Laid out, end-to-end, Britain’s 178,000 miles of gas pipes would stretch seven times around the world. They have been installed over decades at a cost of billions of pounds, supply 85 per cent of UK homes with the means to heat and cook and, in just over a quarter of a century, the vast majority should be scrapped.
That was the conclusion this month of the government’s independent infrastructure adviser. The National Infrastructure Commission said that decarbonising Britain’s energy system should render gas distribution networks obsolete and that ministers should plan to decommission them.
Britain has nearly 5,000 miles of high-pressure gas transmission pipes, operated by National Gas, supplying power plants and industry and feeding into distribution networks. The 173,000 miles of lower-pressure pipes mainly supply homes and businesses and are operated by Cadent, Northern Gas Networks, Wales & West Utilities and SGN.
Homes cannot continue to burn natural gas unabated if Britain is to meet its 2050 net zero emissions goal, but gas distribution networks believe that their pipes should be converted to carry clean-burning hydrogen that can be used for heating and cooking instead.
The infrastructure commission disagrees. Its report was unequivocal that “electrification is the only viable option for decarbonising buildings at scale, getting the UK back on track to meet its climate targets and lowering energy bills”. It found that an energy system with significant hydrogen for heating would cost an extra £385 billion between now and 2050 than one without, and that the use of hydrogen for home heating should be ruled out.
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Electrifying heating primarily means using heat pumps, which extract warmth from the air. According to Nick Winser, of the infrastructure commission, “if you take one unit of green electricity and you convert it to hydrogen and then burn it in a home, you get half a unit [of heat]. If you take one unit of green electricity and you put it through a heat pump, you get three units of heat. It’s six times more efficient.” Britain, he said, “can’t afford” to ignore this efficiency when it’s “going to be really short of genuinely green energy for as far as the eye can see”.
Indeed, using hydrogen to heat buildings is “one of the lowest-priority use cases for hydrogen”, given limited green supplies of the fuel, according to Chris Stark, chief executive of the Climate Change Committee, the government’s climate adviser.
For the network companies, though, making the case for it is existential. In Stark’s view, “the future of gas distribution networks depends entirely on the extent of hydrogen use in buildings”.
The networks’ response to the National Infrastructure Commission has been predictably strong. “I just don’t think it’s plausible,” said Angie Needle, deputy chief executive of Cadent, which operates about half of Britain’s distribution pipes. “The infrastructure is not there to deliver full electrification, whereas the gas networks already exist today.”
She argued that the commission had neglected the challenges with heat pumps, underestimating “the cost and the disruption to invest in the electricity infrastructure”, especially since electricity cannot easily be stored for long periods for use in the depths of winter in the way that gas can.
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“When you have a ‘Beast from the East’ storm coming through, the capacity that you would need in the electricity network would be unbelievable,” Mark Horsley, chief executive of Northern Gas Networks, said. “I find it quite frustrating when we have this myopic view of saying, ‘It’s all to be electrified.’ There’s no silver bullet in terms of decarbonising heat. We are going to need everything.”
Although heat pumps “have a massive role to play”, Horsley said their proponents were ignoring the constraints of Britain’s housing stock. Many homes lack the space for a heat pump or hot water tanks and have inadequate insulation. The infrastructure commission has cited analysis that 90 per cent of homes could be suitable for a heat pump with little or no extra insulation, but Mark Wild, the chief executive of SGN, reckons “there’s at least 12 million houses that have no path to decarbonisation with a heat pump”.
However, home heating accounts for only about a third of UK gas usage. The rest is burnt by power plants and industrial and commercial customers. Some of these are expected to continue burning natural gas with technology to capture carbon emissions; others are expected to switch to hydrogen.
Both the National Infrastructure Commission and the Climate Change Committee envisage a continued role for at least some of Britain’s gas transmission pipes to keep supplying gas or to carry hydrogen or carbon dioxide. “The majority of our network will be 100 per cent hydrogen and there’ll be specific pipelines going to the biggest power stations and industry that will be taking natural gas and bringing carbon away,” Jon Butterworth, chief executive of National Gas, said.
But not all gas-guzzling businesses are connected to National Gas’s transmission pipes and the networks say the commission has paid insufficient attention to those reliant on distribution pipes. Chip shop owners have told Horsley “there’s no electric option for them for how they do the frying”; cement, fertiliser and ceramic producers all require gas of some sort, according to Wild. “The heat intensity is such that there is no way to electrify.” That’s one reason why Wild believes his network will “still be intact” in 2050.
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Some of his peers are more cautious. Needle “fully expects there to be an impact on our network”. Horsley “accepts a large proportion of our network could be stranded”.
A decision on the role of hydrogen for heating is promised by 2026. A government spokeswoman said that the gas network would “always be part of our energy system, playing a role in transporting hydrogen, carbon dioxide and biomethane across the country and heating our homes for decades to come”. However, she added that “the extent of these networks will depend on the ever-changing nature of the energy landscape”.
Easier said than done
If some or all of Britain’s gas networks are indeed to be decommissioned, it raises huge practical questions (Emily Gosden writes).
One is what becomes of the pipes. Nick Winser, of the National Infrastructure Commission, says it would be “very sensible to look at repurposing” them, although discussions about potential uses, such as cabling or heat networks, are at an embryonic stage.
“Nobody has decommissioned gas networks at scale, so it’s new territory,” Angie Needle, of Cadent, said. If they could not be repurposed, “you would have to take out the gas from the pipes to make them safe” and “you have to grout especially the larger-diameter pipes because they can collapse over time”.
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Then there are questions of money. Richard Lowes, a senior associate at the Regulatory Assistance Project, an energy not-for-profit group, warned recently that “there are large financial liabilities associated with the gas grid, related to stranded assets and decommissioning costs. Little thought is being given to them or how they should be managed.” Gas networks argue the commission has underestimated the likely costs of decommissioning.
There are also the costs of running the gas networks until then. The companies are remunerated for their work over 45 years via levies on gas bills, yet a switch to heat pumps could lead to the number of customers paying such bills shrinking rapidly to zero.
Needle said the government would have to intervene to ensure that companies were paid in a fair manner, as well as covering things such as pension liabilities. Mark Horsley, of Northern Gas Networks, said that there would need to be “conversations with the regulator about accelerated depreciation, what those asset values are, compensation — but they haven’t started yet”.
The government insists it is working with the industry and the regulator to understand potential scenarios and their implications, including questions about decommissioning. Doing so must be a priority, said Winser: “This debate needs to start now, so that we can have an orderly transition, both from an engineering perspective and from an economic perspective.”
