That this House has considered the future of the gas grid.
It is a pleasure to lead a Westminster Hall debate for the first time with you in the Chair, Dame Siobhain, in particular given that it is my birthday today. [Hon. Members: “Hear, hear!”] Thank you, everyone.
I thank colleagues from across the House for joining me in this important discussion about the future of Britain’s gas grid. First, I pay tribute to the men and women who work in our gas industry, from extraction and refining through to transmission and product engineers. They literally keep the lights on and our houses warm—not that we need a lot of assistance with heating in the month of June, but of course we rely on gas heating for much of the year.
I take this opportunity to wish my hon. Friend and office mate a very happy birthday. This is a very important debate, and I am grateful to him for securing it. I am looking forward to the discussion and I have much to share later, but for now I emphasise how timely the debate is as we face uncertainty in national security and a huge energy transition that will create opportunities as well as challenges.
I thank my hon. Friend for his intervention and I pay tribute to him for all his years of work in the gas industry and for the knowledge that he brings to the House and indeed to this debate. I look forward to hearing from him later.
Previously, I worked for the Energy and Utilities Alliance, which is a trade association primarily representing companies in the gas heating industry. Recently, however, I had a heat pump installed at home, so I will not be using gas at all in future. I am certainly not a believer in silver bullets or dominant solutions. That heat pump cost £15,000, though, and the installation was fraught with complications, so it is fair to say that I have mixed views in this space.
Gas is an essential part of our energy system, accounting for 40% of the UK’s total energy consumption and about a third of total electricity generation. Crucially, it provides vital flexibility to make up for peaks and troughs in generation from renewables, which should of course be our focus—but they cannot be the whole solution for the foreseeable future. Indeed, the Government’s clean power by 2030 mission foresees a role for gas power stations as flexible generation for up to 5% of demand, but it will take a huge amount of energy storage to enable us to reduce our gas usage for power generation even to that level.
Looking ahead, the National Infrastructure Commission and the Climate Change Committee have recognised that gas, in one form or another, will continue to play a vital role in the energy system for decades to come, as a crucial component of a diverse and secure energy supply. All realistic projections for the UK’s energy transition envisage a continued role for gas, alongside carbon capture and storage and hydrogen, which I will come on to.
A key area of interest to me—and, I am sure, to every Member wishing to contribute to this debate—is the role of gas in domestic heating. Nationally, the gas grid serves more than 24 million homes and half a million businesses. It carries three times more energy than the electricity grid does annually and, on peak winter days, that figure rises to five times as much. Eighty-three per cent of homes rely on mains gas, and in my Cannock Chase constituency 95% of households are on the gas grid. Meanwhile, 6,460 households in my towns and villages live in fuel poverty.
The Government are doing really important work on social justice and the environment, but my constituency is similar to my hon. Friend’s in terms of fuel poverty. Is he aware that, of the £300 million spent on the boiler upgrade scheme over the past few years, only 3% of grants in Cambridgeshire went to Peterborough, the poorest constituency? As we advance and develop these schemes, we need to root social justice alongside carbon reduction.
I could not have put it better myself. My hon. Friend must have been reading my mind, because I was about to come to that point about my neck of the woods.
My fear is that, without a substantial shift in the cost barrier and a clear focus by the Government on inequality, as my hon. Friend said, decarbonisation inequality will widen. That inequality is apparent in the number of boiler upgrade scheme vouchers issued in the three years to March this year. That stood at just 27 for my Cannock Chase constituency but 316—nearly 12 times as many—in North Devon.
One solution that is not spoken about as much as it perhaps should be is the hybrid heat pump—the combination of a combi boiler with a smaller heat pump. Those systems typically use the heat pump for space heating and hot water production almost exclusively for most of the year, with the gas boiler supplementing it on cold days or when a boost of heat is needed.
I wish my hon. Friend a happy birthday. My constituency has very small houses with not much space, and heat pumps might not always be an option. There are lots of flats with no outside space. Does he agree that other technologies, such as heat batteries, might also be an option, and that it would be worth the Government’s considering whether they should be included in the boiler upgrade scheme and assessing whether the current VAT situation is the most useful?
Absolutely. That was a topic of huge discussion when I worked in the sector. I go back to my point that there are no silver bullets or dominant technologies, or at least there should not be. We need to ensure that each household—smaller properties, in particular, of which there are many in my constituency—has the right solution. She is right that we need to consider a range of options, and I am sure the Minister will touch on that.
Hybrids were the topic of discussion at a fascinating all-party parliamentary group for energy studies meeting last night. We heard from a Dutch energy expert who explained that hybrids are the norm in the Netherlands. Three provinces have told households that they will not be able to install heat pump-only systems, due to a lack of capacity on the electricity grid. Overloading of the grid is paralysing development in some areas of Holland. With our Government’s ambitious house building target, the message from our Dutch friend was, “Please make sure that Britain doesn’t end up where we are.”
The Dutch are finding that gas demand from households that have installed a hybrid heat pump is down by around 75%, while the increase in electricity demand is minimal. Given that our highly developed electricity and gas grids are very reliably serving the nation, that would seem to be a sensible balance for the UK, too. Substantially reduced gas demand opens the door for zero carbon gases such as biomethane and hydrogen to play a much bigger role in our energy future.
The main barrier to hybrids in the UK is a policy one. The policies we inherited from the previous Government are inconsistent on hybrids. The energy company obligation fully pays for a hybrid installation and the clean heat market mechanism gives 0.5 credits for a hybrid system, but the boiler upgrade scheme does not allow for hybrids at all. I hope the Minister can say something about the Government’s view on hybrids.
Our gas grid stretches over 275,000 km and its operation and maintenance provide highly skilled, well paid, often unionised jobs. It is estimated that the oil and gas sector supports one in every 160 jobs nationwide. Significantly for Scottish colleagues, that figure is around one in 20 jobs in Scotland. We are fortunate to have hundreds of thousands of some of the most skilled energy sector workers in the world. A gradual transition that leverages that as an advantage will help us maintain those good jobs, as well as our technological edge.
It is a pleasure to serve under your chairpersonship, Dame Siobhain. I thank the hon. Member for Cannock Chase (Josh Newbury) for securing this important debate and for his excellent and very well-informed contribution. I wish him not only a happy birthday but success with his new heat pump.
The future of the gas grid will impact all these islands. Gas is a critical component for more than half a million businesses across the country and all the workers that they employ. Research by Robert Gordon University suggests that if Scotland is successful in delivering its 2030 energy ambitions, the workforce—currently about 80,000—will increase by 25%. However, if it is unsuccessful, the workforce could fall by about 40%, with the loss of key skills, capabilities and associated supply chains.
A green future offers the possibility of new jobs by creating certainty for industry and investors. According to the UK Government’s 2021 hydrogen strategy, transitioning to green gases could create 12,000 jobs by 2030 and 100,000 by 2050. That would contribute to a thriving UK economy, increased production, improved public services and global leadership on the climate agenda.
New jobs and the associated economic growth will also complement electrification. Many workers in the gas industry have the very skills needed to secure a net zero future, and that future will be built in, and with, communities with a rich energy heritage, especially those in Scotland, as former fossil fuel jobs are replaced with green jobs.
Low-carbon hydrogen is required for all net zero scenarios. The UK needs to act fast and at scale to ensure energy security and independence to meet decarbonisation targets and achieve its legally binding net zero 2050 commitments. I appreciate that the Minister fully understands these matters.
