Written evidence submitted by the Independent Networks Association (DHH0026)
About the INA
The Independent Networks Association (INA) was formed at the start of 2020 through the merger of the Association of Independent Gas Transporters (AIGT) and the Competitive Networks Association (CNA), which represented Independent Gas Transporters (IGTs) and Independent Distribution Network Operators (IDNOs) respectively. INA member companies are licensed by Ofgem to operate networks supplying energy to around three million homes. Members compete to provide the majority of the UK’s new connections and are therefore an essential support for the new build housing market.
The INA’s role in connecting comes to the energy system
INA members believe our work will be of significant benefit to the low carbon transition. Of the 207,400 new dwellings that were completed in 2019 independent networks connected 166,458 (80 per cent) to gas and 146,512 (71 per cent) to electricity. Some INA members also provide fibre to the home, water, wastewater and district energy connections as a convenient ‘one stop shop’ for developers. Given the central role we play in new developments, we believe we have important insights to contribute into how the low carbon transition will be delivered in decarbonising homes.
The role of low carbon gas in decarbonising domestic heating
The INA believes there is a possibility that the Government may unintentionally reduce the role low carbon gas can play in decarbonising domestic heating. The Government’s Future Homes Standard will ban gas connections in new homes from 2025, which may preclude those properties from benefitting from low carbon heating solutions in future.
As a technology agnostic organisation, with members who have interests in both gas and electricity, the INA does not have a preference about the UK’s path to decarbonisation. However, our understanding is that the Government wishes to keep all routes to decarbonising open for as long as possible. We therefore wish to highlight this issue, to seek clarity for ourselves and the developers who contract us to connect the new homes they build.
Should the Government go ahead with the prohibition of new gas connections from 2025, it will mean that even if ultimately the UK makes a success of widespread Hydrogen deployment, Biogas or Carbon Capture Usage and Storage this will be inaccessible as a heat source for houses being built today. Developers will not fit gas pipes to new homes, so it will be impossible to get gas from those sources into homes to heat them. There will be other technologies open to people who live in these dwellings, however, the choice of low carbon gas will not be available to them. This may be something you wish to consider as part of your inquiry, particularly since there has been discussion about the role hydrogen ready boilers could play in the energy transition. The INA supports the deployment of hydrogen-ready boilers but would note that, if gas connections are banned on the large number of new dwellings we connect, this option will not be available to the householders who move into them.
The INA is very supportive of the Government’s target to build 300,000 new homes; without new gas connections there will be practical constraints about the low carbon heating options available to the heat these properties in the near term. For example, the supply chain for air source heat pumps and the availability of qualified installers will take time to develop which makes it particularly challenging to rely on that technology to meet the anticipated demand. This is an important consideration for INA members because developers, knowing that the 2025 date is coming, are already making decisions to pre-empt a cliff edge cut off for gas connections in 2025. INA members will connect whatever heating systems are needed to fulfil our customers’ orders. However, the BEIS Select Committee may wish to consider what cost implications this has for consumers, what steps would be necessary to support and strengthen the supply chain to cope with the demand from new build housing for alternatives to gas, and whether or not decisions being taken today are already closing off avenues for alternative low carbon heating sources. By default, the houses of tomorrow are being driven towards full electrification. This may be the right thing to do, but it is happening despite the desire of both the Government and the BEIS Select Committee wishing to consider the options, and approach the decarbonisation of domestic heating strategically. We believe these are questions that relate to the inquiry’s terms of reference.
Regulatory barriers
District Heating systems could also play a part in the low carbon solution for heating homes, as could local network Electricity generation. However, INA members’ electricity licence conditions currently prohibits ownership of the generation plant required for either of these options. Amendments to these restrictions may be an area which the Committee wishes to consider.
At the local network level we are proposing the generation outputs would not be large enough to affect the power market in any significant way. However, it could make a significant impact on the carbon footprint of heating. By looking more favourably at derogations from our licence conditions, to allow INA members to operate small scale generation and storage for the purpose of providing heat and supporting out networks, this could help provide another option for decarbonising domestic heating.