Pathways to Net-Zero: Decarbonising the Gas Networks in Great Britain Prepared for: Energy Networks Association Submitted by: Navigant Europe Ltd. 5th Floor, Woolgate Exchange 25 Basinghall Street London EC2V 5HA +44 20 3880 0800 navigant.com Reference No.: 207594 21 October 2019 Confidential and Proprietary ©2019 Navigant Consulting, Inc. Do not distribute or copy Pathways to Net-Zero: Decarbonising the Gas Networks in Great Britain TABLE OF CONTENTS Executive Summary ................................................................................................ iv 1. INTRODUCTION .................................................................................................... 1 1.1 Role of Gas Today .................................................................................................................. 1 1.2 Climate Change Context ......................................................................................................... 1 1.3 Project Overview ..................................................................................................................... 1 2. 2050 ENERGY SYSTEM ....................................................................................... 3 2.1 Modelling Approach ................................................................................................................ 3 2.1.1 Sectoral Scope ........................................................................................................... 3 2.1.2 Geographic Scope ...................................................................................................... 3 2.1.3 GHG Emissions .......................................................................................................... 4 2.2 2050 Scenarios ....................................................................................................................... 4 2.2.1 Scenario Definitions .................................................................................................... 4 2.2.2 Annual Energy Supply ................................................................................................ 6 2.2.3 Peak Energy Supply ................................................................................................... 8 2.2.4 Total Energy System Cost .......................................................................................... 9 3. PATHWAY TO A DECARBONISED ENERGY SYSTEM .................................... 11 3.1 Preparing for Transition ......................................................................................................... 13 3.1.1 Gas Safety, Metering and Billing Regulations .......................................................... 14 3.1.2 Trials and Certification of Key Technologies ............................................................ 15 3.1.3 Policy, Commercial Models and Funding Mechanisms ............................................ 16 3.1.4 Skills and Labour Capacity ....................................................................................... 19 3.1.5 Raise Awareness of the Transition to Net-Zero ....................................................... 19 3.2 Facilitating Connections ........................................................................................................ 20 3.2.1 Standardise Connection Requirements for Low Carbon Gas Production ................ 21 3.2.2 Implement Grid Capacity Solutions to Facilitate Biomethane Injection .................... 21 3.2.3 Biomethane Deployment in Off-Grid Buildings ......................................................... 22 3.2.4 Reducing Fugitive Methane Emissions .................................................................... 22 3.2.5 Network Planning for GB Gas Grid Infrastructure Needs ......................................... 23 3.2.6 Demonstration of Hydrogen Production with CCUS ................................................ 24 3.2.7 Deployment of Low Carbon Heat Systems .............................................................. 24 3.3 Expanding Supply ................................................................................................................. 28 3.3.1 Anchor Hydrogen End-Users ................................................................................... 29 3.3.2 Small-Scale Hydrogen Storage ................................................................................ 30 3.3.3 Hydrogen-Ready Appliance Roll-Out ....................................................................... 30 3.3.4 Biomethane Supply via Anaerobic Digestion ........................................................... 33 3.3.5 Demonstrate Bio-SNG Production Technology ........................................................ 33 3.4 Expanding the Demand Base ............................................................................................... 35 3.4.1 Hydrogen Blending for Flexible Network Management ............................................ 35 3.4.2 Creating Hydrogen Clusters ..................................................................................... 36 3.4.3 Hydrogen Clusters .................................................................................................... 37 3.4.4 Large-Scale Hydrogen Storage ................................................................................ 38 Confidential and Proprietary Page i ©2019 Navigant Consulting, Inc. Do not distribute or copy Pathways to Net-Zero: Decarbonising the Gas Networks in Great Britain 3.4.5 Bio-SNG Commercialisation ..................................................................................... 39 3.5 Increasing Low Carbon Gases .............................................................................................. 40 3.5.1 Changing Hydrogen Production Profile .................................................................... 40 3.5.2 Creating Larger Hydrogen Zones ............................................................................. 41 3.5.3 Biomethane in Transport .......................................................................................... 42 3.6 100% Low Carbon Gases ..................................................................................................... 45 3.6.1 Role of Gas Interconnections ................................................................................... 46 3.6.2 Regional Summaries ................................................................................................ 47 3.6.3 End-User Perspectives: Industry .............................................................................. 48 3.6.4 End-User Perspectives: Buildings ............................................................................ 49 4. IMPACTS ALONG THE PATHWAY .................................................................... 50 4.1 Gas Quantities....................................................................................................................... 50 4.1.1 Network Gas Quantities ............................................................................................ 50 4.1.2 End-Consumption Quantities ................................................................................... 51 4.1.3 Low Carbon and Renewable Gas Production .......................................................... 52 4.2 Energy System Costs ............................................................................................................ 55 4.3 Gas Network Operations ....................................................................................................... 56 4.4 Carbon Emissions ................................................................................................................. 56 4.5 End-User Interventions ......................................................................................................... 58 5. PATHWAY CHALLENGES ................................................................................. 60 5.1 Commercial Viability of CCUS .............................................................................................. 61 5.2 Biomass Import Availability ................................................................................................... 62 5.3 Hydrogen Production Costs .................................................................................................. 64 5.4 Industrial Adoption of Hydrogen ............................................................................................ 65 5.5 Building Renovation .............................................................................................................. 66 5.6 Network Configuration ........................................................................................................... 66 Appendix A. EXPERT ADVISORY GROUP ENGAGEMENT ................................A-1 1. Workshops ............................................................................................................................ A-1 A.1.1 EAG Workshop 1. (London – 23 March 2019) ................................................... A-1 A.1.2 EAG Workshop 2. (London – 01 May 2019) ...................................................... A-1 A.1.3 EAG Workshop 3. (London – 20 June 2019) ..................................................... A-2 2. Other stakeholder engagement ............................................................................................. A-3 Appendix B. INFO-GRAPHICS ..............................................................................B-1 Appendix C. LOW CARBON