Contribution of encouraging the future use of biomethane to resolving sustainability and energy security challenges: The case of the UK

Abstract

The focus of this research is the potential of biomethane in Britain's gas grid. It examines its relative ability to address Britain's sustainability and energy security challenges from an economic perspective. Such research is important because UK is wedded to gas for heat production and power generation and is increasingly dependent on imported gas, in line with shrinking domestic production, and uncertain future trading relationships. Also, dependency on natural gas, threatens Britain achieving its legally-binding carbon budgets. The study included a thorough literature review, primary research to finally uncover the views of key UK market participants plus analytical modelling. The findings reveal that the market is cautiously optimistic, despite reservations regarding feedstock availability and the impending cessation of subsidy approvals. Investors are in greater need of long-term certainty, however, and the challenge of decarbonising heat and heavy-duty transport warrants this. Retail price premiums are polarised but, in line with wholesale costs, relatively high compared to electricity. The key recommendation is for the policymakers to follow precedents in renewable electricity and liquid biofuels, by mandating that energy suppliers, owners of heavy-duty road fleets and occupiers of new buildings purchase biomethane. In tandem, feedstock and grid-entry restrictions must be tackled creatively.