Last week I spoke about how to manage the transition to a low carbon gas network at the Westminster Energy, Environment & Transport Forum. Much of the conference covered the different available approaches to de-carbonising the gas network, in particular conversion to hydrogen and the use of heat pumps in meeting the Government’s new net-zero targets.

I have some concerns about this approach and see risks in focusing too narrowly on de-carbonisation. Irrespective of my views on whether carbon dioxide is in fact the great evil of our time, assuming that this narrow policy focus will persist creates risks for businesses that they will invest in assets that become redundant due to future policy changes. We have seen this recently with the policy reversal relating to diesel cars, and its not impossible that tighter regulations emerge in relation to the use of lithium and cobalt due to the environmental harms arising from their extraction, that could limit the use of Li-on batteries.

Assets could also become stranded due to the emergence of new and disruptive technologies – in the context of gas networks, this could be the development of viable domestic thermal energy storage solutions.

A sustainable gas network in practice

Before considering how to achieve a sustainable gas network, it is worth re-capping what the gas system does. The chart illustrates energy consumption in the UK by sector, and it is clear that the largest contributors to energy consumption are space and water heating – roles that in many cases are fulfilled by gas.

low carbon gas networks

In its recent annual examination of Future Energy Scenarios, National Grid has set out how it sees gas and electricity demand evolving under its four different scenarios, which have remained the same since last year. Looking specifically at the domestic segment, we can initial demand reductions due to the impact of efficiency measures, but then increases in electricity demand with some level of electricifation of heating, offset by reductions in gas demand although these are limited where methane is used as a feedstock for hydrogen production.

low carbon gas networks

low carbon gas networks

National Grid believes that homes will need to use a third less energy for heating than today by 2050. More than 23 million homes will need to install new low-carbon heating, and up to 85% of homes need to be very thermally efficient with an EPC rating of class C or higher. Different approaches will be likely be taken in different parts of the country due to local market variations and constraints.

Improving the energy efficiency of buildings

Reducing energy consumption through better efficiency measures is an obvious approach to a more sustainable gas system, and the direction of travel is for increasing regulation to require homeowners and landlords as well as property developers to improve the energy efficiency of the buildings they own or are building.

This is all very well in theory, but unless the efficiency performance gap is closed, it will be impossible to effectively realise the potential gains in the area. (The performance gap is the phenomenon whereby the actual energy consumption of buildings is on average 2-5 times higher post construction than was predicted in the pre-construction design phase.)

In February 2016, results of the Innovate UK Building Performance Evaluation study were published. The study monitored the operational performance of 50 non-domestic buildings and 76 residential projects for three years and found that nearly every non-domestic building had higher carbon emissions than predicted during the design phase. In some cases, total emissions were 10 times the Building Emission Rate calculated for Part L compliance. Of the domestic buildings studied, carbon emissions were two or three times higher than had been estimated during the design stages.

Research in 2017 by the University of Bath exposed the flaws in the system, where the experts responsible for specifying energy efficiency measures and calculating their impact are actually poor at predicting which parameters will in fact reduce the energy use of buildings – the study found they were no better than the man in the street at doing this. This is because there is no requirement for post-construction testing and evaluation of building energy performance, which means there is no ability to learn what works and what doesn’t work in practice. There is also no accountability, so there are no incentives for building designers to perform these checks themselves.

low carbon gas networks

If we are serious about reducing the energy consumption of buildings, we need to address this. Post-construction testing should be mandatory, and the results should be public. EPC ratings should be backed by actual performance data and not be based solely on theoretical performance.

The Bath researchers identified a school in Plymouth where the energy consumption of the new, supposedly energy efficient building, was the same in one month as it had been for a whole year in the 1950s building it replaced. Currently the buyers of new buildings have no recourse in this situation, but as new service models emerge, where companies offer properties to rent, fully furnished with all property-related bills included, more attention might be paid to these areas. However, policymakers should take the lead and create obligations for post-construction testing, to ensure the construction industry learns what does and does not work in improving the energy performance of buildings.

Leveraging existing energy infrastructure

Existing energy networks are also relatively inefficient. The electricity system is dominated by gas, yet combined-cycle has turbines have fuel-efficiencies of only around 49%. When transmission losses of around 8% and energy industry parasitic losses of around 8% are taken into account, the useful efficiency of electricity generated from gas is only about 33%.

