On Friday 14 November, Ofgem announced an additional £107 million of funding for two new projects, adding to £57 million confirmed in June for Project Union: East Coast.  

Together, these investments will unlock the development of more than 50% of National Gas’ proposed core hydrogen network, known as ‘Project Union’, into the detailed engineering design phase.

Project Union seeks to repurpose existing natural gas pipelines, and build new pipelines where required, to create up to a 1500-mile new core hydrogen network for Britain.  

The two new projects will lay the groundwork to connect regional hydrogen industrial clusters in the North of Scotland, including Grangemouth, and the North East and North West of England. Funding for the East Coast section was announced in June and will connect critical industries across Teesside and the Humber region. 

Ian Radley, Chief Commercial Officer at National Gas, said: 

“This is a hugely significant moment for Britain’s hydrogen journey. With Ofgem’s support, we’re moving from discussion to delivery – taking significant strides towards building Britain’s core hydrogen network.”   

“Project Union will unlock significant investment, create a critical pathway for hard-to-electrify heavy industries to decarbonise, and safeguard jobs - all while advancing the Government’s clean energy ambitions and strengthening Britain’s energy security.  

“Hydrogen will sit alongside electrification as a vital part of a cleaner, more resilient energy system – and this funding shows that future becoming a reality.” 

The need for a core hydrogen network was clearly identified by the Climate Change Committee, the Second National Infrastructure Assessment and in the Government’s Hydrogen Transport and Storage Networks Pathway. 

Early analysis commissioned by National Gas indicates that Project Union could support around 3,100 jobs at peak construction and deliver £300 million in annual direct gross value added (GVA) to the economy.  

Project Union will enable access to cost-effective, low-carbon hydrogen across the Great Britain, helping decarbonise industry, power generation and transport, while bolstering Britain’s energy security. 

As the UK accelerates investment in electricity networks, this announcement demonstrates that hydrogen transport and storage infrastructure is also moving forward - complementing electrification and ensuring the UK has a diverse, resilient, and secure energy system for the long term. 

By linking hydrogen production with end-use demand in industrial clusters, the project will help attract private investment, drive innovation, and develop new regional skills in engineering, manufacturing, and clean-energy services.  

The announcement reflects Britain’s ambition to build world-class hydrogen infrastructure - supporting up to 10 GW of low-carbon hydrogen production by 2030 and a sector capable of delivering tens of thousands of jobs and billions in annual economic value.  

By progressing Project Union, Ofgem and National Gas are taking a crucial step towards building Britain’s core hydrogen network which will connect hydrogen producers, storage, and consumers across key regions, unlock industrial decarbonisation at scale, and strengthen energy security and flexibility within the UK’s future net zero system. 

Energy industry widely welcomes major Project Union milestone

Brett Ryan, Head of Policy and Analysis at Hydrogen UK, said: 

"Ofgem's decision to fund a further two of National Gas' Project Union projects is excellent news for the hydrogen industry and a major boost to the UK's hydrogen future. It marks a significant step in the development of key hydrogen transmission pipelines in the North West and linking St Fergus to Teesside. 

"This funding underscores the crucial role hydrogen will play in the UK's energy mix and in delivering economic growth across the country. We look forward to seeing the projects develop and showcase hydrogen's potential for supporting UK energy infrastructure." 

Nigel Holmes, CEO, Hydrogen Scotland, said: 

“The decision by Ofgem on FEED funding for Project Union Teesside to St Fergus is a critical step towards establishing the UK’s core hydrogen network. The new hydrogen pipeline connection from Teesside will enable connections between large scale hydrogen production across Scotland and the increasing hydrogen demand from industry and responsive power generation throughout the UK.

“The proposed Project Union core hydrogen network will provide resilient energy infrastructure for making, moving, storing, and using hydrogen as an integral part of a low carbon energy system which provides cost effective energy security for Scotland and the UK. Members of Hydrogen Scotland look forward to hearing more about Project Union Scotland and providing input to National Gas for development of the FEED study.” 