Existing gas infrastructure can be adapted to deliver low-cost and low-impact net zero solutions. As the hon. Member for Cannock Chase mentioned, renewable biomethane gas can play a significantly larger role in the transition to net zero, reducing the overall cost of the transition and benefiting energy customers. Many of our European counterparts are already making very significant progress in these areas, and we need to catch up.
It is a pleasure to serve under your chairship, Dame Siobhain. I think this is my second Westminster Hall debate, so I am still learning the ropes. Let me put on the record my GMB membership and the support that it has given me; and my previous role, before the election, as deputy general secretary of the Prospect trade union, covering workers in the gas and energy sector.
I thank my hon. Friend the Member for Cannock Chase (Josh Newbury) for securing this debate. I have learned this morning that he shares his birthday with the legend who is Derrick Stone, who also happens to be my dad and who is celebrating his 87th birthday today.
Debates about the nation’s energy security are always of the highest importance, but given the ongoing events in the middle east and uncertainty around the world—as my hon. Friend the Member for Worcester (Tom Collins) said—debating the future and resilience of our energy system has become all the more necessary. The UK runs on gas; 40% of our energy comes from gas. Today every part of our country and economy still depends on it. Our national gas network collectively connects more than 30 large gas power stations, 24 million homes and half a million businesses. That includes several critical heavy industries—to name just a few, glass, chemicals, heavy machinery production, and sugar production and British Sugar around my constituency, in the east of England. They all need gas to produce their products for the British people and for us to sell to the world. We need those industries—and the 1 million jobs that depend on them—not only to stay in the UK, but to grow and thrive here and create more prosperity during the transition.
Our gas grid, with our world-leading national transmission system as the backbone, will play a leading role in the transformation of our energy network. As the Climate Change Committee recently said, many industries—such as those that I have just named—simply cannot fully electrify; they will always need a form of gas to keep their operations running. The discussion on the future of the gas grid is not about whether it will continue to exist, but about what will flow through it—natural gas, as we see today, or clean, home-grown forms of gas, such as hydrogen, in the future.
It is a real pleasure to serve under your chairmanship, as always, Dame Siobhain. I give special thanks to the hon. Member for Cannock Chase (Josh Newbury) for leading today’s debate. We were counting down the last 10 seconds before the debate and the hon. Gentleman walked in on No. 8 —well done! He may have been a bit breathless. I wish him a happy birthday and thank him for his contributions in this House during the time that he has been here. They are always on subject matter that we are all interested in.
If we want to be progressive and visionary in this House, which we do, we need to look to the future for the things that are important. All areas of the United Kingdom are adapting their own strategies to contribute to net zero. Northern Ireland has set a target of net zero emissions by 2050, and developing renewable energy will be a key part of those plans. It is very important that we play our part. The hon. Member for Peterborough (Andrew Pakes) referred a number of times to the whole of the United Kingdom. He is right, because like me and others in this Chamber, with one exception, we are committed to this great United Kingdom of Great Britain and Northern Ireland and what we can do better together—not that we are better than anyone else, by the way. We see the advantages and it is important that we look forward.
I welcome the Minister to his place. I always enjoy the Minister’s responses to our questions. He seems relaxed no matter how hard the questions are. I will not ask any hard questions; it is not in my nature to do so, but I do ask questions to hopefully progress the debate. The Minister knows that my questions will come from a Northern Ireland perspective. He has always answered in the past on what we want to do and what our strategies are back home. I look forward to his contribution. It is also nice to see the shadow Minister, the hon. Member for West Suffolk (Nick Timothy), in his place and I look forward to his contribution as well.
Only last year Northern Ireland’s gas operators took their biomethane case to Stormont. There are two operators, but I want to focus on Phoenix Gas. It has been stated that adding biomethane to the gas network could cut Northern Ireland’s carbon emissions where we have ambitious, but very much achievable, targets. Doing so would deliver significant benefits and create hundreds of new jobs. It is where the potential is. Northern Ireland wants to play its part because the spin-offs for us all are quite significant. Arguments for that include that biomethane is almost identical to natural gas and can be transported through the existing gas pipelines, as the hon. Member for Cannock Chase mentioned. As we have already seen, it has been successfully injected into the gas network at Granville Ecopark in Dungannon. There is a strategy in place and significant progress there, but there is still a lot more to do.
My hon. Friend talked about Phoenix, and the other company is Firmus Energy. Consumers want to see more competitive pricing. In Northern Ireland, there is some degree of competitive pricing, but because the two companies operate in separate parts of Northern Ireland, they do not compete directly with each other. Consumers want prices to be driven down, but it seems to take a long time for Phoenix and Firmus to reduce their prices—they do not always change rapidly—when international gas prices fall.
My hon. Friend is right to highlight that issue. Yesterday, in the hydrogen aviation debate, we talked about how costly energy is at the moment. In the past, we had the tidal wave and sea project in the Narrows in Portaferry in my constituency. The pilot scheme was successful in showing that it could be done, but it did not provide a cheaper price. Today, however, it could. I am quite confident that with a better understanding, and better offers for the supply of gas grid in Northern Ireland, we could ensure that prices would drop—I am confident that they will.
The operators pointed to research by the Centre for Advanced Sustainable Energy Research, which shows that biomethane has the potential to supply 6,000 GWh a year, equal to about 80% of the current gas distribution network demands. That shows the potential, and that it can be done. It would reduce Northern Ireland’s CO2 emissions by some 845,000 tonnes per annum, a fantastic contribution to net zero targets. That shows how Northern Ireland and the UK can work better together and contribute to net zero targets collectively, with advantages for us all. What is done here in England helps us in Northern Ireland, and vice versa.
Yesterday, I spoke in Westminster Hall on the potential benefits of hydrogen in aviation, as I referred to earlier. There are numerous sectors in which hydrogen could play a key role in the transition. The UK Government aim to establish up to 100 GW of low-carbon hydrogen production capacity by 2030. The national gas grid is leading efforts to develop a hydrogen transmission backbone that will repurpose existing gas pipelines to transport hydrogen. Those visionary projects, which can deliver much for us all, are well in hand, but there is a lot more to do.
I look forward to hearing and witnessing how those developments play out in the future. There is so much that the devolved Administrations and institutions in Scotland, Wales and Northern Ireland can do to play a role in the transition to net zero, and this is one of those ways. I ask the Minister very kindly to engage, as I know he does, with the Department of Agriculture, Environment and Rural Affairs and the Department of Enterprise, Trade and Investment back home to ensure that we can be leaders in our green and net zero plans together. Within this great United Kingdom of Great Britain and Northern Ireland, we can do that. Even our friends in Scotland can benefit and help us to benefit. That is the goal I try to achieve in this place.
I cannot let the hon. Gentleman get away with these continual references to Scotland. Of course, whatever the future constitutional arrangements—they are in some doubt—the gas network on this side supplies not only Ireland but, as I understand it, Belgium and part of the Netherlands. There is already a shared international context in how the grid operates.
Of course there is. The hon. Gentleman is a product of Northern Ireland, as his accent shows—although he is now very much a Scottish nationalist—and I believe he recognises the importance of working together. Whether that is within the United Kingdom or further afield is not the issue. I never want to see Scotland moving away from us, because he is my Gaelic cousin, and together with many others, we have the same history and culture; we just have a different idea about the constitution. The people of Scotland, of course, have already spoken on the constitution and, although I know that is a different debate, I say very clearly that we are always better together.
