The National Infrastructure Commission (NIC) has ruled out the use of hydrogen for heating in its second National Infrastructure Assessment.
The call forms part of the five yearly review – conducted by the NIC – which sets an agenda for action for UK infrastructure over the next 30 years.
Instead, in the assessment, the NIC urges the government to focus hydrogen use on power generation and industrial decarbonisation.
Commission chair Sir John Armitt called the report – published yesterday (18 October) – “probably the most comprehensive assessment yet of the infrastructure costs associated with supporting regional growth and reaching net zero.”
The assessment claimed that improved infrastructure to meet climate goals, as well as boost economic growth, is “both achievable and affordable if the right policy step are taken now.”
This requires a new approach, which the Commission split into three parts: policy stability; pro-investment regulation, which give clear indications of government priorities and implement business models to support emerging technologies; and accelerating the planning system for major projects, including energy transmission schemes and providing regular updates to National Policy Statements.
The NIC also called for bolstering to both public and private funding to upgrade the nation’s infrastructure. The Commission calculated that the government’s commitment to increase public sector investment in infrastructure to roughly £30 billion must be sustained to 2050.
Private sector investment must also see a sharp increase from roughly £30-40 billion – as it has been over the past decade – to between £40-50 billion from 2030 to the 2040s, the NIC added.
This investment, alongside the assessment’s other recommendations, will serve to benefit customers too, as the Commission calculates that the average household would save at last £1,000 a year by the mid-2030s compared to today. These savings are largely down to the transition to low carbon electricity.
Heat pumps and decarbonisation
The Commission cited heat pumps and heat networks as the favoured solution for switching building heating from gas to low carbon sources.
To meet the Sixth Carbon Budget, seven million buildings in England will need to transition to low carbon heating by 2035, the assessment noted. Achieving this will require a comprehensive and bold support programme, which the NIC outlined within the assessment.
The suggested programme includes the annual funding of:
- Roughly £1.3 billion to 2035 to cover the full cost of lower income households.
- Roughly £1.9 billion to 2035 providing an initial £7,000 upfront subsidy to households installing heat pumps or connecting to heat networks.
- Roughly £3.2 billion to 2035 to install heat pumps across the public sector estate and social housing and improve energy efficiency.
“We have been clear that a balanced approach needs to be taken to decarbonising heat and in addressing the decarbonisation of those businesses, and the jobs they provide, that are currently reliant on natural gas,” said Lawrence Slade, CEO of the ENA, in response to the publication of the assessment.
“Moving forward, the UK must continue working from the basis that no one solution is suitable for all circumstances. It’s clear network operators will need to employ multiple solutions to decarbonise heat, from electrification to hydrogen and other forms of heat provision, offer consumers real choice in how they heat their homes and ensure the UK can sustainably heat residences and run businesses over the coming years.”
Flexibility and storage
The Commission also proposed “significant” additional storage capacity and demand side response tools to improve the grid’s short term flexibility.
According to the assessment, this capacity will need to grow from 15GW, where it is today, to 60GW by 2035.
To provide stability during periods of lower renewable energy generation, such as at night or when the wind doesn’t blow, the NIC urged for the creation of businesses models which incentivise private investment in power plants powered by hydrogen or else gas with carbon capture and storage.
The assessment concludes that around 30TWh of long-term flexibility will need to be provided by these plants by 2035.
System infrastructure
The Commission highlighted that the majority of assets expected to be operational in 2055 have already been built and are awaiting connection.
To accelerate this process, the assessment calls on the government to create an outcome-based service standard for infrastructure.
So as to inform future regulatory and funding settlements, the NIC suggested that operators set out the costs of meeting such standards as well as adapting their network to climate and other risks.
“The NIC has rightly identified that our outdated and sluggish planning system is one of the key barriers to building the economy boosting, job creating infrastructure Britain desperately needs,” said Sam Richards, founder and campaign director for campaign group Britain Remade.
“As the report points out, the time it takes for Nationally Significant Infrastructure Projects to be approved is two-thirds slower than it was just a few years ago. This should be a wakeup call for everyone in government that wants to see growth delivered across the country.
“One of Britain Remade’s first recommendations to speed up the delivery of clean energy infrastructure, such as new onshore wind and utility scale solar farms, was the introduction of Clean Power Zones. These zones would be located in the areas where environmental concerns are lowest, new renewable projects would benefit from fast-track approvals and less red tape.
“With the Commission calling for better use of environmental data and a greater role for integrated spatial planning, I’m pleased the NIC has adopted this approach.”
Discussing the assessment during Energy UK’s annual conference yesterday, Nick Winsor, energy commissioner for the NIC said:
“The context of the second National Infrastructure Assessment, is achieving net zero as one of three strategic pillars, along with economic growth in all regions, climate resilience and environmental protection.
“Energy lies at the heart of decarbonising the economy and, by international standards, the UK has made very good progress, mainly by removing coal from power generation. That’s been very successful but as we all know there are still many complex challenges ahead.
“In its report, the Commission has discussed phasing out fossil fuels entirely in the generation of power to heat homes and power vehicles. It is essential that they’re phased out to meet our legal binding climate targets.
“There’s great news here as this shift will bring great economic benefits and greater resilience to any future oil and gas price shocks in terms of the impact on people’s cost of living. Furthermore, we believe that there is great opportunities for our businesses in the UK to become global leaders in the move to new low carbon technologies.”
The government is expected to formally respond to the assessment within 12 months.
