(Bloomberg) --
The U.K. government is moving to scale back natural gas use as it pushes coal off the grid, its latest effort to feed rising electricity demand while slashing climate-damaging emissions.
The government’s energy white paper published Monday sets out a path to draw in investment for nuclear reactors and carbon-capture technology. Those steps could help Prime Minister Boris Johnson achieve his goal of zeroing out emissions in the coming decades.
The measures would overhaul the way consumers warm their homes and industry gets thousand-degree heat for processes like oil refining and glass manufacturing. It makes the U.K. among the most ambitious countries in the world in transitioning away from fossil fuels, strengthening Johnson’s authority on the environment a year before he’s due to host United Nations talks on climate change.
“They’ve signaled there’s going to be a shift from fossil fuels to clean energy,” said Josh Buckland, a director at consultancy Flint Global and a former energy policy adviser to Number 10 Downing Street. “The big winner in that is electrification. Electricity will be the common energy currency from now on.”
Earlier this month, Johnson pledged the fastest cut in greenhouse gas emissions of any major economy. Part of that relies on existing policies designed to phase out the last coal power plant in the U.K. by 2025, a deadline the government indicated may be brought forward one year.
With coal increasingly out of the way, gas is moving into focus. The policy paper includes the promise of a consultation on how to stop using gas for heating in new homes from 2025 and to blend the nation’s gas supply with 20% hydrogen by 2023 to cut emissions.
That would help answer one of the most tricky questions in energy. How to supply some of the biggest and most polluting industries with thousand-degree heat needed to make everything from steel to gasoline and glass -- and how to move homes predominately heated by gas-fueled boilers. About 85% of Britain’s homes are connected to the gas grid and a fifth of overall emissions comes from heating buildings.
“Gas-fired power stations have traditionally provided the flexibility needed to match supply to demand at peak hours, or when renewables output is low,” it said in the paper. “Increasingly, flexibility will come from new, cleaner sources, such as energy storage in batteries.”
But while the paper signals a direction of travel, many details on the regulations and subsidies needed to reach net zero are still lacking.
“Investors will need more details on specific policies if we are to attract the investment needed to reach Net Zero and create the green jobs the government is aiming for,” said Simon Virley, head of energy and natural resources at the British arm of the consulting firm KPMG.
Darren Jones, chairman of Parliament’s committee which scrutinizes the business department, said he was concerned that the government wasn’t going to ban new gas boilers by 2023. Such a ban would be key to the U.K. decarbonizing energy from buildings, according to the government’s independent advisers the Climate Change Committee.
Heating and Hydrogen
One option is to use hydrogen, which burns cleanly. Some of the existing 284,000 kilometers (176,470 miles) of pipeline infrastructure can be used and it can be blended with gas gradually. Blending 20% hydrogen into the gas grid could save as much carbon emissions as taking 2.5 million cars off the road, according to the Energy Networks Association.
Britain has also committed to increasing the installation of heat pumps to 600,000 a year by 2028 from 30,000 now. That would shift more heating to the increasingly renewable electric grid.
Biomass and Carbon Capture
The government says it will fund at least one power project equipped with technology that captures the emissions and stores them permanently under the seabed, starting with 1 billion pounds ($1.3 billion) by the middle of the decade. That could be a gas plant, but it could also be a wood-burning power station like the one that Drax Group Plc operates.
The U.K. said it considers biomass to be one of its most valuable tools for reaching net-zero emissions. By 2022, the government will lay out its plans for how to use biomass with carbon capture technologies.
CCS is crucial in securing the future of large gas plants in the electricity mix. Overall, the U.K. wants to capture 10 million tons of carbon dioxide a year by 2030.
Storage
At the heart of the U.K.’s decarbonization efforts is energy storage that will give grid managers flexibility on when to use power coming from wind farms. The government aims to quadruple development of offshore wind farms in the coming years. Those facilities could both make hydrogen and feed shorter-duration batteries that link into the grid for when there’s not enough breezes.
The government will publish a Smart Systems Plan in spring next year that will include a framework for technologies that can provide flexibility when there’s not enough wind..
Net Zero Oil and Gas Production
The government will pledge to end flaring by 2030 as part of its efforts to speed up the efforts to make the U.K. Continental shelf a net zero emissions basin by 2050. The Oil and Gas Authority will publish a new strategy by the end of 2020 with regulations that encourage the switch to clean energy.
The challenge will be to make the shift to clean energy with minimal economic impact. An 80% cut in production is possible by 2050. More than 45,000 people were employed in the industry.
Nuclear
Nuclear is seen as key to Britain’s net zero target. Along side the white paper, the U.K. gave a boost to large-scale nuclear power projects, saying it wants to unlock investment in at least one plant by the middle of the decade and that it’s starting talks with Electricite de France SA on a project.
The long-anticipated move would help replace the existing generation of atomic plants, all of which are due to retire by the middle of the next decade, and help shore up supplies of pollution-free electricity. It’s also likely to put more taxpayer money on the line in financing giant power plants that can take more than a decade to build and cost $20 billion or more.
©2020 Bloomberg L.P.
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