Issue link: https://fhpublishing.uberflip.com/i/1141870
NETWORK / 33 / JULY/AUGUST 2019 in May 2019. Rather, through the stakeholder dialogue and business plan evaluation stage of the RIIO2 review there needs to be a clear focus on what companies will deliver, what investment is required and how this may be flexed according to any change in circumstances through the course of the price control period. GC: In RIIO2, we are proposing various possible price control re-openers for the future, as well as volume drivers, which will allow us to make the additional investment in our networks. We will submit a significant and justified proposal for support- ing the decarbonisation of both transport and heat, build- ing on the work that will be completed in RIIO1. Assuming, these proposals are accepted by the regulator, we believe that companies will have the ability to achieve GB's net zero goal. However, if these proposals are not accepted, companies' ability to react to significant changes in low carbon policies will be stifled. HB: We expect that this is an area that will continue to grow in importance both in the rest of ED1 and moving into ED2 as our customers and stakeholders expect more. AR: Given the need to embrace new technical and commercial solutions in RIIO-ED2, I am disappointed with the proposed cost of equity range which runs contrary to the independent analysis provided to Ofgem on the level of risk inherent in the delivery of critical infrastruc - ture. It is critical that Ofgem remains open to feedback and substantive change that will allow the development of busi - ness plans that fully deliver on stakeholder ambitions. SSEN will continue to advocate constructively and robustly for a regulatory framework that strikes the right balance between ensuring efficiency and affordability with delivering the necessary investment to improve services for consumers and drive further progress towards a low carbon, flexible energy system. Transitioning to low-carbon heating Phil Sheppard, director of gas transmission at National Grid, reflects on how gas can be part of the net-zero equation. In a political environment where it seems difficult to look beyond the prospective EU exit date this autumn, it was welcome to see a far-reaching Government decision in June to legislate for net- zero emissions. It gives Britain an opportunity to establish its leadership in emissions reduction - and to create new economic opportunities for the UK in doing so. However, the hard work – and cost - lies ahead. Industry and government must now drive the huge progress needed to decarbonise heat and transport. Innovations in hydrogen conversion, heat pumps and hybrid boilers all need extensive research and development, right now. In addition, we want the transition to a clean system to be fair, ensuring no one gets left behind, and taking place at the lowest possible cost for bill payers. This is where gas can be part of the net-zero equation. While electricity provides a fifth of the energy for the average dual fuel consumer, it represents over half the cost. Gas keeps 80 per cent of Britain's homes warm and comfortable, generates 40 per cent of its electricity and fuels industrial and manufacturing processes. It can help to decarbonise heat, the biggest source of UK carbon emissions from energy, affordably and with least disruption to consumers. Natural gas has already been instrumental, alongside renewables, in reducing coal to a 5.4 per cent share of electricity generation (2018 figures). Indeed, Britain benefited from electricity transmission without coal for 18 days consecutively from 17 May to 4 June this year: unthinkable just six years ago, when coal accounted for 40 per cent of electricity generation. It is gas that has provided the market flexibility to accommodate renewables. We're working across networks, supporting the Energy Networks Association (ENA) Gas Decarbonisation Pathways project. All credible pathways indicate a role for the gas grid, with electricity alone unable to meet peak winter heating needs. The Committee on Climate Change backed up this view in its recent net-zero report, proposing that 68 per cent of today's total demand for gas would still be required in 2050. There are still 2.53m households living with fuel poverty in the UK, with the average gap to affordability being £321 per year (BEIS, June 2019) - this means those households having to make decisions every day between fundamental needs. 'Food or heat?' is not a question they should need to ask. We owe it to these consumers to maximise what we can do with existing networks, a view echoed by consumers outside this group. If Britain needs to invest one trillion pounds over the next 30 years to reach net zero, then as a nation we must adapt those networks which will help us to reach the emissions target and minimise the cost burden: but there needs to be a crystal-clear policy decision on who pays, and how to prevent further families falling into the fuel poverty trap. Accordingly, we are now working with the gas industry on exciting transformational engineering projects to drive down the costs of decarbonising networks. These are the green shoots of a role that the national transmission system (NTS) and gas distribution networks can play in a net-zero energy future, with the potential to move pure hydrogen, renewable biogas, and blends of gas around Britain. We should remember that one million homes today are heated by bio-gas. National Grid Gas Transmission has three live hydrogen projects in play to decarbonise gas: Project Cavendish; Aberdeen Vision; and Hydrogen in the NTS (HyNTS). Overall, biomethane in decarbonising heat may be limited by its total potential and competing other uses: but it could still play an important role across all clean heat pathways, especially in hybrid heat pump solutions where a lower quantity of gas is needed. If biogas and hydrogen become the building blocks of providing future heat, much of the existing infrastructure used to transport gas could remain in place. Consumers could have similar appliances, and the storage challenges of heat could be met in broadly the same way as they are by natural gas. Industrial processes relying on heat could also benefit. For too long, heat has been on the energy policy back-burner, the story concentrating instead on power and transport. We must now address the uncertainties to allow policy-makers to move forward to an exciting new chapter of making heat green, affordable and easy for all consumers.