KPMG Report Analyses Long-term Role of Gas Network in the Future of Heat

For immediate release – Tuesday 12 July 2016

KPMG Report Analyses Long-term Role of Gas Network in the Future of Heat

Making use of the UK’s gas network infrastructure offers a practical and affordable solution to the future challenge of heat decarbonisation, according to a new independent report, “2050 Energy Scenarios - The UK Gas Networks role in a 2050 whole energy system.”

The report, prepared by KPMG for Energy Networks Association (ENA), considers the decarbonisation challenge which is driving a change in how we heat homes and businesses in a low carbon future.

The report takes a whole energy system approach and explores ways that the heat sector can be decarbonised, by looking at four possible future scenarios; evolution of gas networks; prosumer (self-generating heating and energy solutions); diversified energy sources with different technologies used across the country; and electric future. Advantages, disadvantages and costs of each scenario are analysed.

The report finds that evolution of the gas networks, injecting green gas such as hydrogen into the grid, offers significant cost savings against alternative low carbon heating sources. It is also shown to be the most practical scenario in terms of technical feasibility and, importantly, acceptance from customers and society. The value that customers place in the convenience and reliability of current heating solutions is shown to be an important consideration in future policy decisions.

The analysis identifies advantages from continued use of the gas network, and concludes that the future is likely to include a range of solutions borrowing from each of the scenarios considered.

Recommendations from the report include:

  • Gas and electricity policy decisions need to be firmed up ahead of the next RIIO network price controls, due to the long term nature of network investments.
  • More detailed assessment on the acceptance of major change by consumers and society is needed, with regard to both policy and practicality aspects.
  • Gas and heat innovation funding and piloting needs to continue, especially in areas that help to firm up the understanding of options for 2050.
  • Transport decarbonisation policy needs to be integrated with power and heat decarbonisation policy 

ENA Chief Executive David Smith said, “Heat accounts for 45% of the UK’s energy needs and this report demonstrates the scale of the challenge facing the UK as we look to decarbonise the sector in a secure and affordable way. This analysis places important emphasis on the customer and shows that making efficient use of the extensive gas network available to us in the UK offers an affordable and practical solution to this challenge.”

Robert Hull, Director at KPMG and author of the report comments “Gas currently delivers an essential service, providing heat for UK consumers and businesses. This new KPMG report analyses four scenarios to explore how the UK can meet its 2050 decarbonisation ambitions, and helps set out the benefits and challenges for each. Important strategic choices lie ahead for the industry and this report can help inform the debate.”

ENDS

Notes to editors

ENA is the voice of the networks representing the ‘wires and pipes’ transmission and distribution network operators for gas and electricity in the UK and Ireland.

The report is available here

For further information please contact:

Matthew Pringle
Press and Public Affairs Officer
Energy Networks Association

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