Future of the Gas Grid

Andrew Pakes Excerpts

Wednesday 18th June 2025 Westminster Hall

[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.

--- Later in debate ---

[Andrew Pakes (Peterborough) (Lab)]

It is a pleasure to serve under your chairship, Dame Siobhain. I think this is my second Westminster Hall debate, so I am still learning the ropes. Let me put on the record my GMB membership and the support that it has given me; and my previous role, before the election, as deputy general secretary of the Prospect trade union, covering workers in the gas and energy sector.

I thank my hon. Friend the Member for Cannock Chase (Josh Newbury) for securing this debate. I have learned this morning that he shares his birthday with the legend who is Derrick Stone, who also happens to be my dad and who is celebrating his 87th birthday today.

Debates about the nation’s energy security are always of the highest importance, but given the ongoing events in the middle east and uncertainty around the world—as my hon. Friend the Member for Worcester (Tom Collins) said—debating the future and resilience of our energy system has become all the more necessary. The UK runs on gas; 40% of our energy comes from gas. Today every part of our country and economy still depends on it. Our national gas network collectively connects more than 30 large gas power stations, 24 million homes and half a million businesses. That includes several critical heavy industries—to name just a few, glass, chemicals, heavy machinery production, and sugar production and British Sugar around my constituency, in the east of England. They all need gas to produce their products for the British people and for us to sell to the world. We need those industries—and the 1 million jobs that depend on them—not only to stay in the UK, but to grow and thrive here and create more prosperity during the transition.

Our gas grid, with our world-leading national transmission system as the backbone, will play a leading role in the transformation of our energy network. As the Climate Change Committee recently said, many industries—such as those that I have just named—simply cannot fully electrify; they will always need a form of gas to keep their operations running. The discussion on the future of the gas grid is not about whether it will continue to exist, but about what will flow through it—natural gas, as we see today, or clean, home-grown forms of gas, such as hydrogen, in the future.

I am a passionate advocate for clean power and supporter of this Government’s green ambition. It will usher in industrial renewal and breathe new life into neglected towns and cities such as mine—Peterborough. It has the potential to create jobs, bring in new investment and deliver the long-term energy security that our country needs.

This is not just wishful thinking or some hypothecated plan for 10 or 20 years’ time. It is happening right now in places such as my constituency. Peterborough is fast becoming the King’s Cross of hydrogen—a hub where innovation, infrastructure and ambition meet. At the Peterborough gas compressor station, the crossroads of our national transmission system, National Gas, as my hon. Friend the Member for Cannock Chase said, has already announced £350 million to install new, state-of-the-art hydrogen-blend-ready turbines—an investment that initially will create 100 jobs and apprentices in Peterborough, with the potential to grow more across the UK. That investment not only will help locally to create jobs, boost the economy and grow our skillset, but will be vital in delivering the Government’s green growth mission nationally. Today that compressor station moves natural gas across the country to fuel heavy industry and power stations, but it is now able to move hydrogen instead, starting with a blend, and eventually moving to 100% hydrogen if we get there and decarbonising the country while protecting jobs in industry in all parts of the United Kingdom. That is the role Peterborough is playing in the green transition, and it is the future of the gas grid. Such projects show that hydrogen has a critical role to play in the future of British energy. I am proud that my constituency is playing a key role in supporting this Government’s ambitions and that transition.

However, to really kick-start that revolution there are some quick, easy actions that the Government can take. I have a few questions, which I hope the Minister will be able to expand upon in his remarks. Can the Minister confirm when we might see the release of the consultation on hydrogen blending into the gas transmission system, which was promised by the last Government and, we are told, may be coming shortly? That would help kick-start the hydrogen economy and unleash a wave of investment in Britain. What are the next steps in the Government’s plans for a core hydrogen network, as recommended by the Climate Change Committee and others, and how will that build on the exciting and excellent steps we have seen in recent days with Cadent and others through the Government’s announcements around hydrogen? Finally, what assessment can the Minister give us of the skills need and skill potential in communities such as mine that are crying out for good, decent, unionised opportunities that the gas transition could provide, not just in Peterborough but throughout the UK?

It has been a pleasure to speak with passion about my constituency again this morning, and also with passion about this Government’s drive to deliver us the green transition. Gas networks have helped build our industrial past and our current prosperity. Our gas networks of the future have the ability to power our transition and movement to net zero, while bringing communities with us.