It is a pleasure to serve under your chairship, Dame Siobhain. What better birthday present could my hon. Friend the Member for Cannock Chase (Josh Newbury) have than debating such a crucial and timely topic? I anticipate that perhaps, as he blows out the candles on his cake, as someone who cares deeply about the energy transition, he might wish for something remarkably similar to a clean and green national gas network.
Electrification is inevitably going to be a go-to tool for decarbonising many parts of our economy, but it is equally clear that it cannot do everything. First, gas can do things that electricity cannot. Industry needs it: around half a million businesses in the UK currently rely on gas for their operations, and around 30% of those say that electrification is simply not feasible for them, technically or economically. Those businesses are spread across our nation, not just in clusters, so a national gas system is the only way for UK industry to not only survive but thrive.
Secondly, our national security depends on us having a multi-vector energy system. The UK has always ensured that homes, businesses and critical infrastructure have multiple energy sources available, typically electricity and either gas or oil fuels. As the world becomes increasingly uncertain and dangerous, now is not the time to roll back on the essential principles of security and resilience.
Thirdly, as we face the challenge of rapidly delivering an energy transition, gas provides us with vital flexibility and optionality, which means that we can make it over the finish line in our target time. Industry, transport and heat are all transitioning with uncertainty about the final mix of technologies. Government can secure the successful transition not by picking technologies to win or lose but by specifying a clear set of core energy vectors for the transition and investing in their core infrastructure. I put on record that those might be, for example, electricity, hydrogen and ammonia.
As a case in point, my hon. Friend mentioned that his installation of a heat pump was fairly typical, costing around £15,000. My discussions with industry indicate that the installation of a hybrid heating system, even a new one, would typically come in at under £7,000—a significant difference in the up-front cost, which is a major barrier for homeowners. Alongside that, installation times are shorter, and homeowners avoid the need to install hot water storage tanks or replace radiators.
It is a pleasure to serve under your chairship, Dame Siobhain. I congratulate my hon. Friend the Member for Cannock Chase (Josh Newbury) on securing this important debate.
I, too, commend the Government’s commitment to clean power and our clean energy mission. I will speak about not industry but the impact of the gas grid on rural communities, because many of my constituents do not have the luxury of being connected to the gas grid. Many of them rely on other means of heating their homes, which are subject to price fluctuations and greater disruption, and then shut them out of opportunities. Before I turn to the impact on rural communities, however, I put on record my support for reaching net zero, decarbonising our economy and decarbonising our energy system; I look back at the relatively halcyon days when it was not politically controversial to say that, and hope at some point that we can get back to that.
It is vital that rural communities are at the heart of these discussions, and I hope that the Minister will bear them in mind when he goes back to his Department. For many communities across Northumberland, being shut out of the gas grid contributes to a wider feeling of being shut out from broader opportunities. They are unable to access the essential energy infrastructure that often facilitates the growth of small businesses and local economies and helps to attract tourism.
I read an article last week that said that people in the Coquet valley, of which I represent a small part—it is mainly represented by my hon. Friend the Member for North Northumberland (David Smith)—felt cut off and on the edge of society because they were not connected. That feeling is present not just in the Coquet valley, but across the rural extremities of Northumberland. When I hold my surgeries in those places, I get that feedback constantly. The fact that there is not just inadequate gas, but inadequate electricity and phone signal, emphasises that lack of connection. These communities are not just off the grid; they are shut out from opportunities that urban parts of our country often take for granted.
It is a pleasure to serve under your chairship, Dame Siobhain. I am pleased to speak in this important and timely debate on the future of the gas grid. I thank the hon. Member for Cannock Chase (Josh Newbury) for securing this increasingly urgent debate and for his expertise on the matter, and I wish him many happy returns.
Gas has long been the backbone of how we heat our homes and power our economy. However, times are changing, and so must our approach to energy. The Liberal Democrats fully support a transition away from fossil fuels towards clean, home-grown renewable energy to deal with the energy trilemma that needs to be balanced in energy policy: cutting polluting emissions, protecting people, households and businesses from future price shocks, and strengthening our energy and national security through reliable home-grown clean energy supplies.
The future of our gas grid is a real challenge. It must be defined by clarity, urgency and care, addressing the challenges we have heard today with affordability, the promotion of alternatives—whether dominant or not—their costs, and the resilience and flexibility of our grid. We have heard about the importance of securing multi-vector energy systems throughout this transition, and that is key.
Gas remains the largest source of energy in the UK, accounting for more than half of our carbon emissions and providing 39% of the energy used across electricity, heating and industry. Although it is strategically important to our economy and to people’s lives, that dependency is also a strategic vulnerability. Around half of the UK’s gas is imported, and that reliance is our Achilles’ heel. In times of geopolitical instability, we are dangerously exposed.
The illegal invasion of Ukraine by Putin and the resulting spike in global energy prices highlighted just how risky it is to depend on imported gas. The Climate Change Committee, in its seventh carbon budget, made clear that if we transition away from gas, and there were to be another spike in gas prices due to an incident like the invasion of Ukraine, then by 2040 the average household would be 15 times less sensitive to those price shocks and skyrocketing energy costs.
I am pleased to respond to this debate. I congratulate the hon. Member for Cannock Chase (Josh Newbury) on moving his motion just in time, and on his birthday. He gave an excellent speech, once he got his breath back, and I thought his warning about an overloaded electricity grid was very wise.
There was a lot of agreement in the debate. The hon. Member for Ealing Southall (Deirdre Costigan) joined the hon. Member for Cannock Chase in pointing out the prohibitive cost of heat pumps. The hon. Member for Hexham (Joe Morris) pointed out the particular challenges for rural communities. The hon. Member for Aberdeenshire North and Moray East (Seamus Logan) rightly did his duty representing that part of the country by talking about the jobs that depend on oil and gas.
The hon. Members for Strangford (Jim Shannon) and for East Londonderry (Mr Campbell), from the land of my grandmother’s birth, reminded us of the Northern Ireland experience and the importance of geography when we debate energy. That was reinforced by the hon. Member for Worcester (Tom Collins), who rightly said that we will continue to need a national gas grid, because of the nature of the demand for gas. I thought he was right to criticise the Climate Change Committee for proposing no gas for heating homes. I think the hon. Member for Peterborough (Andrew Pakes) put it well when he said that Britain runs on gas. He noted the challenge of reconciling the policy to decarbonise with maintaining fairness for families.
We must always be honest about trade-offs when we talk about policy, which is one of the things about which I will try to warn the Minister. The Government may come to regret their failure to do so on several fronts, particularly on net zero. Sadly, that is a lesson, especially on net zero, that my party has drawn from its time in office, including the unhappy end of that time.
Many businesses will continue to use gas and do not have the option to go fully electric. Half a million businesses rely on gas, and not all of them will survive the switch to electricity. As the hon. Member for Peterborough mentioned, big industries continue to rely on gas, such as chemicals, ceramics and—we have similar constituency interests—the sugar industry, among many others. Smaller businesses are just as affected. Chip shops, curry houses and many businesses I do not frequent will also face cost increases from electrification because of higher levies on their energy bills. Unfortunately, Ministers have said little to reassure those businesses that there is a plan to help them and to remember them.