Micro combined heat and power (“mCHP”) is the co-generation of heat and power in a domestic environment, which can replace or supplement a traditional domestic gas boiler. Electricity is produced when there is a need for heat, and the heat released as part of the generating process heats the house via the existing radiators. Depending on the technology and system design used, electricity can be generated with efficiencies above 90%.

In addition to having fuel efficiency almost three times higher than gas-fired grid electricity, mCHP systems have a number of other benefits:

  • lower carbon footprint than condensing boilers;
  • no transmission losses as electricity is used locally;
  • electricity produced at peak times (when heat is needed) ie when grid electricity is most expensive;
  • no intermittency issues;
  • reduces net demand on the electricity grid; and
  • reduces need for new generation and grid capacity.

A number of different technologies can be used in mCHP systems, including:

  • Internal combustion engine;
  • Stirling engine;
  • Microturbine;
  • Organic Rankin cycle engine;
  • Thermo-acoustic Sterling engine;
  • PEM Fuel cells;
  • Solid oxide fuel cells.

Each technology has its own advantages and drawbacks, but may be appropriate in different circumstances. Some are more suitable as add-on appliances rather than boiler replacements, and some require a change in system design or utilisation to maximise the benefits whilst others do not. A typical domestic installation would be a 1kW appliance that could generate £500 per year in energy cost savings.

However, although mCHP has been around for a while, it has not yet reached a level of maturity that would make it economic for the mass market. The capital costs of new mCHP installations are still too high, with payback periods of around 8 years. In order to see wide-scale adoption of such technologies, the payback periods would need to fall to under 5 years, which could be achieved through subsidies. This might be a more appropriate use of scarce government support than extending solar subsidies, or providing the massive support that would be needed to make carbon capture and storage (“CCS”) viable.

Electrification of heat

Electrification of heating can be achieved through the use of air or ground source heat pumps, which extract heat from the air or ground and are electrically powered. Heat pumps are effective continuous sources of heating but do not offer the same instantaneous heat as a combi gas boiler – comfort levels are achieved through continuous heating rather than bimodal heating in the mornings and evenings. This increases average internal temperatures and hence overall energy demand. Hot water is provided from a tank, with supply limited by the tank size.

Heat pumps require a certain amount of outside space to operate efficiently, which limits the number of properties that could consider heat pump use. According to the Committee on Climate Change, heat pumps are currently suitable in around ten million properties on the gas grid with a further ten million or more properties having the potential to be made suitable through the addition of loft and wall insulation, upgraded heat emitters (radiators or underfloor heating) and, in the case of homes with existing electric-heating, installation of wet-based central heating. This is a more significant programme of work and creates a higher level of disruption than a typical heating-system replacement.

Ground-source heat pumps have higher performance than air-source systems, but require boreholes where horizontal ground loops cannot be accommodated due to space constraints. These are expensive unless the cost can be shared across a number of neighbouring properties.

Although heat pumps are a relatively mature technology, consumer awareness remains low, and may suffer through association with conventional electric heating, which is less popular than other forms of heating due to difficulty of control and high running costs. Upfront costs of a new heat pump system are high, so some form of subsidy is likely to be required to incentivise widespread adoption.

An increase in electric heating will also require significant new electricity network capacity to be installed which would be particularly challenging in built-up areas. According to a 2016 report by KPMG, a meaningful increase in electric heating will create major difficulties in meeting peak electricity demand, with significant back-up capacity required to cover renewable intermittency.

“This (electrification of heating) is technically possible but significant investment will be needed to meet peak heat demand. This will require new equipment in the home, reinforcement of electricity networks and new generation, including back up capacity for some renewable capacity at winter heating peaks.  Conversion will face design, planning, customer acceptance, and funding challenges,”

Some of the challenges of heat pumps could be mitigated through hybrid systems that combine a small heat pump is alongside a conventional gas boiler:

low carbon gas networks

With a hybrid system, no gas is used for heating across a large part of the year, as the continuous, lower temperature heat provided by the electric heat pump is enough to keep the house warm. On colder days, the gas boiler is used to provide additional heat, and on the coldest days, almost all of the heat comes from gas. Overall 20-35% of the annual heat demand would be met be gas and the rest by electricity.

low carbon gas networks

Hybrid systems are relatively less mature than standalone heat pumps, however there was a successful trial last year conducted jointly by Wales & West Utilities and Western Power Distribution, where hybrid systems were installed in 75 homes in Wales. The systems were installed in homes with different means of heating including Liquified Petroleum Gas (“LPG”) as well as piped natural gas, and showed that consumers could achieve significant cost savings by switching around 80% of their heating load onto the air-source heat pump. In all scenarios, the control system delivered  good comfort levels despite operating at times in temperatures below -6oC (interestingly, some trial participants reported problems with overheating).

