New green bond to help prepare for hydrogen heating

Image by ri from Pixabay

Abundance Investment Ltd, an ethical investment crowdfunding platform, has launched an offer to fund Northern Gas Networks’ (NGN) programme to upgrade its pipelines to help bring hydrogen directly into homes while reducing carbon emissions.

As part of NGN’s plans to transition its network to net zero, three quarters of its pipework has already been upgraded from metallic mains to polyethylene and the investment will help replace a further 2,900 km by 2026.

This is set to bring two major carbon cutting benefits: creating a hydrogen-ready gas network in the North and reducing emissions from the day-to-day operation of the network.

Mark Horsley, CEO, Northern Gas Networks, commented: “The UK energy sector is facing an exciting transition.

“Whilst focus is often placed on how energy production must change, the networks that distribute our energy must change too.

“At NGN, we’re delivering on a clear plan for a Net Zero carbon network by 2050.

“Working in collaboration with our regulator, Ofgem, central government and the energy industry across the UK, our research is proving that hydrogen offers a safe, affordable and deliverable Net Zero solution, and with this investment we want our customers to be involved in this important transition.

“Repurposing the gas network to transport hydrogen is likely to be the least disruptive and most cost-effective solution to zero carbon home heating for the vast majority of the UK homes.”

NGN currently delivers gas to 2.7 million homes and businesses in the North East, Northern Cumbria and much of Yorkshire and Humber.

The company is already demonstrating a blend of hydrogen and natural gas – they will be supplying 670 homes in this way for 10 months from late spring 2021, subject to approval from the Health and Safety Executive.

Later in the year, they are planning their first live trials of 100% hydrogen in an unoccupied section of their network.

Since 2013, NGN has reduced the volume of gas lost from day-to-day operation of the network by over 25 per cent.

Over the next five years, it aims to reduce total emissions by another 24 per cent, saving over 900,000 tonnes of CO2 in total.

NGN therefore wants to open up this investment in its Net Zero vision to the public.

Reported to be the first regulated energy distribution company to launch a green bond exclusively for retail investors, the company wants to let everyone participate in the green transition.

Bruce Davis, co-founder and Managing Director, Abundance, commented on the announcement: “Abundance’s customers want to back a range of solutions to deliver a Net Zero future, and this is the first time we’ve been able to offer them something that directly tackles heating in the home.

“It’s also the first time we’ve worked with a major utility which has chosen crowdfunding to enable their customers to participate directly in the Net Zero transition.

“The development of hydrogen, alongside other technologies like heat pumps, offers a practical solution that will make a real difference to cutting emissions.

“The UK needs urgent investment in the infrastructure that can deliver this if we are going to meet our targets to decarbonise how we heat our homes.”

The investment, in Northern Gas Networks’ Finance Plc, seeks to raise £1 million through a lower-risk, long term investment with returns of 1.6% per annum over a 10-year term, with the minimum investment £5.

Gareth Mills, NGN’s Director of Regulation and Strategic Planning, added: “We want to give the communities we serve the opportunity to help with this transition by investing directly into our pipe replacement programme.

“It provides a means by which we can engage with each other on the energy transition, build trust and create a roadmap to Net Zero that feels like a just transition for all.”

More information about this project is available on the Abundance Investment website.