Getting off Gas

The Government’s aim of greater UK energy security is incompatible with ongoing high gas demand, more so as North Sea gas production continues to decline. The only way to limit gas imports in the medium and long term is to reduce gas consumption, and yet effective policies are not currently being pursued.

Failure to accelerate deployment of renewables, heat pumps and insulation, and to achieve energy efficiency improvements across the economy, would leave UK gas demand stubbornly high, perhaps just 10% below current levels by 2035, and the UK more dependent on foreign gas imports.

With North Sea production forecast to decline by 55% by 2030, and 75% by 2035, in spite of plans to expand drilling, net imports would rise to meet demand, increasing to almost 60% above current levels by 2035 and worsening our trade deficit. By that stage, almost 85% of UK gas demand would be met by net imports, over five times that met by UK production, compared to an even split today.

Meeting existing targets for net zero technologies could reduce gas demand by 40% by 2035, which would help to limit the rise in net imports during the 2020s before they fell back to 5% below current levels by 2035. However, with North Sea production inevitably declining in the coming years, these net imports would equate to almost 80% of UK demand, four times the level met by UK production.

Accelerating the deployment of net zero technologies would see a sustained downward trend in UK gas demand, falling by almost 65% (two-thirds) by 2035. This would cut net gas imports year on year, taking them down by as much as 230TWh/yr by 2035, 55% below current levels.

And with North Sea production costs rising and the industry warning that output could fall even faster – by 80% by 2030 – the UK’s import dependency could be even higher, further emphasizing the urgency of cutting gas demand.

Effective policies to reduce net gas imports would include: ramping up insulation rates (which have fallen during the energy crisis) and boosting the heat pump rollout; providing a stable regime for renewables, including lifting the ban on onshore wind in England; and implementing policies to deliver the Government’s target of an overall 15% cut in energy demand by 2030.

Policies would also have to guard against the risk of gas demand potentially rising, for example by ensuring new homes aren’t connected to the gas grid. Furthermore, if the UK were to try to pursue hydrogen boilers for home heating at scale, the dependency on gas imports could rise significantly. Given that there is unlikely to be sufficient spare renewable electricity for generating green hydrogen in the medium term, we would have to use methods that involve natural gas, but with inefficiency penalties that would increase our gas consumption at the very time that it needs to fall.