Source · Select Committees · Public Accounts Committee
Recommendation 35
35
Rejected
DESNZ possesses limited understanding of future gas network decommissioning costs and feasibility.
Recommendation
Although DESNZ clarified that gas networks will be needed for some considerable time, it accepted that it needed to increase its work to look at future decommissioning. The NAO found that DESNZ’s work on the costs and feasibility of gas network decommissioning was in the initial stages, and its understanding was therefore limited. DESNZ indicated that it had a consultation underway with Ofgem to identify the early issues around decommissioning the gas network.71 Our previous reports have demonstrated that a limited upfront understanding of the costs of decommissioning in other sectors such 63 DHH0050 64 DHH0053 65 DHH0003 66 Q 94; C&AG’s Report, para 2.10 67 Qq 94, 98 68 DHH0036, DHH0046, DHH0050; C&AG’s Report, para 24c 69 DHH0036; C&AG’s Report, paras 12, 2.20 70 Qq 104–105; National Infrastructure Commission, Arup - Future of Great Britain’s gas network, October 2023, p.11 71 Qq 103–103; C&AG’s Report, para 2.20 20 Decarbonising home heating as nuclear and oil and gas have required more taxpayers’ money to meet significant additional costs. In the nuclear sector, for example, taxpayers had to top up the cost of decommissioning seven nuclear stations with £10.7 billion, as existing funds did not keep up with the increased costs.72 Decarbonising power generation
Government Response Summary
The government explicitly rejects the recommendation for a full assessment of gas network decommissioning costs and feasibility, stating it would require more time. However, it acknowledges the importance and describes ongoing work with regulators and industry to understand decommissioning needs in different scenarios.
Government Response
Rejected
HM Government
Rejected
6.3 The government disagrees with the Committee’s recommendation. 6.4 The department disagrees with the recommendation as a full assessment will require more time than proposed by the former Committee. However, the department acknowledges that there are a range of scenarios which achieve net zero by 2050 with differing implications for the gas system and are currently exploring ways to facilitate the transition to a secure, affordable, low-carbon gas system in these scenarios. 6.5 This work involves understanding the likely supply and demand needs of natural gas in the future and identifying what this means for the gas system and infrastructure, including the extent to which decommissioning is required for parts of the gas network that cannot be used or repurposed. 6.6 This work will also consider how to lead the system through the decommissioning process, the technical aspects required to deliver decommissioning, and how to pay for it. 6.7 Modelling and understanding these different scenarios is complex given the number of variables at play (for example, uncertainty regarding the supply and demand for hydrogen, carbon capture, usage and storage (CCUS) and biomethane), and will depend in part on policy decisions yet to be made. For example, on the use of hydrogen for heat. 6.8 The department will continue to work with regulators and industry to understand what decommissioning will be needed in different scenarios, and how best to deliver it.