HyDeploy project: Blending hydrogen gas in the UK

The UK Government is currently considering various strategies for decarbonising Britain’s gas networks using low-carbon alternatives. A key avenue under consideration is the development of a hydrogen economy. To support this emerging market, the government is testing the blending of up to 20% hydrogen by volume within gas distribution networks.

Hydrogen trials provide valuable research, evidence, and consultation outcomes to inform the crucial decisions of policymakers. Xoserve, in its role as the Central Data Service Provider (CDSP) for Britain’s gas market, is aiding these trials by facilitating data transfers that are essential for the transparent billing and metering of blended hydrogen. This is vital to ensuring a fair energy price for consumers participating in the trial.

Two significant hydrogen blending projects within the UK are HyDeploy, which focuses on its application for homes and businesses, and HyNet, which is investigating the use of hydrogen for a low-carbon industrial cluster.

This page will explore the latest developments within the HyDeploy project and its key findings to date. We will also examine how HyDeploy and HyNet are contributing to the future of gas infrastructure and hydrogen blending policies, alongside Xoserve’s role within these initiatives.

Hydrogen blending policy and trials

In its 2023 hydrogen blending strategic policy decision, the Department for Energy Security and Net Zero (DESNZ) acknowledged the potential strategic and economic value in supporting hydrogen blending in certain scenarios and circumstances.

Following this, the government has developed its plans for establishing a hydrogen market. This includes the introduction of the Hydrogen Allocation Rounds, a new Hydrogen-to-Power business model, and the inclusion of the gas’ potential within the Future Energy Scenarios analysis from the National Energy System Operator (NESO).

Reviews and trials of hydrogen blending are ongoing, with the earliest estimated commencement date for blending within the gas networks set between 2025 and 2026.

Trials, such as the HyDeploy project, are an integral part of assessing the safety, feasibility, and economic viability of hydrogen blending. They support the future policy decisions of DESNZ and its industry advisors, shaping Britain’s gas market and future energy mix.

“The [UK] Government has taken a strategic policy decision to support the blending of up to 20% hydrogen by volume into GB gas distribution networks”

DESNZ – 2023

Hydrogen blending in GB distribution networks: strategic decision

HyDeploy project and trial outcomes

The HyDeploy project is a collaborative green energy initiative uniting stakeholders from the energy, technology, regulatory, and education sectors. Its core objective is to investigate the safe and effective use of blended hydrogen within existing gas networks. This is part of the effort towards reducing carbon emissions and reaching national net zero targets.

The HyDeploy project is currently in its third phase, which focuses on enabling policy. This phase aims to showcase the project's findings and evidence gathered, directly supporting the government in its ongoing decision-making process regarding hydrogen blending.

Phases 1 and 2 of the HyDeploy project involved real-world trials of blending methane gas with hydrogen on operational networks at two locations: Keele University and Winlaton.

The first was with Keele University between 2019 and 2021, where 100 homes and 30 university buildings received the blended gas. It found that blended hydrogen up to 20% by volume does not have a negative impact on existing gas infrastructure or appliances.

The subsequent, larger-scale phase in Winlaton, Gateshead, supplied a 20% hydrogen blend to a wider community of 668 homes, a school, several small businesses, and a church. This stage demonstrated the safe use of hydrogen within the public gas network.

Following the conclusion of Phase 2 (HyDeploy2), the team published their HyDeploy2: Project Close Down Report, reflecting on the outcomes of the trials and the business case for hydrogen blending.

Summary of HyDeploy project outcomes

A positive outcome influenced by Phase 2 of the HyDeploy project was the UK Government's favourable policy decision towards hydrogen blending.

The trial successfully demonstrated the feasibility of blending up to 20% hydrogen within both private and public gas networks, without infrastructural upgrades or modifications to existing consumer appliances. This was directly mentioned in the Government’s hydrogen blending decision.

Other positive outcomes from the report include:

The Health and Safety Executive (HSE) completed a thorough assessment confirming the safety of hydrogen blending.
Both trials were delivered safely to participating consumers.
Valuable insights gained into the attitudes and experiences of consumers using hydrogen blends in their homes and businesses.

Read and download Cadent's full close down report below.

