Interview: Steve Brittan, Xoserve chief executive, talks about hydrogen blending and gas network data

Steve Brittan, chief executive of gas industry data services company Xoserve, says the industry has to take a programme approach as the country transitions to lower carbon energy sources

SJB mugshot 23When I talk to Steve Brittan he is just six months into his role as chief executive of Xoserve, the data services company for the gas industry, but he knew what to expect after taking on a non-executive director role for the company in 2020 and a career history in technology and innovation.
Xoserve’s key role in data transfer between the country’s gas networks, suppliers and shippers is largely invisible to consumers, but it underpins billion-pound payments across the industry and its importance was illustrated during the recent energy crisis. The government’s Energy Price Guarantee scheme required the company to mobilise fast to put in place the systems that enabled the government to enact its policies around the price cap. Brittan says, “From ministerial instruction to the system being operated was about six weeks. We had to move an awful lot of things quickly that normally take a lot longer”. He says GB’s heavy reliance on natural gas for heating meant that for a short period, “We were the largest drain on government finances,” distributing billions to gas suppliers through an agreed formula each week.
Perhaps that experience underlies Brittan’s caution about the speed with which decisions should be made about how to decarbonise home heating. He says, “Decarbonisation of the electricity grid by 2035 means essentially replacing gas in the electricity mix – and that’s the easy bit in decarbonisation of energy. The hard bit is replacing the gas provided for heating and the stats show it is about four times the amount of energy provided by the entire electricity grid during the winter.” He agrees there will be a role for heat pumps and other solutions such as district heat. But he says the right solution will vary from area to area and, for example, “There could be at least two million homes where it would probably never be the right solution to use a heat pump for a variety of reasons,” not least the electrical loads required.
He says, “so far the debate has been largely at the very high level of hundreds of terawatt hours” for the country as a whole. That has been “absolutely the right thing to do,” because of issues like winter ‘wind drought’ periods, which mean the UK and its European neighbours see cold weather and low wind speeds coincide for several days or longer. But now, he says, that has to be complemented with local ‘bottom up’ information on energy networks.

“My strong view is that you need to keep backing all [technologies], because none of them have scalable technologies that can do this economically, with the required resilience as yet.”

In a new project Xoserve is planning to work with electricity data transfer company Electralink and an energy network operator to look at the energy provided by gas at the localised level. For each zone – possibly just a few streets – it will look at what would happen if gas users in an LDZ move to electricity and how it would affect load on the electrical distribution network. The project is now at a very early ‘proof of concept’ stage, but Brittan says it is “the first one that I’m aware of that brings real-world electricity and gas data together to see the effect of decarbonisation at a local level”.
Brittan is sceptical of suggestions that we could switch entirely to electricity, and especially of suggestions that it could be done quickly. He says, “One thing that policymakers are grappling with at the moment is how many horses we continue to back. My strong view is that you need to keep backing them all, because none of them have scalable technologies that can do this economically, with the required resilience as yet.” He agrees that the vast amount of energy required for heat won’t just be hydrogen, but he points out that several of the large scale electricity options, such as nuclear, are not meeting expectations for timescales, and energy storage is still at a very small scale, and expensive.

Changing the framework
Decarbonising the UK is a whole-economy project. When I ask Brittan about Xoserve’s role he talks about some fundamental parts of the energy governance framework – the Codes that regulate different parts of the industry.
Changing industry codes is currently painstaking and slow, but it is key to delivering change. He says a review of the codes by regulator Ofgem is, “an opportunity for Xoserve to put forward a prospectus to talk about how we could help to develop the gas codes to move the industry forward more efficiently and effectively for the future, taking into account strategic direction from government”. He explains that Xoserve’s systems “put into digital form what the codes are asking for in terms of processes and data. We face into about 60% of the Unified Network Code (UNC), covering gas transport and suppliers and we are involved with the process of code development.”
Xoserve is looking at several areas of code reform, including longstanding plans like bringing together the codes for traditional distribution networks and so-called ‘independent’ gas networks and making the landscape of different administrators ‘more coherent’. But there are other changes needed to code management, as highlighted in recent Ofgem consultations.

“Having systems in place that can handle [gas blending], for example handing the changes in calorific value of the gas, is challenging.”

When Brittan talks about reform, he says future code development should look more like a structured programme than a series of discrete changes, which can seem to be ad hoc. At present, code changes are not prioritised but considered individually, in submission order, and that could stifle transformative change: “When we look at the types of changes that might come through in the next few years, you start to think about the blending of gases such as hydrogen. Having systems in place that can handle that, for example handing the changes in calorific value of the gas, is challenging. We can do it, but the issues are around how we get UNC code development for the future to happen more quickly than we do things today, and also to ensure that we have the digital systems that can implement what is required, which will need an upgrade of the systems we have today.”
Instead of considering single modifications, ““We need to look at what is needed in the next five to ten years, be strategic and ask what we are trying to achieve, and what code changes are required, and this needs to be closely co-ordinated with development of the digital systems to implement that”.