It is a pleasure to serve under your chairship this morning, Dame Siobhain. I thank my hon. Friend the Member for Cannock Chase (Josh Newbury) for securing today’s debate, and I wish him a very happy birthday. He gave a breathless speech, which was fantastic, and I do not know what better celebration he could ask for than being in Westminster Hall this morning. I thought at one point that he was going to tell us he got the heat pump as a birthday present, which would have been a significant contribution to the cause. Nevertheless, I hope he has a brilliant day.
My hon. Friend gave a brilliant speech, and in fact we have had a number of important contributions today, highlighting not only the breadth of experience that we have in this House, which I am always hugely impressed by, but generally our ability, particularly in this part of Parliament, to move outside some of our party political boxes and engage with the wider issue. I think that is hugely helpful.
I will return to some of the specific points raised in the debate, but I want to start where my hon. Friend concluded, with his critical point around rhetoric. We need to base the future of our discussions on the gas network in not only fact but pragmatism and a rational look at how we make the best use of an extraordinarily important resource. He also said something that we so often forget in this place: there is no one silver bullet for these things. There are a number of solutions, all of which will play a part in different ways, and we should not discount any of them. Crucially, as many hon. Members have said, if we get this right, there is the potential for tens of thousands of jobs, long into the future, which is so important.
I also thank everybody else for their contributions today. It was good to hear the shadow Minister, the hon. Member for West Suffolk (Nick Timothy), acknowledge—I think for the first time—that there are some lessons to be learned from the past 14 years, although I suspect he has learned the wrong ones, unfortunately. Nevertheless, I will return to some of his points.
Our North sea gas supply and our gas storage infrastructure mean that we can deliver heat and power across the country whenever it is needed. The fact that we so often do not discuss the resilience of the system underlines how resilient it is and how well it does its work. Even during exceptionally difficult moments, such as the “beast from the east” in 2018 or after Russia’s invasion of Ukraine, the gas system continued to meet the needs of millions of consumers. It safely and reliably provides the energy we need.
As our largest primary fuel, representing more than a third of the UK’s energy consumption, natural gas is central to meeting our electricity demands, but it is also crucial that we look towards the future. The gas network itself—the system of underground pipes that transport gas the length and breadth of the country and meet the demands of millions of consumers daily—is critically important.
Looking to the future, the natural gas system is a key enabler of our net zero transition. It will allow us to phase out coal and reduce emissions faster than any other major economy. As the hon. Member for South Cambridgeshire pointed out—I have the figure in miles and she had it in kilometres; that is the difference between Labour and the Liberal Democrats—there are 175,000 miles of pipework in the network associated with various infrastructure. It is an extraordinary thing, and we must remember the absolute scale of it. I pay tribute to the workers up and down the network who keep it going every single day, in really difficult circumstances at times. Some 26,000 workers are employed in the gas system, which demonstrates the size and scale of the industry.
However, it is important that we are not trapped in nostalgia about the system and that we have a clear-headed view of its future. The role of gas needs to change and has already begun to do so, so it is important that we set out how to get the change right. The Government are clear that making Britain a clean energy superpower is one of our defining missions, and that means that gas will play a smaller and smaller role in our electricity generation. That is the right thing to do. In a broader sense, net zero also requires a wide-ranging transformation of the rest of the economy. The transformation will mean a sea change in how infrastructure, industry, business and our homes work. The power sector, domestic buildings and transportation will all have to undergo significant change, and that will require not one solution but many things.
It is genuinely a pleasure to lead this debate on my birthday. Some people might sooner spend their birthday at Alton Towers or on the sofa, but an energy wonk like me would rather be here, among such knowledgeable and passionate Members, to discuss an issue of such significance to our nation’s future.
I thank hon. Members for their thoughtful and well-informed contributions. I am pleased to see the amount of consensus, which is a rare thing or even a dirty word in the current political climate. Many of our constituents believe we spend our weeks shouting at each other, but this debate has been a prime example of the reasoned and respectful engagement that I think defines Parliament.
We have heard from three of our four nations and covered a huge range of angles, from affordability, jobs and industry through to resilience, flexibility and, most importantly, communities and people. I welcome the Minister’s statement of confidence in the gas grid of today and tomorrow. He is right to say that we need to be pragmatic, and I welcome the clarity he has given us today. I worked in the industry for many years, so I know that is something we have not always had from previous Energy Ministers.
I look forward to continuing this debate in the months and years to come. As the Minister said, tackling the hard stuff is what we do in this place. I look forward to a bright future for our gas grid and, therefore, our whole unique energy system. Once again, I thank you, Dame Siobhain, for ably chairing the debate and hon. Members for making it such a rich discussion.
Question put and agreed to.
Resolved,
That this House has considered the future of the gas grid.
Sitting suspended.
Given that gas heating is clearly the cheapest form of domestic heating we have today, the future of the gas grid is not just a technical issue, but a cost of living issue. Heat pumps are a potential solution for many homes, in particular those off the gas grid, but we have to be honest about the persistent cost barriers. With the average heat pump installation coming in at about £13,000 and only just over half of that paid for by the £7,500 boiler upgrade scheme, heat pumps are clearly still the preserve of able-to-pay households and niche house builders.
Gas is clearly a critical industry for many other sectors in the UK, such as glass, cement, ceramics and paper. Those sectors employ more than 1 million people and support essential supply chains, including in defence. Around a third of gas-reliant businesses say they cannot electrify due to technical or economic constraints. Again, those jobs are often in the high-skilled, high-wage sectors that we need more of. Hard-to-abate sectors such as ceramics, which as a Staffordshire MP I have to single out, depend on parliamentarians to navigate a way to net zero that does not leave them behind, and I believe that low-carbon gases could be the answer.
So what does the future look like? It starts with blending hydrogen into our existing network—a step our European neighbours are already taking. Blending even small amounts can kick-start demand in the hydrogen economy, lower the cost of the fuel and give the industry confidence to invest. I welcome the Government’s backing for the creation of a core hydrogen network and the repurposing of parts of the existing gas transmission system to carry 100% hydrogen to industrial clusters, power stations and storage sites across Britain. The Chancellor’s recent vote of confidence in Britain as a leader in carbon capture, utilisation and storage puts rocket boosters under that and will, of course, enable huge emissions reductions in some of the most greenhouse gas-intensive industries.
We also need to talk about the role of renewable gases, such as biomethane, which already contribute about 1% of our gas supply and have plenty of room to grow. Supporting the domestic production of low-carbon gases strengthens our energy security, supports rural economies and reduces emissions. In the light of the introduction of weekly food waste collections across England next April, our anaerobic digestion capacity will be more important than ever, so I ask the Minister to confirm that the green gas support scheme, which was extended to 2028 in the final weeks of the last Parliament, will be maintained at least until then, if not beyond.
What is required for us to decarbonise our gas grid, as other nations, such as the Netherlands, are doing? The replacement of our old iron mains is nearly complete, so that major hurdle is already being cleared. Other core infrastructure will need to accommodate hydrogen, but work is under way. For example, National Gas has already invested £350 million in hydrogen blend-ready compressors, and has demonstrated through its FutureGrid project at RAF Spadeadam that blending up to 20% hydrogen, and even operating at 100%, is both safe and feasible.
As has been discussed many times before, clear regulatory frameworks that enable innovation and investment are critical, as is public engagement, which we often overlook in these technical discussions about the energy sector. We need conversations with the public to be honest and inclusive, and to address concerns about safety, jobs, cost and fairness.
