Chief executive’s view: “Nobody likes us” – should we care?

The obsessive pursuit of an all-electric future ignores a key tool in solving the energy trilemma: gas.

There are times when it seems the whole world is against you – social media posts proclaiming the future is all-electric (renewable of course); news broadcasts on the latest new smart gadget that will solve the world’s problems, the latest think-tank or consultant’s report suggesting that gas should be banned from people’s homes. It feels like being under siege because frankly, we are. The gas industry is charting a viable way forward to meet the energy trilemma – affordable energy, secure supplies, and low carbon – but it is one that doesn’t fit the outdated narrative or fundamentalist view of our detractors.

So why does it feel like we are in the wrong? Well, let’s start with what we know. The vast majority of homes in the UK have their heating and hot water needs met by gas, 85 per cent in fact, so it’s simply a huge market for others to try and capture. It’s market economics. Gas provides half of UK homes with their cooking needs too, a point often overlooked.

As a fuel, gas is flexible because it can be stored cheaply for when demand is there. This benefit proved its value last year when the Beast from the East hit. On 1 March local gas demand was 214GW; the day before, between 5am and 8am, consumption increased by 116GW. To put this number into perspective, peak electricity supply over the 2017/18 heating season was just 53GW with the highest 5am to 8am being a paltry 16GW. Peak energy demand should drive policy, not obsessive devotion to unsuitable technologies. So when the all-renewable electric zealots talk down gas in favour of electricity, one word is all that is needed: “Really?”

And gas is relatively cheap too. I find it amusing when I hear energy supplier chief executives suggesting gas has a limited future. To paraphrase a well-known put down, “what was it about supplying electricity at 15p per kWh, compared to gas at 4p that first attracted you to an all-electric future?”

But what about the consumer? Energy bills are a hot topic. While gas is relatively cheap, for some in fuel poverty, overall bills are a real concern. The average household electricity bill is now higher than their gas bill. Fuel poverty is growing, with nearly four million households in the UK currently classed as fuel poor, and a further one million within £100 of becoming fuel poor. Here gas is playing a key role, via Ofgem, in delivering the Fuel Poor Network Extension Scheme – connecting fuel poor homes to gas as a means of tackling fuel poverty. So my challenge to the anti-gas obsessives is, what is your alternative?

Natural gas is a fossil and when combustion takes place it does give off carbon. So yes, this needs to be addressed. And it is no surprise to me, but clearly an irritation to some, that the gas industry is navigating a pathway to decarbonise. First, with the condensing boiler, reducing emissions and bills, and reaching 60 per cent market saturation. No surprise that domestic carbon emissions have fallen 16 per cent (28 per cent per capita) since 1990.

Biomethane injection into the gas grid, using green gas to heat homes and also fuel HGVs, delivers further carbon reductions (in the case of HGVs, some 85 per cent compared to diesel). Blending hydrogen into the grid, as demonstrated by the HyDeploy project at Keele, is frankly a no-brainer. Subject to meeting health and safety requirements, I suspect this will roll out quickly. Another chunk of carbon saved.

Combining gas boilers with renewable alternatives, as demonstrated by Project Freedom, offers up options that are worthy of further consideration. But the real prize, and where the momentum is now, are hydrogen gas networks. Delivering carbon-free gas (from excess renewable electric or with carbon capture and storage) and using existing network infrastructure is a cost-effective decarbonising route. Boiler manufacturers have already developed hydrogen-compatible appliances, so consumer disruption would be minimised. And this is why nobody seems to like us. Our industry is delivering for consumers now and is planning for their future. They are who really matter and that is all we should care about.