Recommendation 6

DESNZ’s work to test hydrogen for heating has been beset with problems, with key trials cancelled. DESNZ has committed to deciding on the role of hydrogen for heating in 2026. Major trials intended to support its decision have been cancelled or delayed due to local opposition and insufficient supply of hydrogen. It has not tested the role of hydrogen in non-domestic properties. At the time of our evidence session in April 2024, an announcement on a successful bidder for a hydrogen town, planned for the end of this decade, had been delayed by 13 months. Since then, DESNZ has announced that it will not progress work on a hydrogen town pilot until after 2026, thereby meaning information on the pilot will not feed into its decision on hydrogen’s role due in 2026. Overall, this absence of the evidence needed to support any decision is also creating uncertainty for industry to plan and invest on a wider scale and could hamper overall progress. Early planning for any decommissioning of the gas networks, if it is decided that hydrogen has a limited role and electricity becomes the main energy source, is vital to manage costs that we have seen passed to the taxpayer with decommissioning in other sectors, such as nuclear, and oil and gas. Recommendation 6a: DESNZ should, as part of its Treasury Minute response, set out how it will test hydrogen for different types of properties, including domestic and non-domestic properties, so it can make an informed decision on the role of hydrogen for heating. Recommendation 6b: DESNZ should, by end-June 2025, set out how it will undertake any required decommissioning of the gas networks, including how it will be funded.