Utility Week

UTILITY WEEK | 20TH - 26TH SEPTEMBER 2019 | 29 Customers is the shi in the consensus on the future of heat. The government's 2013 strategy explored options for gas networks to provide a supporting role to the power grid, but pre- sented electrification as the default solution to the decarbonisation of heat. In the meantime, gas networks have been working hard to make the case for a contin- ued role in the future energy system – devel- oping proposals for hydrogen gas networks and building a supporting evidence base for policy-makers. In late 2018, the Committee on Climate Change called for the deployment of hybrid heating systems in homes, with heat pumps providing a baseload and hydrogen boilers providing back-up on particularly cold days. Cadent, for its part, has announced plans to create the UK's first large-scale hydrogen network in the north west of England at a cost of £900 million. "From the standpoint two years ago, where everything was electrification, that understanding that there is a broader oppor- tunity and a broader pathway to achieve those decarbonisation goals and do it on a more economically viable basis by using the existing gas network, has come on strides, whether that is through greener gas, bioSNG, biomethane or through hydrogen blending or hydrogen networks." Train says the question over the future of heat poses another major challenge for Ofgem: "You've got all of these interest groups saying that their way is best. It's quite hard to then say: 'Well where's the hard evi- dence that helps us understand the engi- neering opportunities and capabilities and requirements, but also how the economic deployment will or won't happen through that period?' "What the regulator shouldn't be doing is making bets at this point around what the outcomes are going to be, because there are lots of options around the elements of the pathway," he argues. "But what they do need to facilitate is the mechanism in place that allows these options to be explored and then when they become deployable have the right incentives in place to deliver efficient and effective outcomes for customers." And Train has few complaints here. He says the ball is now very much in the indus- try's court: "I think it's actually for us to help government with those policy gaps by demonstration. "What do I want to see? I want to see policy-makers absolutely open to the broader prospect of opportunities around that decarbonisation and to understand the practicalities of the pathway and the journey. "But I do think it's for us as an industry to actually help the policy-makers do that." Train believes the sector has done an excellent job of developing the case for the decarbonised gas networks, but says more could be done to get the message out: "We are investing in projects that answer the technical sides of those questions that peo- ple will need to know and understand in order to deliver the outcomes. "I think the area where we then need to move that forward is to get that evidence into the policy debate and influence the development of that energy policy going forward." Converting customers The gas networks will not only need to win over the politicians but, more importantly, the voters who elect them. Train says they will need to show that getting rid of a conventional gas boiler will not bring any hardship for their customers: "The way to grab the attention is by doing demonstrations as to feasibility. "In the current environment, if you have an option in terms of your heating, the first thing you will go to is a conventional gas boiler… The UK still installs 1.5 million gas boilers each year and has done pretty con- sistently for a number of years now. "Air-source heat pumps, we install some- where just over 20,000 per year. The eco- nomic answer to the question is gas-fired boilers. "So how do we capture the imagination?" he asks. "The first thing is to be able to offer solutions that help customers achieve the outputs that they want to achieve. And what do you want as a customer of a gas network – you want to be kept safe and you want the heating to work in a way that keeps your house warm as and when you want it. "And that's the outcome that we need to be able to deliver on behalf of them. What the gas is, is not particularly important to the customer. What's important to the customer is having heat as and when you want it." Transformation hopes When it comes to the future of heat, co- operation between gas networks is both his biggest concern and his greatest source of optimism. He says the industry has successfully undergone major transformations before; for example, the shi from town gas to natural gas and the resulting uptake of central heat- ing: "When I started my career back in 1983, we were at the start of what was a silent revo- lution that we didn't really understand at the time." The gas networks were then responsible for providing between 25 and 30 per cent of domestic heating, but within a "very small" period the figure rose to the mid-80s. "We're now at 84 per cent of heating in the UK that is undertaken with gas-fired central heating," he adds. "And in a way that was a silent revolution in terms of the massive change in customers' needs and expectations about how they heat their homes… Most households only heated one, maybe two, rooms and that was either with a coal fire or a paraffin heater or a Calor gas heater. "That change was really facilitated by the change from town gas to natural gas increas- ing the capacity of the system and the net- work, but was really driven by responding to societal needs and customer expectations. "As I look forward I think we're at the start of a new silent revolution, and that will be how we repurpose the gas network to decarbonise the heat in customers' homes." Train has "absolute faith" that the indus- try will be able to transform itself once more. If he does have any fears, it is that this co- operation comes to an end and the industry ceases to provide a "consistent and unified voice". It will be up to Fraser to ensure this continues.

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