a third of the country’s greenhouse gas emissions, SGN said. Switching carbon-emitting natural gas for hydrogen is one of the ways to provide heating, while trying to reach the net-zero targets set by country. In Scotland, the deadline is 2045 and in the UK it’s in 2050.
“Hydrogen is an exciting energy vector that at scale could provide similar levels of safe, secure, reliable and affordable energy to what we enjoy now, with minimal disruption for customers,” said Angus McIntosh, director of Energy Futures at SGN.
“The project will provide key national evidence for hydrogen’s role in the UK’s energy transition and critical insight into the customer value proposition of hydrogen for heat,” he added.
H100 Five is part of the national Gas Goes Green initiative aimed at building a 100% carbon-zero gas grid through hydrogen and biomethane.
SGN plans to start construction around 2020-2021, starting the project in 2022-2023. It expects five years to make the project fully operational.
Scotland is part of the UK, but it has a devolved government.