An energy system is only as resilient as the storage capacity that backs it up. When I first entered the energy sector way back in 2016, the Rough gas storage facility in the North sea was threatened with closure, and one of my first tasks was to furiously campaign for it to be rescued by the then Government. Sadly, they did not heed the dire warning from the industry, and Rough closed. It was able to reopen five years later, but only partially. With geopolitical events being what they are, we are suffering the effects of the previous Government’s short-sighted inaction. I am proud to be part of a Government who not only talk about gas storage but actively value it as a critical piece of national resilience.
I ask the Minister to strongly reject the inflammatory rhetoric around the transition that needs to take place in our gas grid, which is often designed to frame the issue in solely negative terms. Talk of ripping out boilers is as inaccurate as it is worrying for consumers. I also ask the Department to drive forward as quickly as possible the opportunities presented by hydrogen produced by carbon capture and storage and renewable energy. This transformation offers real opportunities, thousands of skilled, well-paid jobs, greater energy security by reducing our dependence on volatile international fossil fuel markets, and of course the chance to lead the world in green technology and innovation. The future of the gas grid is not about choosing between the past and the future; it is about building a bridge to a very British net zero.
The Scottish gas network is already fuelling 10% of households in Scotland on their network with biomethane, and there are plans to grow that to 1 million homes by 2031. The prize on offer is not only a green gas that can sustainably decarbonise energy-intensive industries and retain jobs, but the growth of a new sector that will add up to 12,000 jobs by 2030 and £13 billion in gross value added.
A word about Peterhead power station in my constituency: commissioned in 1982, the power station continues to play a critical role in our energy supply, and also has the potential to play a major role in our future systems. The Peterhead carbon capture power station is a joint venture with Equinor, and the plan is to build a new 900 MW power station that will use technology to capture a minimum of 90% of carbon emissions. As I say, that is a minimum: SSE tells me that it could be as much as 95%.
The station would connect to a shared infrastructure being developed by the Scottish cluster, meaning that CO2 captured from the power station will be safely transported and stored offshore at the Acorn storage site. The existing station directly supports 80 full- time employees, three graduates, 13 apprentices and 30 contractors, but with the new development we could be talking about 1,000 new jobs during construction and 240 new jobs on an ongoing basis. I will come back to the issue of sustainability, because construction is one thing but sustaining jobs into the future is quite another.
I want to acknowledge the role of SSE Thermal in my local constituency in supporting local community projects. They are very important to local communities, particularly young people, schools, and businesses, as well as the environment.
Lastly, I will turn to Acorn. As the Minister knows, £200 million was announced last week to support the Acorn carbon capture and underground storage project in my constituency. I am sure that others have heard in the Chamber that it has the potential to capture and store the amount of carbon gas emitted since before the industrial revolution—that is the scale of the project.
The £200 million represented a start, but it is small compared with the £9.4 billion earmarked in the spending review for carbon capture, usage and storage before 2029. The investment is very welcome, especially in the context of the previous Government’s needless delays, but I also want to mention in connection with Acorn how important the connectivity with Grangemouth will be. Some of my colleagues asked me how many pipes there are between Acorn and Grangemouth. There are five, so there is no problem with the infrastructure. We do not need to spend billions of pounds building this thing; it is already there. That is really important to understand.
Given what is at stake for the north-east—jobs, supply chain opportunities and our green industrial transformation as part of climate action and economic growth—Scotland must be given our fair share. Two hundred million pounds is a start, but we want to see that figure climb very quickly, once the final investment decision is made, to the scale of the £22 billion already invested in England. As this debate has shown, the future of the gas grid is about working in tandem with projects such as Acorn, so the availability and implementation of funding is something that we should all push for.
I want to make one final point, from the workers’ perspective. I have spoken about the massive construction opportunities that will come with these projects. However, if we take a project such as the Viking project in the far north of Scotland, in Shetland, we are talking about 2,000 jobs during construction and a very small number—perhaps 200—afterwards, so it is fine to construct the projects, but we need to have solutions that work for people in the longer term. We need sustainability; we need regulation, so that workers are not taken advantage of; and we need to implement the Labour Government’s vision for better contractual terms and conditions.
I look forward to a very bright future for the north-east of Scotland, playing its role in our transition to a new future for the gas grid.
I am a passionate advocate for clean power and supporter of this Government’s green ambition. It will usher in industrial renewal and breathe new life into neglected towns and cities such as mine—Peterborough. It has the potential to create jobs, bring in new investment and deliver the long-term energy security that our country needs.
This is not just wishful thinking or some hypothecated plan for 10 or 20 years’ time. It is happening right now in places such as my constituency. Peterborough is fast becoming the King’s Cross of hydrogen—a hub where innovation, infrastructure and ambition meet. At the Peterborough gas compressor station, the crossroads of our national transmission system, National Gas, as my hon. Friend the Member for Cannock Chase said, has already announced £350 million to install new, state-of-the-art hydrogen-blend-ready turbines—an investment that initially will create 100 jobs and apprentices in Peterborough, with the potential to grow more across the UK. That investment not only will help locally to create jobs, boost the economy and grow our skillset, but will be vital in delivering the Government’s green growth mission nationally. Today that compressor station moves natural gas across the country to fuel heavy industry and power stations, but it is now able to move hydrogen instead, starting with a blend, and eventually moving to 100% hydrogen if we get there and decarbonising the country while protecting jobs in industry in all parts of the United Kingdom. That is the role Peterborough is playing in the green transition, and it is the future of the gas grid. Such projects show that hydrogen has a critical role to play in the future of British energy. I am proud that my constituency is playing a key role in supporting this Government’s ambitions and that transition.
However, to really kick-start that revolution there are some quick, easy actions that the Government can take. I have a few questions, which I hope the Minister will be able to expand upon in his remarks. Can the Minister confirm when we might see the release of the consultation on hydrogen blending into the gas transmission system, which was promised by the last Government and, we are told, may be coming shortly? That would help kick-start the hydrogen economy and unleash a wave of investment in Britain. What are the next steps in the Government’s plans for a core hydrogen network, as recommended by the Climate Change Committee and others, and how will that build on the exciting and excellent steps we have seen in recent days with Cadent and others through the Government’s announcements around hydrogen? Finally, what assessment can the Minister give us of the skills need and skill potential in communities such as mine that are crying out for good, decent, unionised opportunities that the gas transition could provide, not just in Peterborough but throughout the UK?
It has been a pleasure to speak with passion about my constituency again this morning, and also with passion about this Government’s drive to deliver us the green transition. Gas networks have helped build our industrial past and our current prosperity. Our gas networks of the future have the ability to power our transition and movement to net zero, while bringing communities with us.
Industry has already indicated that it will be ready, in four years, to make all its boilers 100% hydrogen-ready. It also indicated to a previous Secretary of State that it would provide price equivalence with the products in existence then. I recognise that the Climate Change Committee has tried to move us along by suggesting that there is no role for gas in the future of heat, but as someone who spent my entire career trying to decarbonise heat, I would humbly say that, although that guidance was well intended, it might be misguided.
Even as electricity remains our primary energy vector, reliable energy generation depends on large-scale energy storage, and that means gas. A system that can produce, store and utilise clean gas is vital for electrification to be successful. Although gas is seen as cheap and dirty today, it does not have to remain so tomorrow. Its versatility means that it will be a valuable resource in the future. While forecasts are for the cost of clean gas to reduce dramatically in the future, its role will be one where its value is recognised, and cost parity with today is not a prerequisite for a future clean gas market.
