National Grid has said half the country's household gas heating could come from biogas made from waste - providing a reliable source of energy as North Sea reserves run down.

The transmission company published a report today looking at the use of biodegradable waste streams including sewage, food and wood to make biogas that could be injected into the national gas pipelines.

Compiled by analysts from Ernst & Young on behalf of National Grid, the report suggested that biogas could offer 18% of the UK's total gas consumption, 48% total domestic gas demand and 10% of the overall UK energy demand.

Such a scenario would require £30 billion of capital expenditure, the report suggests, but adds that £20 billion investment is needed anyway in the UK's waste management infrastructure.

A small quantity of energy-rich biogas is already being made around the country in a growing network of anaerobic digestion facilities. Biogas is also being produced from many of the nation's landfill sites.

However, at the moment almost all of this biogas is burned to generate electricity.

But National Grid said this "valuable resource" could be used much more efficiently by injecting it into the gas grid by removing contaminants to produce biomethane. The company said biomethane is already being injected into gas pipelines in Europe.

The UK government is currently pushing for more anaerobic digestion plants to be set up to produce energy from food waste, and new technology is being developed that could also turn materials like wood or other energy crops into biogas.

Janine Freeman, head of National Grid's sustainable gas group, said: "Biogas has tremendous potential for delivering large scale renewable heat for the UK but it will require government commitment to a comprehensive waste policy and the right commercial incentives."

National Grid said today that producing biogas could be carried out at a "similar price to other renewable energy sources", but said there would be less disruption to consumers because the UK already has an "extensive" gas grid.

 

"No insurmountable difficulties"

The National Grid report said there were "no insurmountable difficulties" to delivering biogas through the national pipelines.

The main hurdle, it says, is getting the right commercial incentives in place to drive biogas injection, rather than electricity generation.

Currently, the major incentives for biogas producers is the Renewables Obligation, which is only available for electricity generation, or Renewable Transport Fuel Obligation Certificates for the few projects turning biogas into transport fuel.

There are new Renewable Heat Incentive proposals being developed by the Department of Energy and Climate Change, but experts fear these could be two years away. Feed-in tariffs proposed by the government to support small-scale electricity generation could still persuade biogas producers to stick with electricity generation.

National Grid said it had passed on its report to energy secretary Ed Miliband.

Biogas organisations have already been meeting with government officials over the winter, to discuss the requirements for injecting biomethane into the grid. The issue is likely to be included within the government's expected Heat and Energy Efficiency Strategy, which is due for a first consultation later this year.