Future of the Gas Grid

Deirdre Costigan Excerpts

Wednesday 18th June 2025 Westminster Hall

[Josh Newbury]

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.

[Deirdre Costigan (Ealing Southall) (Lab)]

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?

[Josh Newbury]

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.

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.