Cadent host Energy and Industry Reception at the Conservative Party Conference
Cadent’s chief executive, Chris Train OBE welcomed Greg Clark, secretary of state for Business, Energy and Industrial Strategy (BEIS) to the Energy and Industry reception hosted by Cadent at the Conservative Party conference on Tuesday 3rd October.
As the country’s largest and newest gas network company, director of network strategy and safety, David Parkin set out Cadent’s vision for the role of a green gas network in delivering the lowest cost, most practical and least disruptive pathway to decarbonising heat and transport.
David’s speech is in full below:
Conservative Party Conference – Reception Speech
Secretary of State, Members of Parliament, distinguished guests. I am delighted to have the opportunity to say a few words this evening on behalf of Cadent, the UK’s largest gas distribution company.
The gas industry is over 200 years old. When gas was first used commercially for lighting, heating and cooking, we were still in what is now nostalgically called the industrial revolution. It was a time of great change; social upheaval and technological innovation.
200 years on, gas still remains the centrepiece of the UK energy landscape, but it is very much the unsung hero. Two thirds of our final energy use (excluding transport) comes from gas for heat and electricity generation. Each and every year, the gas networks transport twice as much energy as the electricity networks, and, at peak times, at 5pm on those cold winter evenings, this can be 4 to 5 times as much.
But we find ourselves facing a significant conundrum – what role does a gas network play in our new industrial revolution of decarbonisation?
As policy-makers, regulators and industry, we need to return to a debate around decarbonisation of energy and not simply focus on electricity. Let us not forget that electricity only contributes around a third of UK emissions. As a nation, we are making great strides towards greening our electricity system – but we are making virtually no progress in reducing emissions associated with heat. This is, in many respects, a far harder problem to solve. Previous heat policy statements talked about widespread electrification of heat – but this is fraught with economic and practical challenges. Today we continue to see around 80 gas boilers installed for every electric heat pump. Economic studies suggest that the cost of electrification of heat could be billions of pounds more expensive than a pathway which seeks to “green” the existing gas network. Using the gas network would be over £10,000 cheaper per customer between now and 2050.
The gas industry stands ready to lead this transition to a low carbon heat economy. This may sound counterintuitive, but we believe that continuing use, and repurposing of the existing gas networks is the best option - it is the lowest cost, the most practicable, and the least disruptive to customers.
At Cadent, we safely and reliably transport gas to 11 million customers all the way from the River Thames to the Lake District. Today, around 1% of gas in our network is ‘green gas’ – renewable energy coming from anaerobic digestion. We are building on these small but significant beginnings to develop other technologies. Along with the Department for Transport, we are investing in an emerging technology called Bio Syngas. This generates grid quality natural gas from domestic waste and is increasingly recognised as a sustainable transport fuel. In another innovation first, we are building a project at Keele University to demonstrate blending of hydrogen with natural gas to reduce the carbon intensity of heat. And ultimately, like many of our colleagues across the industry, we foresee a strong future for a hydrogen economy, built using our existing, repurposed gas infrastructure.
Our recently launched ‘Liverpool / Manchester Hydrogen Clusters’ project brings much of this innovative thinking together. It is an ambitious, but buildable plan, to undertake large scale conversion of industrial gas users to hydrogen, capturing the carbon dioxide and exporting it to storage facilities in the Irish Sea. We are working with stakeholders to develop our roadmap for this project and it plays centrally into debates around local circular economies and regional devolution.
Gas will also play a key role in supporting the decarbonisation of transport. The ground breaking connection of a Compressed Natural Gas filling station to our gas network at Leyland, close to us here in Manchester, shows that the gas infrastructure is ideally placed to support the development of clean air zones and lower carbon transport. This facility is being used by John Lewis Waitrose for their HGV fleet fuelled by renewable gas providing an 80% saving in carbon dioxide and reduced levels of particulate emissions.
In making this vision of heat and transport decarbonisation a reality we will create significant economic activity and develop a new, green, world-leading industry, ideally positioned to export this expertise and learning around the world. To make this happen, Cadent believes that Government and our regulator Ofgem have a great opportunity now to work together to set a strategic direction to facilitate this pathway. Our next network price control, RIIO 2, commencing in 2021, will set our capital investment plan for the next decade. The next 1-2 years are crucial in making long term decarbonisation of heat and transport a central element of this price control.
As an industry, we anticipate the Clean Growth Plan will be a first step in a commitment to a clear roadmap for heat and transport decarbonisation with green gas as a central solution. With this approach, we believe we can deliver a trajectory equally as successful as the journey that electricity is on today. Ultimately we will deliver our 2050 emission reduction commitments with a low cost, practicable solution that customers will support.
Very many thanks for your attention, and I am now pleased to invite the Secretary of State, Greg Clark, to say a few words.
Chris Train, Greg Clark and David Parkin discussing The Future Role of Gas.