Future of the Gas Grid

Josh Newbury Excerpts

Wednesday 18th June 2025 Westminster Hall

[Josh Newbury (Cannock Chase) (Lab)]

I beg to move,

That this House has considered the future of the gas grid.

It is a pleasure to lead a Westminster Hall debate for the first time with you in the Chair, Dame Siobhain, in particular given that it is my birthday today. [Hon. Members: “Hear, hear!”] Thank you, everyone.

I thank colleagues from across the House for joining me in this important discussion about the future of Britain’s gas grid. First, I pay tribute to the men and women who work in our gas industry, from extraction and refining through to transmission and product engineers. They literally keep the lights on and our houses warm—not that we need a lot of assistance with heating in the month of June, but of course we rely on gas heating for much of the year.

[Tom Collins (Worcester) (Lab)]

I take this opportunity to wish my hon. Friend and office mate a very happy birthday. This is a very important debate, and I am grateful to him for securing it. I am looking forward to the discussion and I have much to share later, but for now I emphasise how timely the debate is as we face uncertainty in national security and a huge energy transition that will create opportunities as well as challenges.

[Josh Newbury]

I thank my hon. Friend for his intervention and I pay tribute to him for all his years of work in the gas industry and for the knowledge that he brings to the House and indeed to this debate. I look forward to hearing from him later.

Previously, I worked for the Energy and Utilities Alliance, which is a trade association primarily representing companies in the gas heating industry. Recently, however, I had a heat pump installed at home, so I will not be using gas at all in future. I am certainly not a believer in silver bullets or dominant solutions. That heat pump cost £15,000, though, and the installation was fraught with complications, so it is fair to say that I have mixed views in this space.

Gas is an essential part of our energy system, accounting for 40% of the UK’s total energy consumption and about a third of total electricity generation. Crucially, it provides vital flexibility to make up for peaks and troughs in generation from renewables, which should of course be our focus—but they cannot be the whole solution for the foreseeable future. Indeed, the Government’s clean power by 2030 mission foresees a role for gas power stations as flexible generation for up to 5% of demand, but it will take a huge amount of energy storage to enable us to reduce our gas usage for power generation even to that level.

Looking ahead, the National Infrastructure Commission and the Climate Change Committee have recognised that gas, in one form or another, will continue to play a vital role in the energy system for decades to come, as a crucial component of a diverse and secure energy supply. All realistic projections for the UK’s energy transition envisage a continued role for gas, alongside carbon capture and storage and hydrogen, which I will come on to.

A key area of interest to me—and, I am sure, to every Member wishing to contribute to this debate—is the role of gas in domestic heating. Nationally, the gas grid serves more than 24 million homes and half a million businesses. It carries three times more energy than the electricity grid does annually and, on peak winter days, that figure rises to five times as much. Eighty-three per cent of homes rely on mains gas, and in my Cannock Chase constituency 95% of households are on the gas grid. Meanwhile, 6,460 households in my towns and villages live in fuel poverty.

Given that gas heating is clearly the cheapest form of domestic heating we have today, the future of the gas grid is not just a technical issue, but a cost of living issue. Heat pumps are a potential solution for many homes, in particular those off the gas grid, but we have to be honest about the persistent cost barriers. With the average heat pump installation coming in at about £13,000 and only just over half of that paid for by the £7,500 boiler upgrade scheme, heat pumps are clearly still the preserve of able-to-pay households and niche house builders.

[Andrew Pakes (Peterborough) (Lab)]

The Government are doing really important work on social justice and the environment, but my constituency is similar to my hon. Friend’s in terms of fuel poverty. Is he aware that, of the £300 million spent on the boiler upgrade scheme over the past few years, only 3% of grants in Cambridgeshire went to Peterborough, the poorest constituency? As we advance and develop these schemes, we need to root social justice alongside carbon reduction.

[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.

--- Later in debate ---

[Josh Newbury]

It is genuinely a pleasure to lead this debate on my birthday. Some people might sooner spend their birthday at Alton Towers or on the sofa, but an energy wonk like me would rather be here, among such knowledgeable and passionate Members, to discuss an issue of such significance to our nation’s future.

I thank hon. Members for their thoughtful and well-informed contributions. I am pleased to see the amount of consensus, which is a rare thing or even a dirty word in the current political climate. Many of our constituents believe we spend our weeks shouting at each other, but this debate has been a prime example of the reasoned and respectful engagement that I think defines Parliament.

We have heard from three of our four nations and covered a huge range of angles, from affordability, jobs and industry through to resilience, flexibility and, most importantly, communities and people. I welcome the Minister’s statement of confidence in the gas grid of today and tomorrow. He is right to say that we need to be pragmatic, and I welcome the clarity he has given us today. I worked in the industry for many years, so I know that is something we have not always had from previous Energy Ministers.

I look forward to continuing this debate in the months and years to come. As the Minister said, tackling the hard stuff is what we do in this place. I look forward to a bright future for our gas grid and, therefore, our whole unique energy system. Once again, I thank you, Dame Siobhain, for ably chairing the debate and hon. Members for making it such a rich discussion.

Question put and agreed to.

Resolved,

That this House has considered the future of the gas grid.