U.K.’s Climate Plan May Risk Heating-Cost Surge in Cold Snaps

The U.K. faces an additional burden in energy costs from plans to switch to electricity in home heating from natural gas, according to National Grid Plc.

The government, chasing a target to cut carbon emissions to 80 percent below 1990 levels by 2050, may push to heat almost all U.K. homes using electricity by that date, Marcus Stewart, future distribution networks manager at National Grid in Warwick, England, said in an e-mail yesterday. Currently, about 80 percent of the country’s homes are heated by gas.

“There needs to be a balance between electricity and gas to meet heat demand,” Stewart said. “Moving from one to the other is not economic, whereas a balanced approach can still hit the CO2 target.” Otherwise, the U.K. would need to invest in more stand-by power generation and transmission cables to support electricity-based heating, especially during cold snaps, he said.

The move, which is still under consideration, would require the U.K. to triple the capacity of its power grid, according to CNG Services Ltd., a consulting company. The strain on the electricity grid will probably increase as the nation raises power generation from wind farms that only generate in blustery conditions and so also require back up supplies.

Electricity can be less harmful to the climate than gas if sourced from generation such as nuclear or renewables. Burning gas produces about half the heat-trapping emissions as coal, while renewables and nuclear produce almost no CO2.

Heat Pumps

The U.K. government plans to publish its heat strategy this year, an official at the Department for Energy and Climate Change said today by telephone, declining to be identified citing government policy. Various methods, including electric heating and using biomethane in gas pipelines, will be included as means of cutting emissions, he said.

Heat pumps use electricity to transfer thermal energy from the ground, air or water to provide warmth. Such pumps are used in the Nordic region, where the cold climate boosts the incentive to spend on a system to keep energy consumption low, according to Tom Rowlands-Rees, an analyst at Bloomberg New Energy Finance in London.

“They are less efficient during cold snaps but they do still work and they do work well,” Rowlands-Rees said yesterday by telephone. “Throughout the year you’ll still have a more efficient heating system and it will save on heating costs.”

‘Spending Transfer Needed’

Air source heat pumps have a co-efficient of performance of above 2 at minus 7 degrees, he said, citing Worcester Bosch data from the Center of Alternative Technology. That means at those temperatures, they provide as much warmth per unit of energy as natural gas. “It’s only when that number drops below 2 that it becomes illogical,” Rowlands-Rees says.

Freezing conditions in the U.K. yesterday boosted natural gas demand to the highest it’s been in more than a year. Temperatures are forecast to drop to as low as minus 8 degrees Celsius (18 Fahrenheit) in London on Feb. 8, which is 10 degrees below the 30-year average, CustomWeather Inc. data on Bloomberg show.

“It’s madness to give up using the gas grid during the coldest weather because doing that would require a tripling of the electricity grid’s capacity,” John Baldwin, managing director of CNG Services Ltd. said in a telephone interview yesterday. “We can’t afford to throw 70 billion pounds ($111 billion) of investment in the gas grid and building heating equipment in the garbage skip.”

Home Insulation

The U.K. should transfer some of its planned spending that will subsidize new power generation to insulate houses, a much more cost effective way to meet carbon targets, said Baldwin, who formerly helped oversee development of the nation’s gas grid at Transco, which was purchased by National Grid in 2002.

Britain has pledged to boost investment in insulation and loft lagging via its so-called Green Deal and impose targets on utilities for energy efficiency measures through its Energy Company Obligation.

Often, freezing temperatures are accompanied by low levels of wind, Baldwin said. Yesterday at 4:30 p.m., wind was supplying about 642 megawatt hours of power to the U.K., 1.2 percent of generation, according to grid data on Bloomberg. On Jan. 20, it supplying at the rate of 3,092 megawatt hours, the highest last month, the data show.

The gas grid may be able to help meet heating demand on the coldest days cost efficiently, even in 2050, Baldwin said. CNG in Solihull, England, provides advisory services on natural gas and biomethane projects.

To contact the reporters on this story: Catherine Airlie in London at cairlie@bloomberg.net; Mathew Carr in London at m.carr@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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