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.
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.
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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.
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.
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.
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.