More than a pipe dream?
The gas lobby has been relentlessly banging the biomethane drum for the past year. But is anyone really listening? Utility Week speaks with Marcus Hunt, co-chair of the Green Gas Taskforce, to find out if the message is being heard by those who will determine the green gas’s future.
By Rob Horgan, deputy editor
More than a pipe dream?
The gas lobby has been relentlessly banging the biomethane drum for the past year. But is anyone really listening? Utility Week speaks with Marcus Hunt, co-chair of the Green Gas Taskforce, to find out the message is being heard by those who will determine the green gas’s future.
By Rob Horgan, deputy editor
Upon introduction, SGN business development director Marcus Hunt immediately hands me a dossier summarising five reports that the Green Gas Taskforce (GGT) has been busily working away on during its first year. They cover everything from sourcing the feedstock for mass biomethane production to the role the green gas could play in decarbonising HGVs.
It’s an impressive return, with a sixth report on the economic case for biomethane launched to coincide with the anniversary of the taskforce’s inception.
Set up, in Hunt’s own words, to “shout about” the potential of biomethane, the GGT’s message has become impossible to ignore for anyone concerned with energy or energy policy during the past 12 months. But how much progress has been made in realising the GGT’s biomethane vision and are we any closer to seeing a major uptick in biomethane usage? Utility Week puts these questions to Hunt, the taskforce’s co-chair, on the eve of the GGT turning one.
What’s the aim?
When the GGT was established, it had three core asks of government: to set a national target for biomethane; for biomethane to be categorised as zero carbon within the emission trading scheme (ETS); and to establish a long-term investment framework to support biomethane production.
Has it achieved any of those? Well, no, not yet, Hunt admits. While those key asks will “take a bit more time”, Hunt is optimistic that the dial has already shifted.
“We're starting to get a bit of traction, and we’ve had quite a bit of positive support from the likes of NESO (National Energy System Operator) and with Ofgem,” Hunt says. “We’re starting to see the fruits of our labour and one year on I think we’re making some really good progress. We’re pushing really hard on those policy asks and we’re having positive conversations.”
One area where the taskforce has seen quicker progress than anticipated is within the latest future energy forecasts drawn up by NESO. In November, the systems operator included a sizeable amount of biomethane within its Future Energy Scenarios (FES 25) – something Hunt admits the taskforce was not expecting to see this early into their campaign.
Amount of biomethane that could be injected into the grid by 2050 under NESO's Falling Behind pathway
Amount of biomethane that could be injected into the grid by 2050 under NESO's Holistic Transition pathway
Amount of biomethane that could be injected into the grid by 2050 without negatively affecting agriculture, according to the GGT
Under its ‘Holistic Transition’ pathway, NESO forecasts that 36TWh of biomethane would be injected into the gas network by 2035, rising to 64TWh by 2050. Even under its ‘Failing Behind’ scenario, biomethane input would increase to 17TWh by 2035 and 35TWh by 2050.
“We spent a lot of time engaging with NESO but to be honest we didn’t think they would put anything really into the FES 25 picture,” Hunt says. “We thought we were going to have to wait quite a long time before they acknowledged it, but NESO has been really positive and engaged really well with us.”
While welcomed by the GGT, NESO’s projections fall someway short of the taskforce’s own assumptions that 120TWh of biomethane could be injected into the gas grid by 2050 without having a negative impact on agriculture by maximising crop rotations.
Hunt, however, is not perturbed by the gap between the figures. “It was probably too much to go from zero to 120TWh in one go, so I think they've taken an appropriately cautious position,” Hunt adds. “But I know they're still doing quite a lot of work on it. […] There are various parts of NESO that are looking to build out the evidence base and to be fair to them, and I totally respect this, they want to be able to demonstrate it to themselves, rather than just take our word for it.”
Hunt adds that he is confident that NESO will reach the same conclusion as the GGT when it comes to biomethane’s potential, in part because they are using the same consultants that drew up the GGT’s ever-growing catalogue of reports.
“They're coming up with the same answers. So, I think they will progressively move up and become more ambitious. But I think with all these things, you do it in a phased approach.”
“We’re starting to see the fruits of our labour and one year on I think we’re making some really good progress. We’re pushing really hard on those policy asks and we’re having positive conversations.”
Marcus Hunt, business development director, SGN
Persuading the politicians
The next piece of the puzzle would be for the government to formally set a biomethane target. The taskforce would like this to be in the region of 100 to 120TWh by 2050. That target doesn’t assume any more land use for biomethane production than under the CCC land use targets and carbon budgets, Hunt says. “We would like to see the government set that target because it sends the right message to the sector and to investors.”
