Production of low carbon gas

Sustainable, sufficient, secure: the challenge for green gas

 

Carbon Connect launches cross-party inquiry with MPs on the production of low carbon gas, building on recent report ‘Next Steps for the Gas Grid’.

 

Heat represents roughly one-third of the UK’s greenhouse gas emissions. But, in order to meet our targets under the Climate Change Act, it is clear that this will have to fall dramatically. The difficulty of this challenge cannot be understated: heat makes up 45% of our country’s energy consumption, the vast majority of which comes from natural gas – a fossil fuel.

 

There are many low carbon alternatives for heating, but particular attention is growing around the option to substitute natural gas in the gas grid with low carbon gases such as biogases and hydrogen.

 

The importance of the potential role that low carbon gases might play is reflected in the Government’s latest thinking on the future of UK energy. Their long-awaited Clean Growth Strategy – published last month – references low carbon gases a number of times, and in particular considers the need to:

 

“lay the groundwork this Parliament so we are ready to make decisions in the first half of the next decade about the long term future of how we heat our homes, including the future of the gas grid”.

 

But what does it mean to ‘lay the groundwork’? What steps does this involve taking? And, if it were desirable to do so, how might we move to a decarbonised gas grid while protecting energy customers and ensuring its safety?

Next steps for the gas grid

 

Answering questions such as these was the focus of our report – Next Steps for the Gas Gridpublished in early September.

 

Our report suggested that there is a need to future-proof policy in this area. There is no certainty over the role that the gas grid will play in the long-term. Some experts believe it could be the low-carbon backbone to a hydrogen economy, while others see it playing a more limited role in a diverse, decentralised energy mix. Given these uncertainties around its best use in the future, the steps we take now shouldn’t close any options prematurely.

 

Nevertheless, despite this uncertainty there is also a need to take immediate action. Government should lend their full support to policies such as ramping up efficiency measures and deploying biomethane in gas grid. One major step Government can take is to work towards a ‘demonstration’ of 100% hydrogen; many of the UK’s gas network owners are already heading in this direction. But Government should coordinate this research to attain cost-effective and rigorous evidence on the costs and implications of converting the gas grid to 100% hydrogen.

 

Finally, our report called on Government to begin thinking seriously about some of the longer-term considerations related to the gas grid. In the future, there may be a need to reform how we bill for gas use and introduce new regulation to handle new gases.

 

However, what has become doubly clear during our inquiry is that arguably one of the biggest uncertainties around the increased use of low carbon gas relates to its production.

 

Where does the low carbon gas come from?

 

There are three key challenges for producing low carbon gas:

 

  • Sustainable How ’green’ are different forms of low carbon gas?
  • Sufficient How can we make, store or import enough low carbon gas to meet UK demand, particularly during long, cold winter spells when demand for gas is at its highest?
  • Secure How can we ensure that we have an affordable supply of low carbon gas that represents good value for money to energy customers whilst also maintaining the resilience of the UK energy system?

 

In order to answer these questions, Carbon Connect is undertaking a second cross-party inquiry into this topic. Chaired by Dr Alan Whitehead MP (Lab), James Heappey MP (Con) and Alistair Carmichael MP (Lib Dem), our inquiry is going to take a critical look at where low carbon gas could come from, and how the government should be approaching policy in this area.

 

This includes answering questions about how we can improve the production methods for hydrogen and biogases and exploring what policy measures could help encourage their commercial viability. In evaluating these production methods, we also need to consider their implications for the UK’s energy security, as well as their potential to deliver on long-term decarbonisation beyond 2050 that is consistent with the Paris Agreement’s aims to reach net zero emissions by the end of the century. Moreover, there is a need to look beyond simply low carbon heat to consider the implications of decarbonisation in the transport and power sectors. For example, what challenges and opportunities do hydrogen vehicles present in terms of how and where we produce low carbon gas?

 

We will also examine how we can improve investment in low carbon gas production. At present, the non-domestic Renewable Heat Incentive – the main policy measure for deploying biogas production – will cease to operate in 2021. What should policy do to support low carbon gas production beyond the lifetime of the RHI look like, and how can we move towards subsidy-free low carbon gas production in the long-term?

 

Finally, our report will also include an investigation of the role that carbon capture, utilisation and storage (CCUS) might play in decarbonising the gas grid, particularly with regards to hydrogen production, as well as the potential for negative emissions if used in combination with biogas production. In recent years, CCUS technology in the UK has suffered from a lack of consistent support, and the Clean Growth Strategy renews the Government’s interested in kick-starting domestic leadership in this field. Our report will look at what policy is needed to support its development in the context of low carbon gas production.

 

We have just launched our call for evidence on the topic and are welcoming written submissions to input into the evidence gathered for this inquiry. The call for evidence is available online or to find out more you can get in touch with us by email.

 

Politicians in Westminster urgently need to improve their awareness on these matters if we are to find the right answers that can deliver an affordable transition to low-carbon energy. We very much hope that this second report goes some way to leading on thinking around low-carbon gas with MPs and Peers of all parties.