It has sold its controlling interest in gas transmission and spent £7.8bn last year to acquire Western Power Distribution, the country’s largest electricity distributor. In contrast to Macquarie, the National Grid has bet on greater electrification rather than a shift to hydrogen. John Pettigrew, chief executive of National Grid, said: “We’re pleased to reach the next milestone in this process, and we’ll continue to work closely with the consortium.” “We are pleased to continue our strong relationship with National Grid, and aspire to acquire the remaining interest in due course.” “We have been working closely with the National Gas team since January as they have continued to meet the energy needs of millions of households and businesses. National Gas is currently embarking on a national programme – called Project Union – to make the country’s gas pipes compatible with hydrogen.Ĭhris O’Shea, the boss of British Gas owner Centrica, warned that ruling out hydrogen heating prematurely risked derailing the race to net zero.Ĭommenting on the National Gas deal, Martin Bradley, European head of infrastructure for Macquarie Asset Management, said: “This additional investment underlines our commitment to National Gas and the critical role it plays in the UK’s energy system. Industry bosses criticised Mr Shapps’ comments as “unhelpful” and “inaccurate”.

Many experts have instead argued that heat pumps are a more efficient way to heat millions of homes – but uptake of the devices among the public has been slow, largely due to their prohibitive cost. He warned that pivoting to hydrogen would mean “you have to replace potentially quite a lot of piping” and require production of so-called green hydrogen – hydrogen made using renewable power – in huge quantities.

Last week, Grant Shapps, the Energy Security and Net Zero Secretary, warned that he was “not sure that home heating will be all through hydrogen”. However, critics say hydrogen is far more difficult to transport than natural gas, dramatically more energy-intensive to produce and will be needed by other sectors before it is available to households, for example transport and heavy industry. The idea has been framed as a way of saving money by using existing infrastructure and sparing consumers from having to buy expensive heat pumps that run on electricity.Ī Macquarie spokesman said hydrogen would be “essential in helping the UK decarbonise industry, dispatchable power, and alongside heat pumps in decarbonising home heating.” Macquarie, National Gas and other gas network operators are championing the idea of repurposing the country’s pipelines to carry hydrogen, which would then be used for cooking and heating via “hydrogen ready” boilers. The transaction comes amid debate over the future of Britain’s gas network, which currently pipes natural gas into millions of homes but will have to find a new purpose in the push towards “net zero” carbon emissions. Macquarie and its partners also hope to acquire those shares as well, under an option agreement that will come due next summer.

National Grid, which owns the remaining 20pc of the business, will bank £700m in the deal. The National Grid has sold off more of Britain’s gas network to foreign investors just days after Grant Shapps raised doubts about plans to use the infrastructure for hydrogen heating.Ī consortium led by Australian investment bank Macquarie on Wednesday said it was exercising an option to acquire another 20pc of the business now known as National Gas, taking its control to 80pc.

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