Hunt believes that setting a national target is something the government could do “very easily”, building off the back of NESO’s FES.
To achieve the 120TWh target, 40 new plants would be required to come online each year in the late 2030s, building on the 130 that already exist in the UK today. But those plants, Hunt says, will only get built if there is an ambitious target to aim for.
The GGT’s other policy asks, might take a bit longer, Hunt concedes.
On changes to the ETS, Hunt says that there are already positive signs given the government has signalled its intent to align the UK’s scheme with the European equivalent. “How long that's going to take them to do, is the bit that is difficult to work out,” Hunt adds.
In the interim the taskforce believes that the government could implement a workaround which wouldn’t require legislative changes: “We've sent in a briefing note to government to show that there's a way you can do this in a sort of a minimum viable product way, without having to do all the legislative changes yet.
“So, you could set a guidance-based approach and that would send a really strong signal to the industrial and commercial market that this is going to change eventually.”
Hunt adds: “We just want to see it come forward and give that some certainty. The ETS is moving, but it's not moving as fast as we would like.”
Number of new biomethane plants needed each year in the late 2030s to hit 120TWh by 2050
Number of biomethane plants in the UK today
In terms of time scale, Hunt says the taskforce would like to see a clear timeline for changes to the ETS around this time next year.
The third core policy ask from government has a more pressing time limit on it. With the current iteration of the Green Gas Support Scheme (GGSS) due to wrap up in 2028, time really is of the essence to draw up a replacement scheme. Hunt fears that failing to do so with any impetus will inevitably continue the trend of short-term sticking plasters.
“The problem with the GGSS is that it's a bit of a roller coaster, because it just keeps getting extended. Or, even worse, when it changed from the Renewable Heat Incentive to GGSS, there was a bit of a hiatus,” Hunt says. “What we really need is a signal around long-term certainty that investors can start to bank on. Trying to build up the supply chain or get projects through the various development cycles is risky when you don't know what that future looks like.”
It’s a point supported by NESO within its FES 25, which states that certainty around a long-term support mechanism beyond the GGSS is essential to incentivise greater biomethane production.
Hunt adds that recent geopolitical events, such as the conflict in Iran, helps to strengthen the case to accelerate talks around biomethane support.
He adds: “We are not where we were 12 months ago. We know we can develop homegrown renewable gas, which is zero carbon. We know we've got the feedstock to do it, and our economic analysis suggests that by 2050 we could reduce gas imports by about 60% if we reached the 120TWh biomethane target.
“Homegrown biomethane, from an energy security perspective, is pretty cost competitive and reduces the need on LNG imports from various parts of the world. It just seems like it's a bit of a no brainer from that perspective.”
Hunt adds that the technology is already proven, with 130 plants in operation and another 600 anaerobic digestion plants that are producing gas for CHPs which could be easily converted. “This isn’t blue sky thinking, we’re already doing this. It’s just about scaling up,” Hunt adds.
Home heating headache
The government’s current hard-nosed stance on electrification of home heating could end up being the taskforce’s biggest hurdle to overcome. While there has been a recent softening of heat pump targets, the current administration is unwavering in its desire for full electrification as the primary means of heating our homes in the future.
One of the GGT’s haul of reports focused on the role bio-hybrid heating systems could play in decarbonising heat. It concludes that hybrids offer the lowest clean heating solution for 30% of households; can deliver 90-95% emissions reductions by 2030; and significantly minimise the upfront costs of changing heating systems.
However, the government has time and again passed up the opportunity to extend subsidies to hybrid systems. The most recent example of which was during the Warm Homes Plan (WHP), where more money was pumped into the Boiler Upgrade Scheme, but government resisted pressure to wider its scope to cover hybrids.
Hunt admits this is a sticking point and the lack of consideration for hybrids in the WHP was particularly disappointing.
“There's a real risk here that the current government push a policy that actually isn't working, and therefore it's not achieving their objective,” Hunt says. “At some point you have to look at the evidence, and say, ‘well, if it's not working, what do we have to do?’,” alluding to heat pump installation figures which are still below the government’s projections.
“If you want to achieve that policy objective, at some point you're going to have to do something different. And we're not saying don't give people the option to still put heat pumps in. All we're saying is give them the option to do something else as well, because if that works, then you will get to your policy objective more quickly than carrying on a path that isn't working.”
The GGT chair adds that the taskforce has “tried very hard to land the hybrid message [but] certainly haven't given up”.
There’s little chance of the biomethane drum going quiet any time soon. However, question marks remain over how long it will take for those in Whitehall to fully take their fingers out of their ears. Decisions taken during the next 12 months will be pivotal to the future of the green gas.