HydDeploy2 Project Close Down Report

Xoserve’s role in the HyDeploy demonstration

As the CDSP for Britain's gas market, Xoserve worked closely with trial stakeholders and customers to ensure the supporting data infrastructure and information was readily available, effective and capable of scaling for future hydrogen blending initiatives. Our work included:

Ensuring all Meter Point Reference Numbers (MPRNs) included in the second phase were readily available.
Establishing processes and controls to protect these MPRNs (and consumers) from being adversely impacted during the demonstration.

More ways Xoserve supported the HyDeploy project

The introduction of hydrogen into the existing operational gas network has potential implications for energy calculations, subsequently affecting the Annual Quantity (AQ), procurement, and reconciliation charges. This would necessitate process adjustments for networks, shippers, and suppliers across the industry.

To proactively address these potential challenges during the HyDeploy trials, Xoserve provided its customers with comprehensive information regarding:

Managing invoicing and voluntary consumer payments.
Identifying HyDeploy sites on UK Link.
Identifying HyDeploy MPRNs in the Data Discovery Platform (DDP).
Reviewing the Annual Quantity (AQ) Backstop process and how it applies to the HyDeploy project.

More information on billing and settlement for the HyDeploy trials

Process information for Xoserve customers

Introducing hydrogen into the live gas network may have an impact to the calculation of energy. This has implications on the Annual Quantity (AQ), procurement and reconciliation charges – meaning process changes for Networks, Shippers and Suppliers.

HyNet and other regional initiatives

Beyond the potential of hydrogen blending for homes and businesses, it is also an option for decarbonising hard-to-abate industrial sectors.

HyNet is a key initiative focused on decarbonising industrial areas in the North West and North Wales. Its network includes existing and new infrastructure for producing and transporting low-carbon hydrogen, alongside carbon capture and storage facilities to remove industrial emissions.

Initiatives like HyNet hold huge potential. This includes opportunities for local communities and driving the development of new low-carbon technologies for industries where electrification alone is insufficient for decarbonisation.

Building on the expertise gained from previous phases, HyDeploy project partners are exploring applications with industrial and commercial companies that rely on high-temperature processes.

Combined with the insights from HyNet, this work could provide energy leaders with a clearer understanding of the infrastructure and production requirements for decarbonising these energy-intensive sectors. Further informing policy decisions on industrial heat decarbonisation.

Regional projects, such as Net Zero Teesside in the North East and Tyseley Energy Park in the West Midlands, further illustrate how hydrogen blending exploration projects are essential to defining the gas’ role in future decarbonisation strategies.

The future of gas through hydrogen blending exploration

Continued support for hydrogen blending trials is advantageous. Without it, the potential role of this gas in decarbonising energy systems will remain unrealised.

The findings from hydrogen exploration could also open up a new revenue stream for producers, suppliers, and shippers. Thereby encouraging continued investment in a future low-carbon gas system.

Xoserve fully supports these projects and the vital evidence they give to key policymakers and industry stakeholders.

Common queries

There are process changes required to ensure a successful outcome of the HyDeploy North East demonstration:

An indicator will be applied to UK Link, Data Enquiry Service (DES) and Data Discovery Platform (DDP) to provide Shippers and Suppliers visibility of the Meter Point Reference Numbers (MPRNs) included within the demonstration.
An AQ Backstop date will be applied to all MPRNs in the demonstration from 1 September 2021. This will prevent any changes to the AQ during the demonstration.
Voluntary consumer payments will be calculated by Northern Gas Networks. These compensation payments will be issued to the Shipper by Xoserve for passing onto the consumer.
All MPRNs are monitored to review performance and manage any unforeseen issues that may arise.

There are no impacts to the switching process. Consumers are able to switch Suppliers in the normal manner.

Shippers and Suppliers must understand the process changes and their obligations involved for the affected Meter Point Reference Numbers (MPRNs).

Both Xoserve and Northern Gas Networks are monitoring all activities relating to the MPRNs involved in the demonstration. When notice is received of a change of Shipper or Supplier through the existing industry processes, the new Shipper and/or Supplier will be contacted to talk them through how having a HyDeploy demonstration Meter Point will affect them and what they will need to do differently.

The use of the hydrogen blend will result in a lower Calorific Value (CV) being passed through the consumer’s meter compared to natural gas; the exact calorific value being received by the isolated demonstration area will be monitored for the duration.

More gas will need to pass through the customer’s meter than usual, which may inflate Annual Quantities (AQs).

