Technologies for meeting Clean Growth emissions reduction targets

Just as timely Government decisions in the 1970s promoted highly effective oil and gas production in the North Sea, there is immediate opportunity for Government to achieve significant emissions reductions across the economy by promoting and supporting the proven technology of carbon capture and storage (CCS)

REQUESTED EVIDENCE TO BUSINESS, ENERGY AND INDUSTRIAL STRATEGY COMMITTEE INQUIRY: CARBON CAPTURE, USAGE AND STORAGE – GAS STANDARDS, HYDROGEN AND GSMR

Gas networks carry the majority of the UK’s energy supply. These can be readily converted from methane to hydrogen. In fact, pilot projects and other works are under way with safety as the primary criterion. However, a regulatory blockage is that the Gas Safety (Management) Regulations (GSMR) set in 1996 are extremely restrictive on the variation of UK gas supply. Less than 0.1% hydrogen can be incorporated into UK gas supply so that existing pilot tests can only be undertaken on limited, isolated networks. Coupled with this, customers are currently charged by calorific value of a gas based on a flow weighted average in a very small number of billing zones within the UK (specified within the Gas (Calculation of Thermal Energy) Regulations (CoTER)). There are only 13 zones and Scotland, for example, is just one zone, which requires all gas sources into that network to be enriched or deriched to the prevailing gas quality for the entire zone. This methodology has to change to allow blending of hydrogen into the network. Both these key pieces of outdated legislation will block demonstrations and roll-out of hydrogen blending or conversion. And this will block the UK’s decarbonisation progress. Funds for hydrogen blending and conversion should be included in the control period bids by gas networks, which will become settled in late 2019, for 2021-26 spending. GSMR and CoTER regulations can only be altered by Government, the Health and Safety Executive and Ofgem, respectively. That needs Government action. Guarantee of GSMR and CoTER changes will enable investment to be agreed by the boards of gas networks. Both GSMR and CoTER are on the decarbonisation critical path to adoption of hydrogen as an energy carrier through the existing gas infrastructure, be it through blending or full conversion

Evidence to UK Business, Energy and Industrial Strategy Committee Inquiry: Carbon Capture, Usage and Storage

Key points: RAB business models, market creation, gas networks, transport pipe re-use and decommissioning 1. Creating clusters of carbon dioxide (CO2) transport to storage was recommended by the UK’s CCUS Task Force. 2. Transport of CO2 through pipe infrastructure is recommended to be operated by regulated asset base (RAB) methods. 3. It is unclear to existing gas network operators that they have the remit to invest in such RAB. 4. It is unclear to hydrocarbon companies that they wish to enter into a RAB. 5. Is the UK Government able to clarify who has the legitimacy and authority to create a new CCS RAB, describe how this will be achieved and take steps to enable the process? 6. One potentially very large area of demand for CO2 storage services is the production of hydrogen from methane. This will depend on the ability to sell hydrogen into the UK gas distribution network. However, for any hydrogen to be placed in the distribution network, it is necessary for gas content to be altered. These are the Gas Safety Management Regulations (GSMR) Schedule 3 (1996). This change is considered by many to need Parliamentary time, rather than being in the control of Ofgem. What action is Government taking to enable this before gas networks decide in 2019 on investment plans for their next five-year budget period? A delay will prevent gas networks from being hydrogen customers, and will block a potential market for CCS. 7. The cost of developing CO2 transport can be reduced by re-using existing pipe infrastructure. 8. A decommissioning process operates offshore to remove unwanted pipes. 9. It is apparent that the novel re-use of pipes, re-purposed from oil and gas transport to carry CO2, or used as hydrogen stores, has not been adequately considered in decommissioning. 10. Government needs to urgently create a method by which oil company (or onshore) pipe owners can transfer ownership of selected identified pipes to a holding organisation, which can preserve pipework for five to 15 years until CCS developments emerge. 11. The benefit of pipeline re-use rather than decommissioning for the Acorn CCS project is a cost saving of £150 million, reducing the price of a £450m CCS project to a £300m project. 12. Similar benefits are likely to occur with additional offshore pipes in Scotland, east England, and north-west England. The Oil and Gas Authority (OGA) appears to give re-use an extremely low priority, meaning that public finances will bear extra charges. 13. The CCUS Task Force recommended clusters as a geographic approach to CCS, with a business disconnect between capture operators and transport and storage operators. Cluster criteria were suggested in the Task Force’s report, but BEIS have not yet confirmed whether these will inform their choice of the regional clusters to undertake further design and costing, leading to development. An answer to this question will enable CCUS developers to undertake speculative work assessing a region to be suitable for CCS development. Can BEIS confirm that the cluster criteria identified in the Task Force report are valid and will form the basis of regions being able to progress CCS simply by ensuring that they meet the identified criteria

Living in the Present, Making the Future: UK Scenarios for the Phase-out of Oil and Gas

The Oil and Gas Transitions (OGT) is an evidence-based programme which aims accelerate just transitions from oil and gas in Denmark, Norway and the UK. Our Approach: • Evidence-driven, with leading researchers providing credible, academically verified recommendations on scenarios for oil and gas just transitions. • A trusted neutral convener, able to effectively bring pluralistic positions to the table for effective exchange. • We catalyse action by empowering key players in the oil and gas ecosystem with the evidence they need to develop their own visions, priorities, and interventions (e.g., campaigning, advocacy, institutional planning, policy design). This report presents findings from research undertaken by the University of Edinburgh to gather evidence on the state of the oil and gas just transition in the UK, and to co-create transition scenarios alongside diverse stakeholders from academia, industry, civil society, the financial sector, government, and community-led organisations. The authors strove to engage a representative cross section of relevant stakeholders in the co-creation process. The conclusions herein are the result of the first stage of such process. Further ongoing and iterative engagement, particularly with groups that may have been underrepresented in the first stages of the co-creation process, is intended to continue developing and building upon the research findings presented in this report. OGT is co-led by Climate Strategies and the SEI, and made possible by the support from KR Foundation and Laudes Foundation. The statements herein do not represent the views of Climate Strategies, SEI, KR Foundation and Laudes Foundations or other members of the OGT consortium