The evolution of ideas on decarbonising heat

The earliest British thoughts on renewable heat focused on biomass.[1] The PIU’s 2002 Energy Review, in broadly dismissing heat decarbonisation, suggested that “the main possibilities seem to be some limited use of biomass, and in the much longer term, the possible use of hydrogen”. They also considered that “if low carbon electricity were cheap enough, it could be attractive to switch to electricity from direct sources of heat, but this is at present a distant and uncertain prospect.” Other than waste heat (e.g. CHP and EfW), no other technologies were considered.[2]

This dismissive attitude contradicted European experience, where renewable heat was already a substantial contributor, dominated by biomass. The government came under pressure to reconsider its assessment. 

To this end, reflecting the assumption that biomass was the key technology, it formed a Biomass Task Force in 2004, chaired by former NFU President Sir Ben Gill. With good agricultural forthrightness, the Task Force’s 2005 report was robustly critical of the assumptions about and dismissal of renewable heat in energy policy to date.[3]

It estimated the potential of biomass heat (and/or CHP) as 44-51 TWh of “dry” material (i.e. favouring thermal technologies) and 4-5 TWh of “wet” material (i.e. favouring biological technologies). On grounds of efficiency and availability, it argued that conventional biomass-heat combustion technologies were much the largest opportunity,[4]but also advised that the limited potential of anaerobic digestion of “wet” material could be improved by a focus on / incentivisation of greater efficiency. It assumed that the gas would be used to generate electricity, with heat recovery where possible, or a possible alternative use as a vehicle fuel. Injection into the gas grid was not considered, unsurprisingly as (a) the potential was considered insignificant relative to the national demand for gas, and (b) to achieve even that limited amount it was assumed a substantial proportion of the market would be small, on-farm units (i.e. likely off-grid).

Around the time of the Task Force’s report, the government was reconsidering its attitude to another set of energy (including heat) technologies encompassed by its Microgeneration Strategy.[5] A supporting report by Element Energy for the Energy Saving Trust judged that renewable heating (by which it meant biomass heat and ground-source heat pumps) “has significant potential for CO₂ reduction”.[6]

Driven by the government’s objective to decarbonise more than could be achieved through electricity alone, the hitherto-ignored potential of a suite of renewable-heat technologies was being recognised. All of the technologies under consideration were alternative rather than complementary to the dominant heating technology: natural gas. Deep decarbonisation required more than the 20% of heat that was off the gas grid to be decarbonised. 

Gas heating had many benefits, such as cost, air quality, customer satisfaction and supplier convenience. Many groups foresaw considerable pain switching users from gas to other heat sources. Customers would not like giving up the convenience. The government were not keen on the political impacts of imposing something unpopular, nor the cost to the economy and/or the Exchequer of driving people away from the cheapest solution (ignoring social costs of carbon) to more expensive and difficult options. 

But even more directly concerned were the companies whose income was dependent on the gas market – gas suppliers and gas network operators. The suppliers at least had limited fixed costs and could relatively-easily scale back their gas-supply activities and branch out into other heat sources if the market (steered by government interventions) dictated. But the network operators faced high fixed costs to set against dwindling revenue if gas heating were displaced by renewable heat. For them, it was an existential matter to persuade the government to follow an alternative path that delivered decarbonisation through their network. 

It was less important for that path to be realistic. It would solve their problem simply by diverting government support from the technologies that would eat their market, whatever the split between green gas and fossil gas ended up being transported in their network. To serve its purpose, it simply had to make the potential sound large and painless enough that the plans for alternative (more politically painful) technologies were scaled back.

The supporting studies for the 2008 consultation on a Renewable Energy Strategy looked in more detail at the potential for biogas for the first time. They found that the potential was greater than previously thought in the most optimistic scenario: around 24 TWh in 2020.[7]

Image

However, the aggressive assumptions required to achieve this figure caused enough discomfort that Enviros sounded a note of caution:

Despite these aggressive assumptions, the best that was hoped for biogas was around 25% of renewable heat in 2020. Total renewable heat in 2020 was expected to contribute at most around 15% (90 TWh) of total heat demand, putting biogas’s greatest conceivable contribution to the total at under 4%.

The potential was expressed as 24 TWh rather than 2.4 billion m³ of gas (the rough equivalent) because the analysis indicated that “Biogas upgrade to bio-methane does not appear commercially competitive due to the costs of upgrading and distribution.”[8] The gas was expected to be used on-site to generate heat and/or power where feasible, but as those opportunities were thought to be “niche”, the main use would be CHP feeding district heating.

Biogas was now on the radar for support as a heat fuel, but this was no consolation to the gas network operator, as it had simply been added to the list of technologies that would compete with the gas supplied over their network. Even if they argued successfully that the economic assessment of grid injection was unduly pessimistic, the resource assessment was unhelpful, because <4% (at best) of the UK’s heat would not be enough to avoid the need to encourage other technologies that would eat their market, and they could not claim that their network could be decarbonised to any significant extent. 

They needed a report that claimed that a large enough proportion of the UK’s heat could be decarbonised by injecting biomethane into their grid that the government’s appetite for encouraging alternatives was significantly reduced. Ernst & Young agreed to supply it.