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Future Regulation of the Gas Grid

Abstract

The CCC has established a variety of viable scenarios in which UK decarbonisation targets can be met. Each has consequences for the way in which the UK’s gas network infrastructure is utilised. This report considers the implications of decarbonisation for the future regulation of the gas grid.

The CCC’s 5th Carbon Budget envisaged different scenarios that would enable the UK to meet its emissions targets for 2050. These scenarios represent holistic analyses, based on internally consistent combinations of different technologies, which could deliver carbon reductions across different sectors of the economy.

The CCC’s scenarios incorporate projections of the demand for natural gas to 2050. The scenarios imply that the volume of throughput on the gas networks1, and the nature and location of network usage, is likely to change significantly to meet emissions targets. They are also characterised by significant uncertainty.

Under some decarbonisation scenarios, gas networks could be re-purposed to supply hydrogen instead of natural gas, meaning there would be ongoing need for network infrastructure.

In other scenarios, gas demand in buildings is largely replaced by electric alternatives, meaning portions of the low pressure gas distribution networks could be decommissioned.

Patchwork scenarios are also possible, in which there is a mixture of these outcomes across the country.

In this project, the CCC wished to assess the potential implications for gas networks under these different demand scenarios; and evaluate the associated challenges for Government and regulatory policy. The challenge for BEIS and Ofgem is how to regulate in a way that keeps options open while uncertainty persists about the best solution for the UK; and at the same time how best to make policy and regulatory decisions which would serve to reduce this uncertainty. Both Government and Ofgem have policy and regulatory levers that they can use – and we identify and evaluate such levers in this report.

Related subjects: Policy & Socio-Economics
Countries: United Kingdom
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2016-06-01
2021-06-21
http://instance.metastore.ingenta.com/content/government119
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Supplements

Annex 1: Current Stakeholder Landscape

Annex 2: Review of Current Regulatory Framework

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