Gas distribution company, SGN, is proposing to give 300 homes in Levenmouth and Fife access to a new hydrogen system for 2-3 years.
The homes will have a choice to opt into the new system or use the existing natural gas network which will run alongside.
The hydrogen will be generated from offshore wind energy from water. Construction could begin early next year if the UK regulator permits.
The project is seen as a good opportunity to gather evidence and run tests for a more full rollout of a hydrogen gas network.