Jonathan Stern | Future of Gas

A possible future for gas in the UK

Professor Jonathan Stern on how gas could support decarbonisation

There has been significant discussion of how best to decarbonise European fossil generation and heat sectors but limited progress towards achieving this goal.

UK and Continental European governments have tended to focus more on massive deployment of renewables in the power sector, and large scale deployment of heat pumps in the heat sector, suggesting that gas may be largely (or completely) phased out of the energy balance. There has been little progress towards carbon capture and storage (CCS) as a decarbonisation option by either European governments or the gas community.

Among European countries, the UK is one of the largest natural gas markets in Europe, and has at least three favourable features which could facilitate development of CCS:

  • an onshore transmission and distribution network that covers a significant part of the country, which is suitable for conversion to hydrogen;
  • a large number of offshore structures – including many depleted fields – which are suitable for carbon storage, and pipeline infrastructure leading from the shore to these structures;
  • a heat sector dominated by gas-fired boilers which could be converted to burn hydrogen.

Organising cooperation between different corporate entities in the gas sector (producers and exporters, suppliers and traders, generators, network and storage owners) has proved a major barrier to CCS development. A possible configuration would be that gas arriving in the UK could be decarbonised (by steam reforming) to produce hydrogen at the shore terminals which current receive and process gas. The carbon could then transported back offshore for injection into appropriate offshore structures. The hydrogen could be purchased by supplying companies and sold to customers, through the existing gas network, for heating and cooking using existing appliances (with some modification). This solution has the virtue of ensuring that existing network infrastructure continues to be utilised and, as far as the heat sector is concerned, may be lower cost than other possible decarbonisation options.

This route to an extensive hydrogen infrastructure would also provide an opportunity for gas-fired power plants and also road transport to be decarbonised. The commercial aspects of such transactions would be complex – given the costs related to: hydrogen production, offshore and onshore networks, storage structures, power plants, industrial furnaces and household appliances. But an advantage would be the potential for many of the commercial actors currently involved in the gas chain to be incentivised to play important roles in the transition. Recent research suggests that, for the heat sector, the hydrogen solution may be lower cost than other decarbonisation options.

The reason for advancing the potential of the UK is to illustrate that (what has become) a fragmented gas industry (due to the liberalisation of the sector) could have an interest in collaborating in a decarbonisation transition which could offer gas – and the very large existing network and appliance asset base – a significant role in the energy balance beyond 2030, and potentially beyond 2050.

*this is an excerpt from the author’s paper: The Future of Gas in Decarbonising European Energy Markets: the need for a new approach, to be published by the Oxford  Institute for Energy Studies (OIES) in January 2017.  The author  founded the OIES  Natural Gas Research Programme in 2003 and was its Director until October 2011 when he became its Chairman and a Senior Research Fellow, he became Distinguished Fellow in October 2016.