Next steps for UK gas networks - the RIIO-2 price control...

Next steps for UK gas networks - the RIIO-2 price control framework, decarbonising assets, and preparing infrastructure for hydrogen and low-carbon heating

The agenda:

Developing the gas transmission network - resilience, efficiency and decarbonisation

Preparing the grid for net-zero - cross-sector commitment and opportunities for greening as part of RIIO 2

The next RIIO 2 regulatory period - implications for network operations and the road to low-carbon gas supply

RIIO GD2 and the path to net zero

Ensuring benefits to consumers - reducing energy bills, designing new services, and increasing the supply of cleaner gas to households

Priorities for a safe transition to hydrogen

Next steps for innovating the network business model, industry collaboration, and readying the grid for low-carbon energy sources

Scaling up hydrogen production and gas network decarbonisation - connecting heavy industry users and reducing commercial barriers

Preparing the gas and heating systems for low-carbon heat and the decarbonisation of households Policy for gas network innovation, decarbonisation, and a pathway for contributing to net-zero

The background and key developments:

Of gem’s Draft Determinations for its proposed price control framework

RIIO 2 - for years 2021 to 2026, with core features including:

decarbonisation - a commitment to invest £25bn in upfront funding for greening the energy system, through enhanced maintenance, operation and modernisation

innovation - a minimum of £630m in support, including for low-carbon alternatives to natural gas

rate of return - significant changes to the base rate on equity for network operators, effectively halving the permitted rate of return, while reducing energy bills for consumers

government policy and direction at a particularly busy time, including:

the PM’s Ten Point Plan for a Green Industrial Revolution - including new investment in hydrogen production, trials with using hydrogen for heating and cooking in homes, and energy efficiency in homes and public buildings - and government due to publish its Hydrogen Strategy in 2021 and consult on business models

Green Gas Levy - announced in Budget 2020 aimed at helping fund low carbon fuels but with energy suppliers responding negatively to Government consultation, citing the regressive nature of plans for a fixed charge levy

BEIS Energy Innovation Programme - at least a doubling of funding also announced in the Budget

heavy industry decarbonisation - including funding for scaling up hydrogen production, as well as the Low Carbon Hydrogen Supply Competition

the Energy White Paper - expected this Autumn, which is due to provide a development and decarbonisation roadmap for gas and other forms of energy up to 2050

the recently announced review into offshore oil and gas licensing regimes, as part of attempts to reach net-zero targets

the Future support for low carbon heat consultation - on policy and technological support mechanisms for decarbonising heat in the UK

the Heat in Buildings strategy - expected later this year

UK embraces hydrogen-fuelled future as transport hub and train announced - trial of hydrogen-powered train and the Hydrogen for Transport Programme

SOURCE: https://www.westminsterforumprojects.co.uk/publication/The-future-of-gas-networks-in-the-UK


Another example of Gas being our way forward in the future, let the demand rise.