Context

British governments had accepted the need to reduce carbon emissions to address climate change since the late 1980s. When privatisation revealed that nuclear electricity was not actually “too cheap to meter” but rather too expensive to sell, global warming provided a useful pretext for subsidy. 

Calling the support scheme the Non-Fossil Fuel Obligation (NFFO) had the unintended effect of making it difficult to explain why nuclear was eligible but renewables were not. And so the first support scheme for renewables was introduced by accident with an exclusive focus on electricity technologies.

NFFO was replaced by the Renewables Obligation (RO) in 2001. The RO (and other government analysis of energy) retained the British government’s myopic focus on the 20% of our energy that we consume as electricity.[1] But the pressure mounted during the 2000s to do something about the other 80% (roughly 50:50 heat and transport).

The Royal Commission on Environmental Pollution’s 22^nd report (Energy – The Changing Climate), published in 2000, highlighted technologies such as renewable heat, which had so far been ignored by government policy.[2] The government accepted the report. No action was immediately forthcoming, but the need eventually to tackle the subject had been established.

An Early Day Motion (signed by 238 MPs including Boris Johnson) in November 2004 noted the lack of action and called for the Government “to extend the renewables obligation to support renewable heat”.[3]

By 2005, the introduction of some mechanism to encourage renewable heat seemed sufficiently certain that the debate on its structure was under way. The early frontrunner – an obligation mirroring the RO – was dismissed as “unworkable” by “Farmer” Ben Gill, the leader of the government’s Biomass Task Force.[4]

The UK’s Energy Review of 2006 was mirrored in the EU.[5] Both recognised the need to go beyond electricity. The European review led in 2007 to a proposal (enacted in 2009) to replace the 2001 Directive on Renewable Electricity with a broader Renewable Energy Directive (RED). The RED obliged countries to set out their intentions to encourage renewables in heat and transport as well as electricity.

Two decades after the UK recognised the need to reduce carbon emissions, some mechanism to encourage that in the heat sector was becoming imminent and inevitable by the late 2000s.[6] The consultation (published in June 2008) on a Renewable Energy Strategy included detailed consideration of the barriers to development of the market to date, and how they might be overcome, with a view to bringing forward concrete proposals.[7]

This was the environment into which National Grid launched its “Potential for Renewable Gas” paper.