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A pioneering hydrogen storage project in North Yorkshire has secured £500,000 from Ofgem’s Strategic Innovation Fund, positioning the retired Knapton power station at the heart of a new “green energy hub” for flexible, low-carbon power generation.
Image: Ceraphi Well Pad With a Rig, Dril baby drill
The Knapton power station in the Vale of Pickering stopped generating electricity in 2019 and was later acquired by Centrica in 2023. Centrica’s vision is to repurpose this former gas-fired plant into a green energy hub that can support low-carbon peaking power stations—facilities that only run when electricity demand and prices surge. This shift reflects a broader UK trend: instead of building entirely new sites, companies are reusing existing infrastructure to accelerate the energy transition while reducing costs and planning hurdles.
This hasn't been the first we pointed out geological hydrogen as the next geothermal gem we saw this before of course companies are already drilling for lithium whilst it's soul satisfying to see entrants into hydrogen already.
Those peaking plants will increasingly rely on clean fuels such as hydrogen to supply short bursts of power, helping to balance the grid as wind and solar fluctuate. However, without dedicated hydrogen storage on site, Knapton’s ability to provide that flexible, seasonal support is “fundamentally constrained”, as Centrica’s Chris McClane warned in 2025. The new Ofgem-backed project is designed to remove that constraint.
The project is led by Northern Gas Networks (NGN), one of the UK’s gas distribution companies, which already plays a major role in hydrogen trials and grid innovation. NGN has assembled a specialist consortium that brings together geological, technical and system expertise:
British Geological Survey (BGS), providing subsurface and reservoir analysis for hydrogen storage.
Ceraphi Energy, a clean energy developer with expertise in repurposing wells and subsurface assets.
National Gas, the owner and operator of the UK’s gas transmission system, responsible for integrating new storage with the wider grid.
The University of Edinburgh, with strong research capabilities in underground gas storage and hydrogen behaviour.
Wales & West Utilities, another regional gas network that can help replicate successful solutions across different parts of the UK.
By combining these partners, the project aims not only to design a storage site for Knapton, but also to create a blueprint that can be applied elsewhere in the UK where suitable geology exists.
Northern Gas Networks highlights the Vale of Pickering in North Yorkshire as having a “fantastic diversity of geology” for hydrogen storage. This area includes several subsurface formations known to be promising for storing gases:
Depleted hydrocarbon reservoirs, where oil or gas was previously produced and the remaining pore space can now be used to hold hydrogen.
Porous rock aquifers, which can act as large, sponge-like formations capable of storing pressurised gas in water-bearing rocks.
Salt deposits, which can be leached to form caverns that are especially well suited for high-pressure gas storage.
Each geological option has trade-offs in terms of cost, capacity, deliverability and monitoring complexity. For example, salt caverns are favoured for fast cycling and high safety margins but can only be constructed where suitable salt formations exist. Depleted gas fields and aquifers are more widely available but require detailed modelling to manage pressure changes and potential reactions between hydrogen and the rock or residual fluids.
The diversity at Vale of Pickering means the project team can compare several storage concepts side by side and select the most effective technology for Knapton’s needs.
The award of £500,000 comes from Ofgem’s Strategic Innovation Fund (SIF), which backs forward-looking projects to modernise the UK’s energy networks. In this latest round—the fifth SIF call—Ofgem distributed £22.9 million across 18 projects, including work on shared ownership of generators and mapping quantum cyber-attack risks to the grid. Within that portfolio, the Knapton hydrogen storage study stands out as a crucial enabler for flexible, low-carbon power delivery.
This £500,000 follows earlier SIF funding of around £150,000 that supported a feasibility study at Knapton last year. The new award effectively moves the project from early concept towards a proof-of-concept design, with more detailed engineering, geological modelling and commercial evaluation. According to Marzia Zafar, Ofgem’s deputy director for digitalisation and innovation, these awards are meant to accelerate “bold, scalable solutions” that deliver tangible consumer benefits and support the transition to net zero.
For developers and network operators, SIF funding fills a critical innovation gap: it allows them to explore high-potential technologies that are too early for full commercial investment, de-risking them before larger private or public capital is deployed.
Centrica’s vision for Knapton is to use hydrogen to fuel nearby peaking power stations, enabling rapid response when the grid needs extra power—such as during cold evenings when demand spikes and wind output drops. Hydrogen-powered turbines or engines can ramp quickly, much like traditional gas plants, but with lower lifecycle emissions when the hydrogen is produced from low-carbon sources.
Dedicated hydrogen storage near these plants is essential for several reasons:
It ensures secure, on-demand supply regardless of short-term pipeline constraints or upstream hydrogen production variability.
It allows operators to store hydrogen whenever it is cheap or plentiful (e.g., during periods of high renewable generation) and use it later during peaks.
It offers seasonal balancing potential, helping the system bridge long winter periods where demand remains high.