The smart heating controls used predictive optimisation of running costs to enable the heat pump to pre-heat the building ahead of an occupancy period. This allowed the heating load to be spread, avoiding peak times, and enabled operation of the heat pump at a low flow temperature to optimise efficiency, in contracts with traditional hybrid systems that switch fuel based only on external temperature. In addition, the aggregated load of all homes was forecast by the half hour for the day ahead, and the demand forecast used weather forecast data, learned building thermal properties and schedules for each home to predict the expected demand shape. This shape was then modified by providing constraint instructions, for example to limit power demand in each home or limit power demand at portfolio level.

This aggregation capability means that the hybrid system has the ability to provide fully flexible demand that can respond dynamically to network constraints and price signals. This would enable aggregated hybrid heating systems to provide frequency response services and participate in the Balancing Mechanism.

Reducing the carbon content of gas

Much has been made recently of the potential for converting the gas networks to using hydrogen rather than methane, in much the same was as the networks were previously repurposed from town gas to methane in the 1960s and 70s. When burned, hydrogen does not produce any carbon dioxide so is considered suitable as a low-carbon source of heating, although in order to produce hydrogen in the quantities needed to displace methane as a heating source, methane would need to be used as a feedstock with the carbon dioxide by-product being captured and stored using CCS methods.

Full conversion to hydrogen is challenging:

  • Hydrogen has smaller molecules than methane may require new pipes/joints etc – this is partly addressed though the current replacement programme for iron gas mains, as well as new appliances such as boilers and cookers;
  • Hydrogen is colourless, odourless and highly explosive which is very challenging for domestic appliances;
  • Requirement for CCS: there are currently no large-scale CCS projects anywhere in the world that do not reply on hydrocarbon fuel production for their economics, meaning that significant government support is likely to be necessary.
  • The amount of methane used in a hydrogen-based network would be higher than for existing gas networks, which created additional challenges in relation to security of supply as most of this gas is now imported.

“I’m not sure, quite yet, that the realisation has dawned, that the investment in infrastructure would be equivalent to that which is required for electricity, and the adaption for the products on the network, would require significantly more inconvenience to the end user, or at least equal inconvenience as moving to electric rather than fossil fuel,”
– industry participant interviewed as part of the Exeter/UKERC study

Alternative approaches would be to blend methane with hydrogen or biogas. Hydrogen could be produced by electrolysis using excess renewable generation that would otherwise be constrained off the system. No carbon dioxide is produced from this method, and hydrogen concentrations of 15-20% could be possible without compromising existing gas infrastructure and appliances. Similarly, biogas created via anaerobic digestion or gasification of organic materials could also be injected into existing gas networks.

A recent study by the University of Exeter and UK Energy Research Centre discounted biomethane as a key technology for space and hot water heating decarbonisation because of limited available resource and the requirement for high grade heat in industrial processes. Bio synthetic natural gas produced from waste was also discounted due to the very limited experience of its use and questions over its carbon reduction potential. However, a more modest ambition of using biogas to reduce the carbon intensity of existing networks might be more realistic.

Sustainable gas networks start with efficiency and leveraging existing infrastructure

Most of the approaches to de-carbonising gas networks and thereby de-carbonising heating, involve significant capital outlays and will require both state subsidies and significant customer acceptance programmes.

According to a 2015 study by Wales & West Utilities and Business Navigators, the majority of domestic consumers (87%) would not change their existing heating provision in the absence of significant financial benefits, and only then if they have funding available, ie readily available cash to replace a heating system or low cost loans, and only if the system is coming close to the end of its cost effective life cycle and/or actually fails. Without these potential failure signs, consumers would simply opt to do nothing – if their current system was operating well they would not elect to change their heating systems.

The most cost-effective, low-regret approaches to de-carbonising heating involve reducing demand through improved building efficiency measures, and leveraging existing infrastructure to limit the costs and risks of major re-design or re-purposing schemes. The single most effective strategy would be to ensure measures to improve building energy efficiency are backed by post-construction testing to ensure these measures work as expected and deliver the amount of consumption reduction that is predicted in the design phase. Without this learning, and making building designers accountable for outcomes, building efficiency measures could be little more than expensive box-ticking exercises.

Large-scale infrastructure projects that rely on as yet unproven or uncommercial technologies should be avoided.

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