To ensure the AQs are not impacted, an AQ Backstop date will be applied to the MPRNs, effective from 1 September 2021. The AQ Backstop date prevents any changes in the AQ, even when meter readings are submitted, a revised AQ will not be re-calculated during the demonstration.

Transportation charges will not be impacted as the rate applied will be the Formula Year AQ set as at 1 April 2021 (or the FYAQ set as a result of an AQ Correction request accepted between 1 December and 19 August 2021).

During the HyDeploy demonstration, increased gas consumption may be registered through affected meters. Northern Gas Networks and Cadent have agreed with Ofgem to provide voluntary consumer payments, to offset the increase in consumers' bills during the demonstration.

There should be no change to the charges applied by Shippers to Suppliers and Suppliers to consumers. The consumer credit payment will offset any increase in consumers' bills during the demonstration.

Northern Gas Networks will submit HyDeploy offset payment information to Xoserve in advance, monthly. Xoserve will then invoice the offset payments to those Shippers with HyDeploy Meter Point Reference Numbers (MPRNs).

A methodology approved by Ofgem is used to calculate the adjustments for each MPRN, this has been agreed with Ofgem.

A factor is used to calculate the adjustment based on the AQ for each meter point.
The adjustment also uses a seasonal factor (the same used for Demand Estimation Methodology) to ensure any seasonal impacts in the weather are accounted for. The credit payments will therefore reflect the changes in the seasons; winter are likely to be higher credits than in summer (when more gas is consumed).

The credit compensation payment issued on 10 August will be for the period of August (4–31 August). Future payments will be issued at the beginning of each month during the demonstration and will be for that calendar month.

Where there is a Supplier or Shipper changes mid-month, the credit payment will be issued to the Shipper registered of the MPRN on the first of the month. The Shipper must submit to the Supplier to pass to the consumer.

It is the Shipper’s responsibility to transfer the HyDeploy offset payments to the relevant Supplier. The Supplier must then credit the relevant customer with the HyDeploy offset payment.

The compensation payments are in line with Schedule 45 - Transmission of Transporter Distributed Payments to Consumers which states that “Where a Supplier receives a payment from a Gas Transporter which is intended for onward transmission to a Consumer, the Supplier shall, within 10 Working Days of receipt, pay or set-off an equal sum”.

The compensation payments are exempt of VAT.

A change in UK Link has been applied to set an indicator against those specific MPRNs that have been approved as part of a HyDeploy demonstration.

The new information held in the UK Link system will be extracted into SAP Business Warehouse (BW) to allow this data to be visible in the Data Enquiry Service (DES); a system that can be accessed via the Xoserve Portal.

For each MPRN within a demonstration, the following new data items will be
viewable in Data Enquiry Service (DES):

Network Indicator: HYDEP2NGN
Network Project start date 13 August 2021 (although actual start date was 4 August 2021)
Network Project end date 4 June 2022

A new package is available to Data Discovery Platform (DDP) users, to help them manage the MPRNs which are part of the HyDeploy demonstration area:

Network Management Information (MI) – HyDeploy Data Package

This dashboard focuses on MPRNs within a portfolio which are part of the HyDeploy demonstration. It will specifically focus on portfolio data such as Annual Quantity (AQ), Supplier, Shipper and other Supply Point details. The focus of the dashboards is changes within the portfolio, i.e. when a Supplier or Shipper change takes place, Networks will receive a notification when changes occur.

Through our DDP and our new dashboards, Shippers and Networks can drill down on data at Meter Point Reference Number (MPRN) level, to obtain more insights. Networks will also be able to export and download data if required.

The process will remain the same. Northern Gas Networks will ensure that the additional health and safety checks that are needed, will be carried out on site.

The HyDeploy change was implemented as part of the November 2020 Release, details as follows:

XRN5014 - Facilitating HyDeploy2 Live Pilot

Get in touch

If you want to know more about the project, please email us at decarbonisation@xoserve.com.

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Music featured in the Xoserve videos: "Jellyfish in Space" Kevin MacLeod (incompetech.com) Licensed under Creative Commons: By Attribution 4.0 License
http://creativecommons.org/licenses/by/4.0/

Who to contact

For more information on HyDeploy, please visit www.hydeploy.co.uk

HyDeploy project and Xoserve’s role in hydrogen blending

HyDeploy explores blending hydrogen into UK gas networks for decarbonisation. Learn about the trials and Xoserve's role within a future low-carbon gas system.