Gas blending
Gas blending – including biogas (which is largely methane, as is natural gas) and hydrogen – “is a very good example of where we need to go away and think about what is needed and where we are aiming”. He says it “is probably for the next few years the most pressing change issue for us, alongside system upgrades”.

Gas blending “is probably for the next few years the most pressing change issue for us, alongside system upgrades”

That is not just because of potential hydrogen blending in GB but because we have gas interconnectors with other countries. “Suppose Europe has gas blending and we don’t… You have the potential for mixed gases going into the networks. That doesn’t work .. and from an Xoserve point of view it is more difficult because you would have to work out whether you are dealing with blended or unblended gases.”
There are some very practical issues around blending hydrogen and methane, because they carry different amounts of energy (described as so-called ‘calorific value’ or CV, expressed in kWh). Consumers are billed on energy content of the gas they use, but gas meters (whether domestic or within the gas network) measure the volume of gas that passes, and from that the energy content is calculated. Brittan says “once you start getting to large volumes of biomethane or hydrogen, a calorific reckoner has to be put into place to make sure customers pay for the energy they use, not the gas volume they use.” There are other complexities.
Brittan says that the point at which the mix becomes significant is very much dependent on the gas mix. A 3% blend of hydrogen by volume will mean a 1% reduction in energy supplied and clearly that will be questioned quickly by a large energy user.
That is one of a number of issues being investigated: “We have convened a group of stakeholders and started to think this all through.” A blend of 20% hydrogen is already proven possible “but where do you blend it, where is the feed, how do I make sure it is still 20% across the network, because we want to make sure that no-one is miss-charged”. The investment required will probably include adding new sensors to the network to ensure the hydrogen blend is as expected.
Brittan says, “We have started asking what it means for the codes and what processes you have in place to address this, and we don’t know all the answers yet, far from it. But they are all things that will have to be done if you want to blend gases in future.” He thinks significant scale of mixed gases are “unlikely this decade, but clearly is an option for the future” but at this stage there is uncertainty over whether it will be required at all.

Grid defection
A few years ago the rise of solar PV and other forms of self-generation raised the possibility of ‘grid defection’, where consumers large and small have little or no connection to the network. I ask Brittan how important similar ‘grid defection’ is for the gas network. My example is large gas users whose demand helps ‘pull’ gas through the pipes; if they switch to electric it may mean more compression is needed to ‘push’ gas through. But there is also an economic aspect, as domestic and business consumers switch to electricity.

“One issue is around whether we continue to allow individual houses or companies to get heat pumps with no co-ordination. If you do that it could be chaotic.”

Brittan says, “With others, we are starting to model the effects. First is mainly a question of economics. You have a fixed network; if the number starts to fall, the fixed cost goes up. Second, at what point does the network become sub-optimal? I suspect there is no single answer. It will vary by network zone.”
He adds, “We’re beginning to answer more detailed questions about what it means to decommission the network or to support blending. One issue is around whether we continue to allow individual houses or companies to get heat pumps with no co-ordination. If you do that it could be chaotic. At some point that network would become unviable – economically and perhaps also technically”.
He warns, “People say we switched from town gas to natural gas” and then suggest a hydrogen switch will be similar, but “It’s not necessarily a fair comparison as the town gas conversion project was planned over an extended period, and essentially mandated.”

Replacing the platform
Brittan has mentioned the need for a technical upgrade for Xoserve’s UKLink platform several times.
That could raise fears among industry members who recall the previous upgrade, dubbed Project Nexus, which was delayed by years and cost far more than was estimated. Brittan says there were a number of problems with Project Nexus: “The requirements capture was not very good. There were also several major changes made to the UNC code while the digital systems being developed were being put in place, so it was being designed against a moving target and that is always a bad place to be.”

Project Nexus “was being designed against a moving target and that is always a bad place to be.”

This time, he says, the company will do better. But at the same time we need “a co-ordinated approach between code development and the digital systems needed to implement it – they need to be brought together more coherently. We think that is one of the key opportunities afforded by Code reform and something we have to get our hands round for the upcoming codes review. We will be making the case to Ofgem that the way the digital estate is developed and the way the code is developed have to become much more unified than they are at the moment.” For example, in our discussion of gas blending Brittan says there is a decision to be made: “if UKlink upgrade has to be capable of processing systems with blended gases in the future, do we build it in now, as part of the planned upgrade ?” That may be wasted investment if blending does not happen, but on balance he thinks it should be actively considered.
But whatever its final scope, when it comes to replacement Brittan points out that there is no alternative, because the SAP platform on which UKLink operates is going out of service in at latest by 2030. He says, “Given how long it takes to build these things, we are starting now”.

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