Greg Hilton, Partner (Energy and Infrastructure) at Carter Jonas explains why the UK’s Energy White Paper lacks specific detail.
On 14 December, the much-anticipated Energy White Paper was published.
This 170-page document intended to expand upon the Prime Minister’s Ten Point Plan for a Green Industrial Revolution by providing a roadmap of support for the industry – the destination being net-zero carbon emissions by 2050.
Whilst the six chapters of this White Paper provide a promising level of enthusiasm, we sense a lack of substantive policy commitments and indecisiveness as to how certain net-zero objectives will be met.
This is especially true in clarifying the future of the natural gas network – specifically how it will be repurposed in this colossal green energy transition.
Considering that the UK’s National Transmission System (NTS) was one of the most expansive infrastructure investments made by the UK, it would be reasonable to expect that the repurposing and decarbonising the gas network would be of utmost priority.
However, aside from mentioning the Green Gas Support Scheme, the White Paper has skirted around this issue.
The Green Gas Support Scheme (GGSS) is proposed by the Government to increase the proportion of green gas in the grid through support for biomethane injection. Biomethane is known as a ‘renewable gas’, produced through the anaerobic digestion of organic matter. It is chemically identical to methane, and therefore can be supplied directly to the NTS.
Whilst burning biomethane produces carbon emissions, the process of producing this gas replaces the need for non-renewable fossil fuels and avoids substantial greenhouse gas emissions in agriculture and farming.
This scheme is intended to replace the non-domestic Renewable Heat Incentive (RHI) programme, which provided broad financial support to renewable heat systems, and allows for the injection of biomethane into the grid. Biomethane injection is seen a very important step in substituting non-renewable, fossil fuel-intensive natural gas, and so the policy support given to the GGSS in this White Paper is definitely a step in the right direction.
But while the statements supporting the rollout of the GGSS provide a pathway for the industry to decarbonise substantially, the GGSS seems to be the only decisive policy that the Government has taken regarding the future of gas infrastructure.
Further commitments surrounding the gas network are somewhat vague, such as the call to consult on updates to the Gas Act.
The Government is said to be reviewing the overarching regulatory framework set out in the Gas Act 1995 to ensure the appropriate powers and responsibilities are in place to facilitate a decarbonised gas future, but this statement fails to clarify what this actually could mean: a change in the regulatory framework could mean anything from repurposing the gas infrastructure to carry renewable fuels, or scaling back its capacity.
Furthermore, the White Paper fails to address the longstanding dilemma of whether new homes will continue to be connected to the gas network in favour of zero-carbon alternative heating systems.
The potential future use of hydrogen takes an important step forwards in the White Paper, positioned as an emerging technology which could help decarbonise the gas grid, there are various ways in which hydrogen could contribute to decarbonisation.
Discussions with our clients support our belief that hydrogen is on the cusp of becoming a viable part of the UK’s energy sector.
In many ways, hydrogen is a very flexible ‘energy carrier’ as it can utilise electricity from intermittent sources (wind and solar) which is otherwise surplus to requirements.
It is also a means of reducing the carbon impact of gas fired appliances when added to methane within the mains gas grid, and can be used as a zero carbon transport fuel. We see the publicity and enthusiasm within the White Paper as a good sign, but this needs to be supported by solid governmental support and there is little indication of how hydrogen will deliver on its potential. So, we look forward to the publication of a Hydrogen Strategy, which is trailed in the White Paper.
The policy document provides further indications as to the direction in which the Government wishes to take to decarbonise the UK gas grid.
The case is made for the further support and we welcome specific commitments, such as the Green Gas Levy. History, however, tells us that these timescales are prone to slippage, in current times more than ever. In the meantime, costs are being borne by existing and prospective developers. What the industry needs to make these opportunities a reality, is firm policy support from Government.
That said, it is refreshing to see the development of potentially viable alternative narratives to the current ‘everything must be electric’ mantra. A greener, lower carbon gas grid, along with the huge potential of hydrogen can enable one of its biggest infrastructure investments of the twentieth century to be repurposed for the 21st century.
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