Private capital has successfully been released to deliver billions of pounds of investment into our gas networks, making them safe, fit for the future, and ready for future gases such as hydrogen and methane. More capital stands poised and ready to be invested. However, our previous Government, who should be congratulated on putting the UK in a leading position for a few years in the 2010s, then created a cloud of uncertainty that has left our gas industry in limbo.
Our mission to make the UK a clean energy superpower should be a powerful beacon that burns that uncertainty away, but it must include a tangible future role for the gas networks in our envisaged energy system. Ambition must be converted into some techno-economic goals that are clear and certain. For gas, that means committing to two things: storage and transportation. The prize is for the UK to once again lead and be an innovating leader in a new global energy outlook.
It has become dazzlingly clear from my discussions with industry that storage is a key enabler. It provides a price and a sink for producers to make clean gas, and a price and a source for users to plan their transition. It could be delivered by establishing and planning a progressive build-out of a strategic national clean energy reserve, which could utilise private capital but, crucially, be publicly commissioned, operating in the national interest for resilience and stable markets.
For those markets to develop, storage must be backed up by transportation. Fortunately, that solution already exists in our world-leading gas networks and can be completed through the delivery of a national hydrogen backbone. We could make a decision on blending now, and that would unlock those markets and allow for the large-scale production of clean gas.
The key signal to unlock all that is reassurance from the Government that the gas system, having transitioned to low-carbon gas, has a future for decades to come. That single declaration—one line that says, “We can see clean gas playing a role in the energy future of our towns and cities”—would be transformational. With it, we can ensure that the industrial economy spread across our country has a sure and hopeful future of opportunity and renewal. With it, we can ensure that the UK’s energy system is resilient, robust, secure and a source of strength, not vulnerability, in our national security. With it, we can deliver a deep and rapid energy transition through agility, partnership and UK innovation. With it, we will be on a strong pathway to making the UK a clean energy superpower.
One of the major failures of the last Government was that they did not properly boost and invest in rural economies and the opportunities of people in places such as Otterburn. That has deprived rural residents of lower heating costs, efficient services and opportunities that individuals in urban regions access daily.
What can the Government do to ensure that rural communities such as those dotted around my constituency get the services they need and the energy they depend on—at the price that they deserve—to prevent that feeling of being on the edge of society? Rural communities must not be deprived of basic necessities purely because of their geographical location. We need to ensure that that feeling of being at the extremity ends with this Labour Government.
With the National Energy System Operator, we already have a highly resilient electricity system. I regularly see the community action, investment and spirit that is brought about by storm events, when communities club together to provide for one another. I know that is something continually looked at by communities and organisations working in Northumberland.
I wanted to come to this debate, not because I have any great industrial expertise—I will leave that to some of my illustrious colleagues who spoke before me—but because, in the past, MPs representing my constituency have not been the voice that rural communities need. It is important that MPs from Northumberland make sure that Ministers do not go back to their Departments without first considering the needs of communities that are not connected to the gas grid.
Not proceeding with the transition does not just undermine our national security; it hits people in their wallets. That damages our businesses and economic growth. Energy has never been so costly, and that matters particularly in a cost of living crisis. Today, 11% of households in England live in fuel poverty, including nearly 9% in my constituency of South Cambridgeshire. That means many people have to choose between eating and heating their homes every winter. That is the lived reality of our dependence on the gas grid, tied to volatile international markets. We must remember that in 2022 prices peaked at more than 20 times the 2020 average.
It is clear that ending our overreliance on gas must be a national priority if we are to strengthen energy security, unlock low-carbon alternatives and bring prices down. We need resilience and flexibility in the grid, which is currently provided by gas. The Climate Change Committee and the National Grid have confirmed that, to meet our net zero targets, the UK’s natural gas use must fall by a staggering 90% by 2050, accounting for just 6% of our energy mix—and even then, only if emissions are captured through carbon capture and storage.
There is no escaping the scale of the challenge. With over 85% of UK homes still connected to the gas grid, we face having to overhaul our national infrastructure. Our gas pipeline network spans more than 284,000 km, or nearly seven times around the Earth, so simply abandoning the infrastructure is not an option. We are talking about a massive repurposing challenge. As we have already heard today, that repurposing also needs to cover green hydrogen, low-carbon hydrogen, biomethane, district heating and many other options.
Additionally, policy needs to look at demand, including for new homes and house building. The Climate Change Committee has been clear that no new homes should be connected to the gas grid after 2026, yet we have had dither and delay since 2016. Under the Conservatives, we ditched the zero-carbon homes policy and since then we have been building homes without proper energy efficiency and without the connections through solar panels to the grid that we should have had. We are also still waiting for the future homes standard and other standards to be brought forward.
Those actions were short-sighted, which is why it is fantastic that we have seen the Government take on board the private Member’s Bill promoted my hon. Friend the Member for Cheltenham (Max Wilkinson). It is “the sunshine Bill”, mandating that there will be solar panels on every roof. That Bill will come forward with the future homes standard, which is fantastic. In addition, the future homes standard is committing to low-carbon heating. Today, we have asked whether that mandates how we get to that low-carbon heating with dominant technologies, or whether it should be left to the market to come up with innovations. I will be interested to hear from people with much more expertise than me on that. However, given the time that has already been lost, we must move forward.
Let me pick up on the comments from the hon. Member for Hexham (Joe Morris) about rural communities. While we are considering the cost of decarbonising heating through solar panels, heat pumps and induction hobs, we also have to consider the many people in rural communities who live off-grid. These households also need certainty and direction from the Government about how they can decarbonise their heating. The situation in South Cambridgeshire is similar to the situation in Hexham, with one in five communities living off-grid and relying on heating oil. They are among 4 million people and 250,000 businesses in this situation across the UK, which are often served by small, rural, family-owned firms. In addition, off-grid homes are some of the most difficult and expensive to decarbonise because of their age, rural location and construction methods.
The National Grid’s “Future Energy Scenarios” report estimates that 1 million UK homes will require alternatives to electrified heating because of the high cost of local grid upgrades. Renewable liquid fuels such as hydrotreated vegetable oil offer a drop-in replacement for heating oil. These fuels have already been trialled in rural communities, and the Governments in Scotland, Northern Ireland and Ireland have embraced them as part of their decarbonisation strategies. We now need a comprehensive UK-wide plan and I hope the Minister will confirm that the forthcoming warm homes plan and future homes standard will also acknowledge and address the specific needs of rural off-grid consumers.
However, although we are hearing about the challenges and barriers, within this transition lies opportunity. That is why the Liberal Democrats are calling for a just transition plan to protect jobs, retain skills and support communities whose economies are still built around oil and gas. That means a national retraining programme to help workers to enter the green economy, incentives for oil and gas firms to pivot towards clean technologies, ending the red tape that frustrates climate tech start-ups, many of which are in my constituency of South Cambridgeshire, and finally—as many Members have already said—investment in hydrogen innovation, where the UK can lead with world-class research in its industrial base. We have heard today about hydrogen blending, which could make hydrogen 20% of the natural gas supply, helping to reduce the carbon intensity of gas and meeting the gas demand in the medium term while we adapt our infrastructure.
We are also looking at having a resilient and flexible energy system that could be supported by green hydrogen, with storage and flexible power. We welcome the Government’s recent announcement of investment in hydrogen, but we would like to see that investment being part of a comprehensive plan to support low-carbon technology across the board. We felt that such a plan was absent from the Chancellor’s most recent spending review, so, as we have already heard today, it would be good to get clarity about the role of hydrogen and the level of investment in it.
