Following the successful completion of Phase 1 in 2023, the gas networks have engaged with KPMG to design the market frameworks modifications necessary to facilitate hydrogen blending, and to develop a full operational implementation plan.
Running from mid-2024 for a period of twelve-months, the Phase 2A project will define how a ‘hydrogen blend-ready’ network will operate, and prepare a full set of detailed, implementation plans. Key decisions are required across the full range of market frameworks, as well as a clear view of the operational impacts from the ongoing safety assessment between HyDeploy and the HSE.
Mobilisation will begin in Summer 2024, whilst the main design stage will run for 8 months from September to April 2025, with project completion planned for June 2025.
Benefits
N/A
Learnings
Outcomes
The project’s achievement of the stated aims, objectives, and success criteria have helped deliver the following outcomes:
- From the starting point of believing there were potential changes required to select areas of the natural gas market framework, the collaborating networks, policy makers, and external stakeholders now understand the design of modifications that will be progressed under Phase 2B. These modifications include isolated changes to the UNC, amendments to a condition of the GT Licence to account for an applications window, and updates to ancillary agreements.
- By incorporating stakeholder consultation into the design process, organisations such as hydrogen producers, gas shippers/suppliers, Ofgem and DESNZ were part of the change process, and were able to provide input when appraising options and making recommendations. This has resulted in the outcome of the project’s deliverables being more widely supported (versus the alternative of conducting minimal engagement).
- Via the engagement with the Hydrogen Blending Taskforce, producers and potential users now have a better understanding of the likely commercial arrangements they will have to navigate when seeking a connection to blend hydrogen within the natural gas network. This has delivered the beneficial outcome of allowing prospective projects more time to prepare business plans and build knowledge.
- GTs now have a clear, evidence-based roadmap that translates complex safety research and market framework recommendations into practical, sequenced activities, providing clarity on what needs to be done, when, and how. This reduces uncertainty and ensures coordinated delivery across networks. This work can be utilised in future projects to build highly detailed transformation plans for the organisations.
- The programme has put GTs in a better position to respond effectively to anticipated changes in the Gas Safety (Management) Regulations by embedding technical and operational mitigations into a structured plan that supports compliance and safe operation.
- By consolidating 934 individual impacts into 59 master impacts and applying them to case studies, the project provided quantified time and cost estimates, enabling informed high level investment decisions and resource planning.
- Immediate “no-regret” actions, such as procurement updates and procedure reviews, were identified to accelerate readiness and reduce future risk, allowing GTs to begin preparation without waiting for full roadmap implementation.
- The process strengthened industry collaboration through peer review and knowledge sharing, creating consistency and fostering a foundation for future hydrogen initiatives and regulatory engagement.
Lessons Learnt
At its core, the project had the aim of developing learning that will help shape future programmes of work. Some noteworthy learnings from the project include:
- The establishment of agreed-upon-principles for the design of a hydrogen blending connections allocation process. The project acted an industry focal point for the development of a high-level, end-to-end connections allocation process. As a result, the networks, Ofgem, DESNZ, and wider industry have greater clarity on the process a hydrogen project will need to navigate to connect to the natural gas network.
- The treatment of hydrogen blending entry capacity offers. Heading into the project, management of parties’ rights to inject hydrogen into the natural gas network was perhaps the most complex and incomplete area of the market framework. Through collaboration as networks and in consultation with wider stakeholders, the project arrived at a set of principles for the future management of hydrogen blending entry capacity offers – e.g. the impacts of prevailing gas conditions on offers networks are able to make to connectees, and the balance between rewarding early movers versus optimising total system capacity.
- One of the most important lessons learned from this programme was the significant time and effort required from Subject Matter Experts (SMEs). Their involvement was essential for validating impacts, interpreting safety evidence, and ensuring technical accuracy across all networks. However, the level of engagement needed was much greater than originally anticipated. Each impact required detailed analysis, cross-network peer review, and iterative feedback before ratification, which placed considerable demands on SME availability and scheduling.
This experience highlights the need for future projects to plan SME resource allocation early and realistically. Dedicated SME capacity should be secured rather than relying on ad-hoc support, and a structured review process with clear timelines, templates, and escalation paths should be implemented to streamline validation. Additionally, knowledge transfer mechanisms such as creating reusable guidance notes and decision logs can help reduce repeated effort in later phases. Finally, future programmes should strike a balance between thoroughness and efficiency by prioritizing high impact areas first to avoid bottlenecks.
Overall, this learning reinforces that SME engagement is not just a technical requirement but a critical success factor for translating complex safety research into actionable operational plans. Underestimating this need can lead to delays and increased costs, so incorporating SME involvement into the delivery model from the outset is vital for success.
- The peer review process across networks significantly improved the quality and credibility of impact assessments. Independent validation helped identify gaps and ensured consistency in interpretation, which is essential for industry wide adoption.
- Updating assets and processes is only part of the challenge. Embedding new procedures, training staff, and adjusting operational culture are equally important. In this programme, procedure reviews and training requirements emerged as major tasks. Future projects should allocate resources for change management from the outset, including stakeholder engagement, communication plans, and competency development.
- Identifying “no-regret” actions, such as updating procurement policies and reviewing procedure suites will allow GTs to start preparing without waiting for full roadmap implementation. Future projects should actively seek similar opportunities early, as these actions reduce future costs and operational risks while demonstrating progress to stakeholders