Nick Stapley, Hydrogen Business Development Manager, RWE Generation, said: 

“RWE supports Ofgem’s decision in awarding FEED funding to National Gas for Project Union: St. Fergus to Teesside and Project Union: North West projects. These projects are crucial in connecting the large important industrial clusters of HyNet, Teesside and Grangemouth and additionally, key offtakers and inland industrial regions alongside the pipeline routes. 

“RWE’s view is that a hydrogen backbone pipeline network is essential and necessary for an inclusive and successful hydrogen economy. Enabling the connection between hydrogen production, demand and storage, plus other distribution networks, creates a landscape for hydrogen uptake to be accelerated; it is inclusive for all hydrogen offtakers irrespective of size and geography.” 

Gavin Catto, CEO of Scotland-based green hydrogen project developer, Green Cat Hydrogen, said: 

“This is a valuable step towards facilitating the transport of green hydrogen from supply centres to demand centres. System benefits can then be realised by utilising otherwise curtailed and/or constrained renewable generation in Scotland, and making the resulting green hydrogen available to high energy demand centres like Teesside. There, it can effectively decarbonise hard-to-electrify industries. Projects like these will help establish Scotland - and the UK - as global leaders in the green hydrogen economy, encouraging investment and creating high skilled jobs.” 

Matt Hindle, Head of Net Zero and Sustainability, WW Utilities, said:

"We welcome the news that National Gas have been awarded £164 million in funding from Ofgem for the next phase of Project Union. The North West leg of the project supports WWU's proposed HyLine Gogledd, a dedicated 35km hydrogen pipeline in North Wales. HyLine Gogledd would stretch from Deeside to Wrexham, enabling local industries to access hydrogen at scale - in turn supporting their decarbonisation aims, especially where alternative technologies aren't suitable.

"Our regions and industries need to the right options to reduce emissions and develop economically, with joined up plans to unlock these benefits. Support from the development of Project Union will help HyLine Gogledd deliver the North East Wales Industrial Decarbonisation Plan and Local Area Energy Plans. By connecting dispersed industry with GW-scale low-carbon hydrogen production by 2035 it could remove up to 27MtCO2/y of emissions, which will be critical for the region's net zero aims."  

Tony Green, Chief Strategy and Regulation Officer, SGN, said: 

“This is a significant milestone for Project Union, which presents a real opportunity to support both Scotland’s and the wider UK’s decarbonisation ambitions while harnessing Scotland’s natural assets. Transmission scale hydrogen transportation to key industrial regions complements SGN’s broader hydrogen infrastructure strategy, strengthening the foundations laid through our Local Transmission System project (LTS Futures) and advancing our FutureForth2 initiative to decarbonise the Central Belt industrial cluster. Together, these initiatives will help retain and create high quality jobs in Scotland and drive sustainable growth across the Scottish economy."  

Don Harrold, Director Hydrogen, Statera Energy, said: 

“Ofgem’s decision to fund the next phase of Project Union Scotland marks an important milestone in establishing a national hydrogen network that will strengthen energy security, cut carbon emissions, and enable large-scale, cost-effective hydrogen production and storage.

“The creation of a dedicated hydrogen transmission system gives projects like Statera’s 3GW Kintore Hydrogen a clear route to deliver green hydrogen to industrial clusters and flexible generation sites, helping to reduce wind curtailment and support UK jobs and growth. We look forward to further collaboration with National Gas as both projects progress.”

Lawson Steele, Haldane Energy CEO, said: 

“We welcome Ofgem’s decision to support Project Union’s FEED study for the St Fergus to Teesside pipeline - an important milestone in the UK’s journey toward a robust hydrogen ecosystem. This project is not only poised to deliver meaningful impact both regionally and nationally, but also plays a vital role in unlocking the value of Scotland’s abundant renewables, enabling the production of low-cost hydrogen. It’s inherently connected to the next phase of the energy transition, and we’re proud to be collaborating with National Gas to help shape that future.”

Note: The figures quoted in this article are adjusted for inflation to today’s prices. The Ofgem Final Determination funding awards are in 18/19 prices.