Like other Members, I have recently had a heat pump installed, and we are now completely off gas—off the grid—with an induction hob. As many have said, it is not easy, and it can be costly up front. We have to recognise that we need a 10-year emergency insulation programme, with free upgrades for low-income households and those for whom such decarbonisation of heating is not a possibility, which is what the Liberal Democrats have called for. All new homes must be built to the future homes standard, as zero carbon-ready from day one. We need investment in heat pumps and alternatives, with full cost coverage for the most vulnerable, and investment in low-carbon, green and wild hydrogen to provide greater flexibility in the grid. Once again, I thank the hon. Member for Cannock Chase for bringing forward this debate.
This is also putting a significant cost on ordinary families. Let us look at gas boilers. I challenged the Minister on that during Energy questions last week, but the Energy Secretary and the ministerial team have refused to rule out new taxes, charges or levies on gas bills to fund lower levies on electricity bills, which means a net tax rise for the 80% of households that rely on gas. This was not even mentioned before the general election, although hon. Members will remember the promise to cut everyone’s energy bills by £300 by the end of this Parliament. Instead, energy bills have risen so far by an average of £111. While Labour sought to take the credit for the recent fall in wholesale gas prices, the policy costs for which they are responsible are rising.
Running down gas also denies how important it still is as a reliable source of power. Just this morning, a new National Gas report found an 18% increase in gas for power generation last year compared with the year before. At its peak, 65% of our power came from gas, with a half-hourly peak of 73%. This was caused partly by a major drop in wind power, which meant that we had to import more gas from countries as varied as the US, Norway, Qatar, Peru, Trinidad and other places. NESO might be planning another gas-free 30 minutes for the grid this summer, but the power of gas remains formidable and essential. People do not want to be forced to give up gas. Around 80% of the country relies on gas in some way or another. That is more than 20 million homes put at risk by any policy to force people off gas and on to less reliable and more expensive alternatives.
The Chancellor said during her statement on the spending review that
“energy security is national security.”—[Official Report, 11 June 2025; Vol. 768, c. 979.]
We agree with that, which is why the anti-gas stance of the Energy Secretary is baffling. We continue to rely on gas—in any given year, 40% of the energy used in the UK comes from it. It is a flexible and reliable source of power. It ensures that there is inertia in the grid, preventing blackouts of the kind that we recently saw in Spain and Portugal, where a lack of conventional power generation from sources such as gas contributed to mass power outages. New data centres are connecting to the gas grid to secure on-site power, instead of using wind or solar, and with good reason. But the Government want to reduce gas to below 5% of our electricity supply by 2030, and use it only as a back-up for unreliable renewables.
The Energy Secretary is being very ideological and basing decisions on dodgy claims about global fossil fuel markets. There is no single global gas market in the way that he has described on several occasions. Fossil fuel prices are higher in Europe than America, which is more dependent on fossil fuels than we are. The prices are higher here because of policy choices.
For example, blocking new oil and gas licences in the North sea only makes us more dependent on expensive, dirtier foreign imports, to the benefit of others. We are importing oil and gas from Norway from the very same seabed that we could exploit, while insisting that we are “too good” and “too green” to do that ourselves. British businesses and jobs could be benefiting from this industry, rather than being cut off. The policy does not even work on its own terms, because liquefied natural gas has four times the emissions of North sea oil and gas. As the hon. Member for Aberdeenshire North and Moray East mentioned, 120,000 jobs in the North sea are at risk. It does not make sense to shut down our own gas production when Norwegian oil and gas continues to be drilled from the North sea.
That is why I am glad that the Leader of the Opposition, my right hon. Friend the Member for North West Essex (Mrs Badenoch), announced that our party is committed to stopping the punishment of our domestic energy industry with damaging taxation. It is wrong for the energy profits levy to continue until 2030; we believe that it should be removed altogether, along with the ban on oil and gas exports. This change would actually increase revenue in the long run.
It is not just the North sea that we should worry about. Britain is the largest gas boiler manufacturer in Europe. Our gas grid is world-leading, but 130,000 gas engineers and 150,000 oil and gas sector jobs are now under threat. Deliberately winding down the gas industry is an extraordinary act of economic self-harm.
For all the Government’s talking down of fossil fuels, our gas grid is incredibly stable and resilient. The gas grid depends on over 30 large gas power stations, and the gas comes in through interconnectors, LNG imports, and from Norway and the North sea. Our gas grid is a vital connection point for the European gas supply, especially following the Ukraine invasion.
Major public investment has already gone into the gas grid to help modernise and reduce failures and leaks. This makes up 5,000 miles of steel pipes and more than 60 jet engines to move the gas around the country. Our gas grid can also play an important role in reducing carbon emissions through, for example, expanding the use of hydrogen. In contrast, the cost of decommissioning the gas grid has been estimated at between £46 billion and £70 billion.
The Government’s plans are causing major uncertainty for investors, businesses and workers when they should be standing squarely behind a critical industry that has an important role to play in our economic prosperity and energy security. Ministers are allowing policy to race ahead of the technology, threatening to destabilise the grid and our economy. It is clear that the gas grid has a crucial role to play in our energy mix if we are to protect families and businesses from rising costs. I do not doubt that the Minister will say that he agrees with that, but the test will be in action and policy, not words.
I am grateful for the opportunity to talk about the future of our gas network—a topic that has for too long been overlooked by, in all candour, successive Governments. That is partly because the gas network is incredibly efficient. It works quietly in the background of all of our lives in one way or another, so often we do not talk about it as much as we talk about the electricity system, but it is incredibly important. I agree with Members about the importance of us having a diverse and secure energy supply; the importance of a gas network is not just to gas itself, but to our electricity system, where it currently plays a critical role.
The transition that is already underway is unstoppable, but it is also incredibly important for the future of our country and it needs to involve every community, so I welcome and agree with the comments of my hon. Friend the Member for Hexham (Joe Morris) and others about the importance of all communities and households being part of it. There is huge potential in the transition to improve on where some of our communities are, so that they feel, as he rightly said, not on the edges of society but part of the innovation. We all have work to do on that, so his message is very keenly heard.
Let me discuss some of the context, and then come on to some specific points raised in the debate. This Government have set out to achieve a once-in-a-generation transition in our energy system to ensure that it is fundamentally fit for the future and resilient and tackles, as the hon. Member for South Cambridgeshire (Pippa Heylings) said, the energy trilemma before us: how we bring down bills, deliver on energy security and tackle the climate crisis.
Through the spending review, we will invest £13 billion into our warm homes plan over the next five years, helping to cut household bills by up to £600 through the installation of energy efficiency measures. We have secured development funding for the Acorn and Viking CCUS projects, which I will come back to later, supporting our clean power ambition and creating jobs and growth at the same time. By harnessing clean power from green sources in the UK, we also reduce our dependence on volatile fossil fuels. Geopolitical uncertainty in the world is never far away at the moment, which underlines how important it is that we move as quickly as possible towards that place.
As I have often said, our focus in our energy system is on the electricity system. This is perhaps understandable, given the scale of the transformation necessary there, but it is good to take time today to talk about the future of the gas network. To reiterate, the Government have the future of the gas network right at the heart of our thinking for the future of our energy system.
