Pinchbeck highlights concerns over speed of gas phaseout

The energy industry is “very worried” that the gas generation fleet will be phased out too rapidly over the next decade, Energy UK’s chief executive has warned.

At a meeting of the House of Lords Economic Affairs Committee on Tuesday (22 February), Emma Pinchbeck highlighted concerns that the closure of gas plants could leave the UK without the flexible generation needed to cope with fluctuations in supply and demand during the transition to net zero.

Pointing out that there will still be a need for some unabated natural gas on the electricity system as late as 2035, Pinchbeck said: “We are very worried about gas investment and the role of gas over the next ten years.

“There’s a real worry that pressure on gas as a commodity will remove the gas fleet earlier than it needs to be removed.”

She said the industry is also worried that there is “no clear pathway for the managed transition of our gas fleet and related infrastructure”, which pose a “big challenge” for government in designing the market.

“We need a pathway for the next years to ensure we have enough of the fleet maintained so it is ready in the 2030s.”

Investors must have clear signals in order to ensure that sufficient gas generation is available to provide back-up generation for intermittent renewables and that power plants are ready to be run on hydrogen, Pinchbeck said: “If it doesn’t start happen imminently the market won’t get there.”

Paul Spence, director of strategy and regulation at EDF Energy, likewise expressed fears that financial regulations designed to encourage green investment could also inhibit transitional investment in gas.

He said: “The risk is that they won’t clearly recognise transition technologies, we’ll end up with too little of the gas needed. There is a very real risk that ill-considered financial regulation could accelerate the move out by funders of technology we will need in the transition period.”

Spence also said that while Contracts for Difference have proved very successful for rolling out the company’s wind farms and the Hinkley Point C development, the mechanism would not have worked for EDF’s next planned nuclear plant at Sizewell.

He said: “Quite frankly, EDF can’t do the next nuclear project in the same way.”

Spence additionally said he was “very concerned” about the pace of heat decarbonisation: “Towns and cities are pushing ahead but are relatively small-scale experiments at the moment and we need to massively up the pace.”

But Pinchbeck said she is optimistic that suppliers are developing “hugely exciting” electrified heating propositions for consumers.

“It reduces the need for public capital and may bring cost reductions that we have struggled with in heat previously,” she added.