UK gas networks seek £900m green infrastructure investment from government

Britain’s five gas network companies, Cadent, National Grid, NGN, SGN and Wales & West Utilities, are calling on the UK Government to unlock over £900 million (€1 billion) to invest in green gas network infrastructure.

The request by the Energy Networks Association (ENA) forms part of its Gas Goes Green initiative, which seeks to create the first zero-carbon gas grid in the UK. The gas network companies are calling on the government to provide the funding as part of its economic response to the COVID-19 pandemic and to kick-start the development of the world’s first zero-carbon gas grid.

The ENA has published new research showing that if investment into zero-carbon hydrogen infrastructure started today, the UK would be a net beneficiary of that investment before 2045, five years ahead of its 2050 net-zero targets, and save bill payers £89 billion (€99.2 billion) by that date.

With 85% of the UK’s homes connected to 284,000 kilometres of gas pipelines nationwide, the ENA’s Zero Carbon Commitment package sets out gas network companies’ plans to invest in projects between 2021 and 2026 under the RIIO-2 price control. The investment would be used to prepare the UK’s gas grid to switch from using methane natural gas to zero-carbon hydrogen and biomethane.

The Commitment plans to invest:

  • £446 million (€497 million) in new network infrastructure for projects that roll out the industrial use of hydrogen and domestic trials. This includes £391 million (€435 million) of investment in engineering and design work for carbon capture, utilisation and storage projects in the north-west of England, Aberdeenshire and the Isle of Grain

  • £264 million (€294 million) in ‘cross-cutting’ projects to expand the capacity of local gas networks to connect more hydrogen and biomethane generation projects, transport refuelling stations, and to ensure network operators have the correct systems in place to manage gas used by those connections

  • £150 million (€167 million) for running new, large-scale trials of domestic appliances providing hydrogen heating, cooking and transport appliances connected to the gas grid

  • £44 million (€49 million) in projects to understand how to blend an increasing amount of zero-carbon hydrogen with the natural gas currently used in the UK’s gas networks to gradually replace it.

Decisions on energy network investments are made by the UK energy regulator, Ofgem, and are dependent on government policy. Ofgem is due to decide on gas network investment in July.

David Smith, the ENA’s chief executive, said: “With the solutions to tackling climate change being as much local as they are national, we have to take the #buildbackbetter opportunity to rebalance our economy in the right way.

“As the government looks to set out its plans for the economic recovery from the COVID-19 crisis, our members are ready to play their part. We have a plan that’s ready to go. So let’s unlock the investment that’s needed and create the world’s first zero-carbon gas grid here in the UK.”

“The need for action from government has never been greater,” added Chris Train, the UK’s first Green Gas Champion and former CEO of Cadent. “Investing in the infrastructure that will ensure that homes and businesses across the country are connected to the world’s first zero-carbon gas grid is one of the best ways of not only meeting our decarbonisation targets but also ensuring that our economic recovery from the COVID-19 crisis is first and foremost a clean, green one.

“Unlocking this investment is a huge opportunity for the UK to lead the way in the fight against climate change.”

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