Issue link: https://fhpublishing.uberflip.com/i/782355
NETWORK / 17 / FEBRUARY 2017 to plastic not only offers a safer and more reliable way to transport gas, but also the opportunity to transport more than just natural gas. What we'll be transporting remains to be determined, but there is the potential for a bright future for a strong, flexible UK gas industry. There is a heavy focus on a low-carbon and secure solution, but the third part of the trilemma – affordability – cannot be overlooked. With 17% of the population living in fuel poverty, we must ensure our solutions do not place more people at risk of living in poverty. Currently gas is affordable – customers pay a third of the price per unit for gas than they do for electricity. Future sources must be as cost- effective as gas or cheaper still. Gas networks are working hard to reduce what the UK spends on nitrogen ballasting liquefied natural gas imports. The project to open up the gas market by harmonising gas quality requirements across Europe is now complete, and allows the UK to source gas from more diverse and competitive sources. Ultimately, it will allow a far wider composition of gas to be transported through the gas networks, drive potential annual cost savings of £325m, and increase security of supply. One longer-term option is to convert the gas network to carry 100% hydrogen. Sourcing hydrogen could bring a mutually beneficial opportunity with the renewables industry to use power produced when production exceeds demand. At the moment wind generators are compensated for this power, but it could be used to split water into oxygen and hydrogen through electrolysis, with the hydrogen injected into the gas network. Green hydrogen can also be produced from natural gas by reforming it with steam while capturing and storing the carbon, which may be a cheaper long-term volume solution. By adding more biomethane, hydrogen or biosynthetic natural gas into the gas mix, we can make reasonably cost- effective carbon reductions with minimal impact, while allowing customers to continue using their existing gas appliances. Other options are under consideration. The one touted more than any other is complete electrification. But electricity networks would have to be significantly upgraded if everyone heated their homes using an electric heat pump. The cost would ultimately fall on customers through their energy bills. What isn't known is the cost and whether customers even want it. Biogas, hydrogen, liquefied natural gas, compressed natural gas and blended gas are all being explored to see if they can provide a cleaner, low-risk, low-cost, high-benefit heating solution. We also have potential solutions through wind, solar, heat pumps and heat networks. But which is the right answer? Or is it a mixture of all of them, or something else entirely? And do consumers get an opinion? Solving the issue of a reliable heat source that is clean, cheap and secure is only part of our challenge. Consumers like having a choice of energy and energy supplier and the ability to swap when they're not happy, and are already concerned by their energy bills. However, many are not well informed and trust experts (industry) to find the right solutions on their behalf. The decisions we make now about the future are important to customers even if they don't know it yet. So any decisions have to be underpinned by strong, focused stakeholder engagement. As industry experts we're best placed to help identify potential solutions, but investment should occur only when we know it's going to be widely supported by customers and consumer groups. N Andrew Musgrave, head of network strategy, SGN H e at o r e at ? Gas boilers must be at the forefront to the solution to fuel poverty, argues the EUA For all the energy industry's progress towards becoming more green, flexible and customer-centric, the unavoidable fact remains that fuel poverty is an issue that government policies and schemes have had little impact on so far. The latest figures from the Office for National Statistics reveal that inadequate heating in UK homes led to an estimated 24,300 preventable deaths in the winter months of 2014 and 2015. This mortality level is largely unchanged from 20 years ago. The particularly cold winter of 2014/15 led to an estimated 43,850 deaths – the highest figure since 1999. New trends in preventable winter deaths have also begun to develop in recent years. Although the vast majority of these winter deaths occur among the elderly, the latest figures show preventable winter deaths are rising for those under the age of 65 and falling among those aged 85 and over. Despite the focus in recent years on installing energy efficiency measures such as cavity wall and loft insulation, the most cost-effective answer is gas central heating, the Energy and Utilities Alliance (EUA) has argued in a report on tackling fuel poverty. It says that the absence of a boiler in a home is a major indicator of fuel poverty. The cost of using gas heating is 4.6p/kWh of delivered heat, compared with 13.86p/kWh of heat for a system using electric storage heaters. But for households in fuel poverty the cost of installing a first-time central heating system is too high unless they have some outside help. According to the EUA, the installation of gas central heating could result in fuel bill savings of as much as £1,843 for a home with a heat demand of 20,000kWh a year. In contrast, cavity wall insulation saves £233 on the customer's annual energy bill, solid wall insulation saves £430 and loft insulation saves just £58. As a result, the EUA is calling for a third iteration of the Energy Company Obligation scheme, which is due to start in 2018, to focus on funding first- time central heating systems for the poor. Yet this is only part of the problem. The EUA is also calling for the cap on first-time connections to the gas grid in the Fuel Poor Network Extension scheme to be lifted. Currently gas distribution networks are allowed to connect only 91,203 homes a year up to 2021. The cost of connecting a home up to 23 metres away from a gas mains is minimal. It is estimated that 54% of all off- grid properties in Great Britain lie within this distance. The EUA believes that by taking these two simple measures, the number of fuel- poor homes in the UK could be reduced by approximately half a million. EUA recommendations: u Amend the Energy Company Obligation scheme to focus on first-time central heating systems for the fuel poor. This could save 139,130 homes at least £922 a year. u Remove the cap on first- time connections through the Fuel Poor Network Extension scheme. "Two simple measures could reduce the number of fuel-poor homes in the UK by approximately half a million."