Ofgem has approved the funding for engineering and other preparatory work for the planned East Cost Hydrogen network, being developed in partnership by National Gas, Cadent and Northern Gas Networks (NGN).  

Frontier has supported the networks in this process. Our analysis of the societal costs and benefits of hydrogen network investments for each network, in line with Ofgem and UK Government guidance, was submitted by Cadent and NGN alongside their respective funding requests.

What is the role of hydrogen networks?

Low-carbon hydrogen is viewed by the Government as being vital for the decarbonisation of hard-to-electrify industrial sectors and heavy transport. It can also provide very long duration energy storage and, in turn, support flexible low-carbon power generation.

Hydrogen networks will play an important role in providing connectivity between future hydrogen users and producers and, together with hydrogen storage, in helping to balance supply and demand. East Coast Hydrogen will repurpose existing natural gas pipelines and build new hydrogen pipelines across the North East, the Humber region, Yorkshire and the East Midlands.

What did our analysis consider?

Our cost-benefit analysis (CBA) estimated four broad areas of costs and savings from hydrogen network investments compared to meeting UK Government climate targets through other means:

• Savings in the cost of decarbonising industrial processes that are recognised as being hard to decarbonise;
• Avoiding the costs of reinforcing the electricity networks;
• The investment and operating costs associated with the proposed hydrogen pipelines themselves; and
• Environmental costs and benefits, which include construction emissions, as well as fugitive emissions.

What are the next steps?

Based on the Final Directions issued by Ofgem, each of the networks must now proceed, over the next 2-3 years (the precise timetable varies by network), to carry out the work specified in their respective applications. This includes delivering Front-End Engineering and Design (FEED) studies that will further explore technical feasibility and refine the network design.

To find out more, please contact media@frontier-economics.com or call +44 (0) 20 7031 7000.