ENA split reveals sector fault lines

The decision by Great Britain’s gas networks to depart from the Energy Networks Association (ENA) was probably inevitable. It was really only a matter of a trigger point.

The ENA has had to tread a difficult line for a number of years now in representing two diverging viewpoints on the energy transition.

For the gas sector the role of hydrogen, particularly in home heating, has become an existential question. As a result the networks have had to emerge from behind the boiler to take their message direct to the politicians and the public. Recent months have shown how difficult this transition is proving.

In electricity there is the opposite problem. No one has any doubt these networks will have a future role – but there are fundamental questions about the likely scale of demand and speed of change. As with the gas companies, electricity networks must take an increasingly public role and are desperate for more clarity on the UK’s net zero journey so they can prepare for their responsibilities. For them the threat is not about becoming obsolete but being seen as blockers to the energy transition.

When it comes specifically to decarbonosation of heat, distribution network operators (DNOs) insist they are technology agnostic (as companies as least, if not always as individuals). But clearly they have everything to gain from a majority role for electricity and little stake in a hydrogen-heavy solution. This has led to increasing frustration from gas networks that DNOs appear to be paying only lip service to a truly whole systems approach.

Conversely, senior figures in electricity have had mounting concerns about the need to shoe horn references to hydrogen into responses to every government announcement.

And in the middle sits the ENA, the eternal peacemaker.

This delicate truce has endured for the past few years but seems to have fractured following two points of tension in recent months. The first was the prime minister’s revised approach to net zero, outlined in September, during which he raised the value of grants available for heat pump installations from £5,000 to £7,500. As I understand it this created a schism among the electricity and gas networks as to whether the ENA should publicly support the move or not.

Then a month later came the National Infrastructure Commission (NIC)’s five-yearly assessment, which was unambiguous that there was “no public policy case” for hydrogen to be used to warm individual buildings and that electrification should be the “exclusive focus” for decarbonisation of heat.

Coupled with some unhelpful comments from energy minister Lord Callanan on green gas and continued uncertainty over the proposed hydrogen village pilot in Redcar, the gas networks appear to have decided that now is the time to separate from their electricity peers and make an unfettered defence of hydrogen.

Sources within electricity networks tell me they were keen for the group to stay united, arguing that there was strength in numbers. However, the gas networks clearly felt that with an election year looming they needed to take control of their own narrative. A compromise was agreed that the gas members would remain until the end of 2024 and complementary statements were duly drafted.

It is not expected that the gas companies will create a new trade body, instead they are likely to build on the collaboration already evident across the sector. Meanwhile, the electricity networks remain committed to the ENA, which would seem to have opportunities to expand further into the evolving eco system around energy flexibility in future.

So, what can we expect next? According to the ENA’s carefully crafted statement on Monday, not much. The association’s membership remains unchanged until the end of 2024. However, it seems fanciful that the gas networks will be content to see out this crucial election year without ramping up their communication of the merits of hydrogen. Expect some weighty reports aimed at rebuffing the stance taken by the NIC and by hydrogen’s vocal critics. Much focus will be put into lobbying both the current government and Labour around the need to keep options open.

It’s difficult to see how this pitch can really land without at least a few sly digs at the case for full electrification. Gas companies have long acknowledged that electricity will play a significant role in domestic heat but they have also been quick to point out concerns about the cost and disruption of fitting heat pumps. A compelling addition to this argument would be to use the mounting concern over grid connections as another black mark against electrification. If gas networks pursue this angle, while still nominally in the ENA, things are likely to get even more awkward.

My concerns may be unwarranted. It is of course perfectly possible to agree on a destination but have different opinions as to the route. Operating outside the ENA will allow gas networks to find their own voice while the trade body will be freed from some tricky compromises. National Grid’s own ‘pivot to power’ and the emergence of National Gas may provide some model for an amicable divorce.

As a conclusion, I have to acknowledge that this will be a worrying time for the ENA’s staff and wish them all well. Acknowledgement of their hard work is perhaps the only common thread of my conversations with electricity and gas networks over the past 24 hours. On that at least, the two sides remain united.