Gas has been part of this country’s energy story for centuries, from the use of town gas from the late 18th century to the discovery of natural gas in the North sea in the 1960s and the conversion programme. That was an extraordinary feat of transformation in households right across the country over the 1960s and 1970s, which I am far too young to remember. Some hon. Members will be old enough, but I am not naming any individuals.
Part of the solution is the warm homes plan, which is about transforming our homes by making them cleaner and cheaper to run. We are also helping to unlock the potential of electric vehicle infrastructure right across the country. New clean heating solutions mean that fewer homes will rely on gas boilers. Our transition presents an incredible opportunity to build on the skills of the existing gas workforce as we build what comes next. That will lead to thousands of new jobs and training opportunities across the country. As we decarbonise industry, we will also see a growing role for carbon capture and low-carbon gases such as hydrogen and biomethane, which will help ensure that we meet our objective of net zero, while still providing secure, reliable and affordable energy.
One of my hon. Friends asked about the green gas support scheme. I can confirm that it will close for new applications in 2028, but we are looking at the responses to a call for evidence on its future.
It is clear that the gas network will continue to play a critical role in meeting our energy needs out to 2050 and beyond. Even when we achieve our clean power mission, as we will, gas will play an important strategic back-up role, so it will still be important to maintain that system. The Government are clear that gas use will decline overall, and that how we use gas in our system will change. We therefore have to think critically about this nationally important asset. We must repurpose it and make sure that we do not take any options off the table. We will set out our views on the future of the gas system in much more detail very soon.
We have to acknowledge the challenges, as this will not be straightforward. Ensuring that we remain energy independent and that the gas network continues to operate as needed during the transition means that we will have to make some difficult choices, and maintaining investor confidence is absolutely key. We must maintain the current system and drive in the investment that we need for the future. We have been working with Ofgem on its RIIO-3 plans for the price control period from 2026 to 2031, to make sure that investment in industry is fair and affordable. We also recognise that, as the demand for gas declines due to homes and industry increasingly relying on electricity, there will need to be an orderly transition across our energy network. We will continue to work with Ofgem on that.
A number of contributions focused on what the future of the gas network will look like. Given the country’s huge technological expertise and investment, to have such a secure and reliable network, we need to think about how we protect it while considering the different demands that will be placed on it in future—we are looking at all possible options in this space. We are aware of the need for clarity on the future of the gas grid and how these repurposing options fit within that, and we will say more on that in due course.
I will turn to two specific things that have been mentioned today. First, the potential of hydrogen is clearly quite significant both for heating and industrial demand. We are doing a serious amount of work and taking further evidence on how we repurpose our gas networks to enable that. Several Members, including my friend, the hon. Member for Strangford (Jim Shannon)—he is ever present in this Chamber—spoke about working together across the UK on solutions. I will resist being drawn into constitutional arguments, although it is difficult to resist that temptation. The hon. Gentleman made an important point about working together on skills and jobs. Indeed, perfectly timed for his contribution, I am meeting Minister Archibald from the Northern Ireland Executive later today to talk about many of these issues and our co-operation with Northern Ireland.
On the question of blending, a mix of natural gas and hydrogen could be used in gas networks to decarbonise our gas use. The Government are actively looking at the question of blending and considering the appropriate decision points. My hon. Friend the Member for Peterborough (Andrew Pakes)—I think he said his constituency is the King’s Cross of the hydrogen world, which is an interesting analogy—asked about consultation on hydrogen blending. I can say that we will soon be publishing a consultation on transmission blending. On the core network, we agree that many benefits can be achieved from the hydrogen economy, but there are areas on which we require further evidence, as we really want to get this right. We are moving as quickly as possible, but we will need more evidence in some areas.
The Government want to provide strategic clarity on decarbonising home heating to best support our mission. To support that, we are assessing all the latest evidence, and we will consult later this year on the role of hydrogen in home heating. We also plan to bring forward a clear plan for industrial decarbonisation and a renewed industrial decarbonisation strategy, which will set out the strategic direction for our approach with industry.
The Government are enabling the development of the carbon capture, usage and storage sector to create jobs, reduce emissions and put the UK at the forefront of global CCUS. The Government are working on developing the strategic direction of CO2 transport networks. At the spending review, the Government announced that they will be providing development funding to advance the delivery of Viking and Acorn, with a final investment decision taken later in this Parliament.
I am grateful for the typically thoughtful contribution of the hon. Member for Aberdeenshire North and Moray East (Seamus Logan), who I have met a number of times, and we have had fruitful conversations. I was pleased to visit his constituency a few months ago, when I went to St Fergus, one of our most important gas terminals, and I welcome his comments on the Acorn project. We see it as a crucial project, and the funding we committed to it in the spending review will help drive it forward. It represents our commitment after years of dither and delay from the previous Government.
We think there is a role for biomethane in decarbonising all end users in the gas grid. It is already being used in the gas network, and we expect it to play a role in reaching our net zero target. It can be used flexibly, and that flexibility is valuable as it enables us to adapt to the hard-to-predict cost curves and deployment trajectories of existing technologies. Our biomass strategy sets out our ambition through to 2050.
With all repurposing and future use options, we need to determine the extent to which they are feasible, considering a range of factors. They must also be investable, to ensure that the gas industry can attract the necessary investment needed to build sustainable, viable networks. Crucial to that is that they have to provide value for money, providing affordable solutions for consumers who might use them.
To return to the point I started with, we need to be pragmatic on all this. Where repurposing is not viable, long-term consideration will be needed on whether we should decommission unused parts of the gas network and on the appropriate timeline for that. I want to be clear that none of this is straightforward. After successive Governments have not looked at this in the round, we are now grappling with how to deliver a future gas network that takes all the options into account and does not decommission things that we may wish we still had in the future.
There are lots of questions, and the Government do not have all the answers about the future, which is why the calls for evidence are so important. It is complex and challenging and, although we are not rushing, the Government cannot continue to ignore it. We are grappling with some of these big questions and will continue to work with industry and regulators on how best to meet the challenges.
The challenge before us is formidable but, like much of the energy transition we are embarking on, it is not insurmountable. As I frequently say, the point of being in government is to tackle the hard stuff. As with any issue that will outlive any Government, it is important to start the work now.
Our gas network will ensure that we can meet the transition challenges, providing us with the resilience and flexibility needed to deliver a fair, smooth and co-ordinated transition while protecting our energy security and independence in an affordable way. It can also be the foundation of new, innovative energy solutions to repurpose and adapt to future energy needs in a sustainable way.
Our plans announced in last week’s spending review set us on the right path, allowing us to build on those foundations. We need to harness the expertise and the passion within the gas industry, which I have had the huge privilege to learn from over the past 11 months in this job. We will combine that with the Government’s ability and determination to get this right as we broker a consensus on the way forward with a shared vision for the future of our incredibly important gas network.
As the Secretary of State set out at the International Energy Agency summit in London a few weeks ago, we will soon set out in much more detail our views on the future of the gas system. I look forward to continuing to work with the hon. Members present, not least because they have so many helpful suggestions about what the future will look like, and so much expertise to draw on.
Contrary to what the shadow Minister said, this is an area in which there is very little ideology. This is a practical problem that we have to solve as a country, so that the gas network is fit for the future, so that consumers benefit and so that we deliver on our energy security in the long term and have the opportunities for economic growth that the gas network can provide.
I thank my hon. Friend the Member for Cannock Chase again for securing the debate. I wish the rest of his birthday to be just as joyous as this debate, now that he has caught his breath. I thank all hon. Members for their contributions.