Northern Gas Networks (NGN) has secured additional innovation funding from the UK energy regulator, Ofgem, to advance the next stage of its Knapton H2 Storage for H2P project in North Yorkshire. The funding, awarded through Ofgem's Strategic Innovation Fund (SIF), will enable the initiative to move into its Alpha phase, building on the successful completion of the earlier Discovery stage.
The Strategic Innovation Fund supports projects that accelerate the decarbonization of Britain's energy networks by promoting innovative technologies and infrastructure. During the Discovery phase, the project enhanced understanding of geological hydrogen storage and its potential role in improving power generation reliability and strengthening energy system resilience.
NGN leads the project in collaboration with several key partners, including the British Geological Survey, Centrica, Ceraphi Energy, National Gas Transmission, the University of Edinburgh, and Wales & West Utilities. Together, the consortium aims to develop practical hydrogen storage solutions that can support the UK's transition toward a low-carbon energy system.
The Alpha phase will focus on evaluating near-surface and above-ground hydrogen storage technologies at the Knapton site. These storage options are expected to provide flexible energy reserves by storing surplus hydrogen generated during periods of abundant renewable electricity and releasing it when energy demand rises. This capability could significantly improve grid stability while reducing the curtailment of renewable power.
Alongside short-term storage solutions, the project will also investigate the feasibility of developing large-scale underground hydrogen storage facilities. Researchers will examine the region's geology, including depleted hydrocarbon reservoirs, porous rock aquifers, salt deposits, and legacy gas infrastructure, to determine their suitability for long-duration hydrogen storage. The study represents the first comprehensive regional assessment of geological formations capable of supporting hydrogen-based energy storage.
A key objective of the project is to develop a Scalability and Adoption Plan based on the findings from Knapton. The roadmap will help transfer knowledge gained from both geological and near-term storage technologies to other regions across the UK, supporting broader deployment of hydrogen infrastructure.
The project also seeks to strengthen local economic development while enhancing national energy security. By enabling efficient storage of renewable energy, hydrogen storage can provide backup power for gas-fired peaking plants during periods of high electricity demand, ensuring greater reliability as renewable generation expands.
Jarred Knott, Energy Futures Project Manager at NGN, said securing Alpha funding marks a significant milestone for the project. He noted that the next phase will prioritize practical deployment strategies while addressing regulatory and planning requirements, creating a pathway for large-scale hydrogen storage that supports a flexible, secure, and low-carbon UK energy system.
Impact on Products and Chemical Commodity Prices
The advancement of the Knapton hydrogen storage project is expected to strengthen the long-term hydrogen value chain by improving storage capacity, renewable energy utilization, and energy security. Increased investment in hydrogen infrastructure could gradually boost demand for industrial gases, hydrogen production technologies, storage materials, compressors, specialty steels, and pipeline components. For chemical markets tracked by ChemAnalyst, the immediate price impact is likely to remain limited, as the project is still in the development stage. However, over the medium to long term, stronger hydrogen adoption may support demand for ammonia, methanol, industrial hydrogen, catalysts, and engineering materials, while stabilizing energy costs for energy-intensive chemical manufacturing.
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