Total decarbonisation of UK gas is vital in the next three decades if the country is to meet its emissions reduction targets.
That’s the conclusion of a report published today by independent, liberal conservative think-tank Bright Blue.
The study assesses how to decarbonize gas in the UK by increasing the supply of low carbon gases and by reducing demand for gas in the heat sector.
It also calls for new government investment and incentives for decarbonization to be an urgent priority for regulator Ofgem in its next price control framework for gas from April 2021.
Wilf Lytton, Bright Blue senior researcher and co-author of the report, said: “UK gas must be completely decarbonised during the coming three decades if this country is to meet its current and likely future legal emissions reduction target.
“But existing gas regulations that were designed decades ago, and a lack of investment and incentives, are hampering deeper decarbonisation. Now, with time running out, the government and Ofgem should approach the task of decarbonizing gas with the same fervour as it has applied to delivering low carbon and affordable electricity.
“It is an urgent priority to ensure that Ofgem’s next price control framework from April 2021 includes stronger incentives and greater investment to support deeper decarbonization.
In particular, Lytton said that Ofgem should introduce a new low-carbon gas obligation. “This will enable the UK to decarbonize the gas network at the lowest possible cost, without distorting the market and removing the need to subsidise alternatives to natural gas.”
Bright Blue wants to see incentives and requirements for gas suppliers to deliver a steadily-increasing proportion of low carbon gases into the energy mix – including biomethane, bioSNG and hydrogen.
It says the proportion of low carbon gas injected into the gas network, and the trajectory for this over time, should be consistent with meeting the UK’s current and likely greenhouse gas emissions reduction target. Compliance with, and implementation of, this new ‘low carbon gas obligation’ would be overseen by Ofgem.
It also calls for the government to introduce carbon life cycle assessment as part of public procurement procedures to drive the market for energy efficiency and renewable heat technologies in public estates. “By including green criteria as part of the standard tendering process, government estates could provide opportunities for energy efficiency measures and renewable heat technologies to gain a foothold in the market,” it states.
And it also wants the see the establishment of a new district heat network regulatory unit in Ofgem to develop suitable price controls. “This will ensure that energy consumers supplied by district heat networks have adequate protection from uncompetitive pricing.”
Energy Minister Claire Perry (pictured) today welcomed the report and said: “Through rapid progress in decarbonizing power generation, the UK has grown its economy whilst cutting carbon faster than any other country in the G7. But if we are going to build on this success, we need to get serious in tackling heat. This welcome report points to policy solutions that build on the strength of our natural gas sector where we are a world leader, and the hugely valuable assets of our gas networks.”
She added that “hydrogen and biomethane can help deliver serious climate action through our existing infrastructure, keeping consumers on board and maintaining the flexibility and resilience provided by the gas system.”
Responding to the report, David Smith, chief executive of the Energy Networks Association, said: “Britain’s extensive gas network infrastructure means that the public and the wider economy are able to access the energy they need quickly and reliably throughout the year, as and when they need it. It’s vital that we decarbonise the gas we are using so we can reach our climate change targets, whilst still being able to take advantage of those important attributes.
“Gas network operators have led the way in developing the technology we need to do that, but we need government to make a clear decision on the long-term future of Britain’s gas networks so they can continue that work. What is concerning is that the regulator is now planning to change the way they are funded due to that lack of clarity, putting at risk the progress made in recent years.”