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Gas companies call for £900m investment in green gas network

Published June 10, 2020

Gas companies call for £900m investment in green gas network

Britain’s five gas network companies have called on the government to make more than £900m available for investment in green gas network infrastructure across the country to kick start the development of a zero carbon gas grid.  

The five companies – Cadent, National Grid, NGN, SGN, and Wales & West Utilities – are urging the Government to back their Zero Carbon Commitment package. The £904m investment would be used to prepare Britain’s gas grid for a switchover from using methane natural gas to zero carbon hydrogen and biomethane. Ofgem is due to make a decision on gas network investment in July.  

“The decarbonisation of the gas network could have a profound impact on heat-intensive businesses,” said Nick Fedson, a sustainability analyst at Alfa Energy. “It is going to be pretty significant for users who can’t electrify. And for domestic users, this is in some ways, back to the future. The UK’s now defunct town gas network contained large quantities of hydrogen, so it’s not a completely new technology. There are significant technical issues to deal with, of course, but hydrogen was part of the network in the past and it could be part of the net zero transition.” 

The Commitment sets out the companies’ plans to invest in projects between 2021 and 2026, under the RIIO-2 price control. The companies would like to see the investment plans tied into the UK’s COVID-19 recovery plan.  

Research published by Energy Networks Association (ENA) suggests UK ratepayers will benefit by £89bn by 2050 if a zero carbon gas grid is constructed.  

The Commitment includes plans to invest: 

£446m in new network infrastructure for projects that roll out the industrial use of hydrogen, as well as domestic trials.  

£264m in ‘cross-cutting’ projects that will expand the capacity of local gas networks to connect more hydrogen and bio-methane generation projects, transport refuelling stations, and ensure network operators have the right systems in place to manage the gas used by those connections. 

£150m for running new, large-scale trials of domestic appliances providing hydrogen heating, cooking and transportation appliances connected to the gas grid, starting in controlled environments, before moving on to unoccupied and finally occupied premises. 

£44m in projects to understand how to blend an increasing amount of zero carbon hydrogen with the natural gas currently used in our gas networks, to gradually replace it.