On 20 August, National Grid Gas (NGG) held an online webinar, A Roadmap to Net Zero, outlining the steps it is taking to decarbonising its network. It identified the requirement for hydrogen development in order to ensure a timely reduction in its associated energy emissions.
Antony Green, NGG Project Director for Hydrogen, opened by outlining the 63% emissions reduction seen in the power sector thus far through shifting from coal to natural gas. He noted the need to decarbonise this further, highlighting hydrogen as an option. In its 2020 Future Energy Scenarios (FES), National Grid anticipates a reduction in total energy consumed across all four scenarios. Of these scenarios, Steady Progression is the only one to not incorporate hydrogen and not meet net zero.
Through undertaking a 100% electrification approach, the pace of change would need to be rapid at an anticipated 15,000 homes per week (see Figure 1). As a result, NGG anticipates that hydrogen will have a part to play and outlined key enablers it is focusing on to permit this, including:
- Safety – improving consumer acceptance
- Innovation – through hydrogen trials and R&D
- Learning from others – especially internationally
- Collaboration – incorporating whole systems thinking and working across sectors
Danielle Stewart, Long Term Strategy Manager, discussed NGG’s roadmap, commitments and actions to enable hydrogen and net zero.
Key commitments outlined include being ready to start conversion to hydrogen by 2026, facilitating the use of green gas and taking a consumer first approach to ensure a fair and just transition.
Actions to meet these commitments include its Gas Goes Green workstream which is made up of six workstreams; investment, gas quality and safety, consumer options, system enhancement, hydrogen transformation and communication and stakeholder engagement. Stewart also announced development of NGG’s hydrogen transformation plan and separately its outlook on decarbonisation of transport, as well as consideration of hydrogen as part of its Gas Market Plan (GMaP). Its Hydrogen Programme Development Group was highlighted as focusing on safety and network impacts, integrated hydrogen (consumer) trials and system transformation through technical, economic, market and operational impact assessments. It is also continuing work with hydrogen feasibility studies through its HyNTS workstreams.
It outlined three funding mechanisms including its baseline funding, RIIO-2 Ofgem innovation funding and reopeners. Innovation funding as part of RIIO-2 includes a Strategic Innovation Fund (SIF) which is a new mechanism allowing for £450mn across the whole of RIIO-2 (Ofgem’s system for price controls for gas distribution and gas and electricity transmission) with a minimum spend of £5mn to enable large-scale innovation. Another funding mechanism includes the Network Innovation Allowance (NIA) providing a lump sum for utilisation throughout RIIO-2 to enable flexibility. However, Ofgem’s proposal of approximately £20mn falls below NGG’s request for around £30mn. Other funding mechanisms it will consider include BEIS, Innovate UK, National Grid Partners and Business as Usual. The Net Zero and Heat Policy reopeners were outlined by NGG as options to enable additional funding. However, the Net Zero reopener can only be triggered by Ofgem which NGG argues may be restrictive and lead to a reduction in allowances. The Heat Policy reopener is expected to be effective in responding directly to policy decisions on the future of gas and heat in respect of gas distribution, but NGG feels this should be applied to gas transmission too.