National Grid announces plan to decarbonize by 2050

Haze from fires covers New York
The sun, appearing orange due to smoke haze from forest fires, rises behind the skyline in New York City, New York, U.S., July 21, 2021. REUTERS/Bjoern Kils/New York Media Boat

April 19 (Reuters) - Utility giant National Grid (NG.L) is planning to eliminate fossil fuels from its heating systems in New York state and Massachusetts by 2050, primarily by expanding the use of electric heat pumps and sourcing more renewable natural gas (RNG), the company said Monday.

National Grid plans to have New York and Massachusetts using 100% fossil-free gas by 2050, relying on a significant increase in use of RNG produced from farms, landfills, wastewater facilities and imports instead of conventional natural gas.

The utility is targeting 50% of buildings' heating to come from electric heat pumps with energy sourced from sources like wind and solar.

The other 50% would come from "fossil-free gas" and a hybrid of electric fossil-free gas systems, the company said.

Currently, approximately 57% of New York and Massachusetts building heating systems run on natural gas while 25% run on oil.

Earlier this month, New York finalized a $220 billion budget that omitted a provision to make the state the first to ban natural gas and other fossil fuels in new construction.

Companies and trade groups such as National Grid lobbied against that measure, arguing that giving up on gas would boost consumer costs because electric heat is much more expensive. read more

The utility's plan deviates from climate action plans from New York and Massachusetts agencies which propose that households electrify nearly all of their heating systems by 2050, calling their vision a hybrid approach.

National Grid aims to serve 10-20% of gas demand with renewable natural gas by 2030, the company said, while converting a majority of customers who heat with oil to electric heat pumps by that year.

RNG is produced when gas is captured from food waste, manure or landfills and turned into fuel for transportation or heating.

That gas sells at a premium to market rates, and supplies of the fuel are more limited than conventional gas.

Other state utilities have also set ambitious renewable natural gas targets. California's SoCalGas wants to source 5% of the gas it sells from renewable natural gas by 2022 and 20% by 2030, its chief environmental officer told Reuters last year. read more

New York's gas use rose to around 3.44 billion cubic feet per day (bcfd) in 2021 from about 3.39 bcfd in 2020 when lockdowns depressed demand. That's still below the record of 3.63 bcfd consumed in 2018, according to federal energy data.

Gas use by New York's residential and commercial consumers has dropped for three straight years, but consumption increased for both industrial customers and power generators.

In 2019, New York legislators approved a bill that committed to slash greenhouse gas emissions 40 percent by 2030, with an overall target of reducing emissions by 85% by 2050. read more

Reporting by Laura Sanicola; Editing by Aurora Ellis

Our Standards: The Thomson Reuters Trust Principles.

Thomson Reuters

Reports on oil and energy, including refineries, markets and renewable fuels. Previously worked at Euromoney Institutional Investor and CNN.