Methane Matters

The need to adopt methane strategies is an under-explored area of net-zero policy but there are still important steps that can be taken by the government and Ofgem. Maxine Frerk delves into the issue in her latest column for Utility Week.

One of the less discussed aspects of the recent Intergovernmental Panel on Climate Change (IPCC) “wake up” report was the focus it put on methane.

As a “short lived climate forcer” (SLCF), methane has a big impact on global warming in the near term. Moreover, if you can reduce methane emissions there is actually the prospect of reducing the total stock of greenhouse gases in the atmosphere (as previous methane emissions dissipate more quickly than carbon dioxide) and hence the risk of damaging climate impacts in the near term.

As the IPCC Technical report put it: “Over 10- to 20-year time scales, the influence of SLCFs is at least as large as that of CO2, with sectors producing the largest warming being fossil fuel production and distribution, agriculture, and waste management. Because the effect of the SLCFs decays rapidly over the first few decades after emission, the net long-term temperature effect from a single year’s worth of current emissions is predominantly determined by CO2.”

In numbers terms the latest IPCC report gives the Global Warming Potential (GWP) of methane – a measure of its relative impact – as 82.5 over 20 years or 29.8 over 100 years (compared to carbon dioxide which is 1). Typically the GWP-100 figure is used for reporting but the IPCC report makes clear that the choice of metric should depend on the use to which it is being put.

As the IPCC report highlights, it now looks likely that we will hit the critical 1.5 degrees temperature increase within the next 20 years – with devastating impacts on habitats and people. There is also an increased risk of hitting tipping points through, for example, the melting of permafrost. Given this, a focus on methane becomes really important – and the short-term effects are what counts.

As reported in the Guardian, Durwood Zaelke, one of the IPCC lead reviewers, has called for a focus of COP to be to try to get all countries to adopt methane strategies. “Cutting methane gives us time” he says.

Alok Sharma, the UK COP president, in a speech about the IPCC report said that there were four priority areas for COP – power, transport, deforestation and methane. But then all he had to say on methane was that they were “also determined to drive global action on methane which has the power to avoid 0.3 degrees of warming by the 2040s if we get it right”.

Lack of focus

The reason that he didn’t have much more to say on the subject is that to date it hasn’t been a focus for BEIS or Ofgem.

The Energy White Paper makes only one brief reference to methane reduction in the context of upstream oil and gas. There is no mention of leakage from the gas distribution networks.

And in the recent RIIO GD2 price controls Ofgem resolutely refused to give the issue the attention it deserved, despite calls from the charity Sustainability First (and others) for more to be done. Ofgem significantly scaled back on the incentives to reduce leakage that had been in place in the previous two price controls, fearful of over-rewarding the companies. It refused requests for more funding to accelerate the iron mains replacement programme (a safety driven programme required by the HSE but which is also one of the main ways of reducing leakage).

Its reason was that it hoped to get the HSE to revisit its requirement given the uncertain future of gas networks. Although Ofgem did ultimately fund some small innovation projects, the networks could certainly be forgiven for taking away the message that leakage reduction was not a priority, despite it having strong support from consumers and stakeholders.

Using the COP to increase the focus on methane makes real sense but before the UK can do that it needs to get its own house in order.

While methane comes from a number of sources, the IEA in its recent net zero roadmap put an emphasis on the energy sector because methane leakage there is also costing the industry money.

The Climate Change Committee as part of its advice on the Sixth Carbon Budget had a similar focus. In particular it assumed that “Methane leaks from the gas distribution and transmission networks are reduced in the Balanced Pathway using a combination of Leakage Detection and Repair (LDAR) technologies and continuous monitoring technologies, resulting in 3.5 MtCO2e/year in 2035”. A valuable first step would be for BEIS to make clear that it supports this goal and for BEIS and Ofgem to reiterate that message to industry.

Having missed the boat on GD2 there are still important steps that Ofgem should take, including:

– actively monitoring leakage performance in GD2 to ensure that the scaling back of incentives does not result in performance slipping;

– reviewing the role of the leakage and shrinkage model which underpins the incentive framework but which also serves to allocate the costs across suppliers, diverting focus from the task of methane reduction;

– making clear that in assessing investments that reduce leakage the higher GWP-20 metric should at least be considered as a sensitivity, to take proper account of the short-term effects;

– encouraging networks to use innovation funding to explore new technologies that could help in this space.

Finally, one virtue of the RIIO 2 price controls is that they include a range of net zero related uncertainty mechanisms. If Ofgem could be persuaded that the science had moved on (or if the HSE made clear that it was still going to require its 2030 deadline to be met) then Ofgem could conceivably revisit some of its earlier decisions.

The IPCC has made clear that methane matters. The question now is what BEIS and Ofgem are going to do about it.

And clarity on that ahead of COP is crucial if UK is to maintain the leadership role it aspires to.

Maxine spent 15 years at Ofgem, latterly taking on responsibility for all aspects of the regulation of distribution networks. Since leaving Ofgem she has been working as an independent consultant for a mix of regulated company and consumer / community group clients.