Without on-site storage, Knapton would remain dependent on real-time hydrogen flows, limiting the volume of power it can dispatch and its value to the grid. The new project aims to size and design an underground storage facility that can align with local peaking plant capacity and wider network needs.
Storing hydrogen underground is not as straightforward as storing natural gas, even though both are gases used for energy.
Hydrogen molecules are smaller and more reactive, which raises several technical challenges:
Containment and leakage: Reservoirs and wells must be assessed and, if necessary, retrofitted to ensure hydrogen does not migrate to undesired zones or escape to the surface.
Geochemical reactions: Hydrogen can react with minerals or residual hydrocarbons in the reservoir, potentially changing the rock’s properties or affecting purity.
Cushion gas and cycling: Like natural gas storage, a portion of gas remains permanently in the reservoir as cushion gas to maintain pressure, which affects usable capacity.
The involvement of the British Geological Survey and University of Edinburgh signals that the Knapton project will place significant emphasis on understanding hydrogen behaviour in specific local formations, simulation of long-term operations, and monitoring techniques to track gas movement and integrity.
Lessons from related projects, such as EMstor in the East Midlands—which also uses Ofgem funding to study geological options for hydrogen storage—will likely inform best practices for site selection, risk assessment and regulation.
Knapton is not an isolated effort; it fits within a growing national focus on hydrogen storage as a backbone of the future energy system. Several trends help explain why geological hydrogen storage is receiving increased attention:
Regional hydrogen pipelines: Projects like Cadent’s planned 100% hydrogen pipeline in the East Midlands require nearby storage to manage industrial and power generation peaks.
Grid-scale resilience: Hydrogen stored underground can act much like large battery banks on a seasonal scale, providing energy resilience during extreme weather or supply shocks.
Industrial clusters: Major industrial regions, such as Teesside or the Humber, will need local hydrogen storage sites to supply refineries, chemical plants and steelworks.
Ofgem and Innovate UK have been using SIF to catalyse these developments, funding multiple feasibility studies that map geological potential, design storage technologies and integrate them with transmission and distribution networks.
Knapton’s proof-of-concept aims to show that repurposing an existing power station site can deliver both local and system-wide benefits.
While the Knapton hydrogen storage study is highly technical, its ultimate goals are straightforward: lower emissions, lower long-term costs, and greater reliability for consumers. Underground hydrogen storage gives grid operators more tools to avoid expensive emergency measures, such as firing up older, high-emission plants or importing premium-priced electricity.
By supporting hydrogen-fuelled flexible generation, Knapton can:
Enhance the integration of renewables by smoothing out variability and making better use of surplus wind and solar.
Reduce reliance on unabated gas during peak periods, cutting greenhouse gas emissions and air pollutants.
Strengthen regional energy security in North Yorkshire by providing a local buffer of clean fuel.
As Ofgem’s Marzia Zafar emphasises, projects in this SIF round are chosen for their potential to deliver “tangible benefits for consumers” while aligning with the UK’s net-zero pathway. If successful, Knapton could become a model for retrofitting other retired thermal sites into hydrogen-ready flexibility hubs.
Following the earlier feasibility work, the new £500,000 award marks the proof-of-concept phase for Knapton’s underground hydrogen storage. Over this stage, the consortium will refine:
Geological modelling and selection of the preferred storage formation or combination of formations.
Engineering design of wells, surface facilities and integration with nearby peaking power stations.
Regulatory, safety and monitoring frameworks that meet UK standards for underground gas storage and future hydrogen-specific rules.
If the results validate technical and commercial viability, the project could progress towards a demonstration phase with larger capital investment, similar to how other Ofgem-backed hydrogen storage concepts have moved from desktop studies to pilot projects. That journey—feasibility, proof-of-concept, demonstration, then full deployment—is typical for complex infrastructure, but SIF support is intended to shorten timelines and de-risk innovation.
The Knapton project illustrates a key point about hydrogen’s role in the energy transition: production alone is not enough; storage and system integration are crucial.
Without cost-effective hydrogen storage, the UK’s plans for hydrogen-powered industry, heating and electricity could struggle to deliver reliable and affordable energy.
By focusing on geological storage near a real-world site with planned peaking stations, Ofgem and the project partners are testing a practical configuration that can be replicated. It aligns infrastructure reuse, geoscience and power system needs rather than treating hydrogen storage as an isolated technology. For policymakers and investors, the project’s outcomes will offer valuable evidence on how to turn promising geology into bankable, grid-connected assets.
If Knapton delivers on its promise, it will demonstrate how a retired gas plant in North Yorkshire can become a cornerstone of the UK’s hydrogen-enabled net-zero grid—balancing local flexibility, national resilience and consumer value through dedicated underground hydrogen storage
Image: schematic diagram description
Related: CeraPhi Energy to Quietly Heat 460-Year-Old Kentwell Hall with Invisible Deep Geothermal
Source : The Chemical Engineer
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