SGN’s chief executive talks to Utility Week as part of our Countdown to COP campaign about the challenge of engaging customers in decarbonisation of heat. He also questions whether the UK is being ambition enough on hydrogen and why our net-zero goals must be aligned globally.

COP26

What do you want to hear from the conference?

For the UK, we have the targets in place now, however it is time to start putting plans in place and focus on delivery.

Our energy market is linked at a global level, so alignment of goals is important. It’s also key that we are running at the same speed.

We also need to build global alignment and maintain support to ensure the UK public don’t think that we are trying to do this on our own.

What should the legacy of COP26 be?

A focus on delivery plans is the most important aspect for me. From a technology perspective, there has been a lot of discussion around hydrogen in the past few years. Having some ambitious global targets on production would help develop the market for hydrogen.

Is your company actively participating in COP26?

We are doing two things:

• We are showcasing our H100 Fife project, a world first we believe, which will deliver green hydrogen to customers in 2023. It’s a project we are really excited about and we hope will bring a lot of focus and attention to the decarbonisation of heat agenda. It’s part of an R&D programme which we will deliver to BEIS which sets out the evidence base for distributing hydrogen rather than methane in the gas networks.
• Second, we are working with stakeholders around the country to showcase our plans to deliver an accelerated hydrogen pathway in Scotland, and also explain how we focus on delivering a net zero heating sector.

Has the UK done enough this year to position itself as a world leader on climate change?

Yes, I think they have been visible and have delivered a strong narrative. Critically, we have seen the US and China come to the table with a view to making strong commitments in terms of coal use and funding for climate change adaptation.

This is a real step change from what we have seen in recent years, particularly in the US, so it’s a genuine step forward. Getting sold commitments from the US and China will give other major industrialised countries nowhere to hide.

Walking the talk

When and how is your company planning to get to net zero?

The commitment we have made, which is at the heart of our GD2 business plan, is that we will be at net zero by 2045.

In April this year, we launched our Environment Strategy: our business blueprint for reaching net zero greenhouse gas emissions. It explains how we’re working towards the Scottish Government’s net zero target across both our networks.

Based around five pillars that demonstrate our long-term environmental ambitions, the strategy will help reduce our emissions as we work to develop a world-leading green gas network powered by hydrogen. The pillars are:

• Net zero business carbon emissions: we’ll reduce our carbon footprint to net zero by 2045.
• Engaging with our supply chain: we’re changing the way we source goods to reduce their carbon impact, and helping our suppliers become more sustainable.
• Boosting biodiversity: we’ll create more healthy green areas on our land, helping to improve air quality in our communities.
• Transitioning towards a circular economy: we’ll use our resources efficiently across our business operations and infrastructure projects, reduce waste to landfill, and cut down on using virgin resources.
• Supporting the transition to a hydrogen economy: we’ll work with industry and governments to support the transition to a net zero gas network powered by hydrogen.

We haven’t signed up to the Science Based Targets Initiative as in the short term they are developing a new methodology for companies in our sector to set science-based targets. We’re hoping to work with SBTi in developing its methodology, but in the meantime we are working with Carbon Trust instead to validate our targets and plans.

To what extent should utilities look to offset emissions as opposed to focusing on achieving zero carbon?

Customers want to know that we’re doing everything we can to take action on climate change. Our actions include developing biodiversity projects to create more healthy green land on our sites and benefit local communities. Earlier this year, we also set up an Environment Advisory Panel to challenge and provide support with our sustainability strategy and action plan.

Customers and the community

What role do you think utilities have in helping to accelerate the climate plans of local authorities?

Working with local authorities will be a fundamental building block to get us to net zero.

One of the key issues, in terms of heat, is the quality of local housing, in particular the building fabric and the energy efficiency performance. Local authorities are often the best placed to understand this.

There is a clear link with not just residential heating but also the Local Area Energy Plans, which look across sectors and energy vectors, taking into account wider industrial and economic ambitions in the area too. For networks, it’s critical that we play a substantial role in helping local authorities develop these plans.

At SGN, we’ve cultivated excellent working relationships with local authorities for years and have been collaborating to support specific objectives to help vulnerable and fuel poor customers.

More recently, we baked into our GD2 business plan resources to deliver a Whole System Team which is now working with local authorities to develop their own plans.

What role can utilities play in helping to engage customers on the path to net zero?

We have a really big role when it comes to decarbonising heat. The scale of the engineering and logistical challenge is huge. But there is an emotional and engagement challenge here too.

While we have made good progress on power and transport decarbonisation, this will be the first-time government has asked customers and the public to genuinely buy into a level of change and for many, disruption, that for the majority will not be on their radar at all.

So, we will have to work collectively to raise the profile of the change that is to come.

I think we also need to offer customers choice and options. Forcing technological change onto customers has rarely, if ever, been successful, and we have to keep the customer at the forefront of our plans.

Policy & regulation

What is your principle ask of government and regulators to help your company contribute to the net-zero push?

I think the UK government has done a good job overall in developing the hydrogen strategy in the past 18 months and it has shown financial commitments to R&D which has been great.

However, I was surprised at the 2030/5GW production target and wonder whether this will;

• Meet the scale of the challenge for net zero; and
• Position the UK as one of the leading global industrial players on hydrogen

I think the production target is quite low, compared to what other countries are doing globally.

And given industry has said it can deliver three or four times that by 2030, I think government should set industry a challenge to go to 15GW or even 20GW hydrogen production by 2030.

This interview is part of the Countdown to COP series. To read more click here.