For Centrica to be aligned with the goals of the Paris Agreement, four things need to happen:
- The company needs to accelerate the installation of smart thermostats, annual installs of EV charge points and heat pumps in the UK to hit its target of 28% reduction of scope 3 emissions by 2030 versus 2019.
- Centrica needs to replace cashflow from businesses in natural decline, especially gas upstream, to fund clean growth beyond 2024-25. Clean growth includes the potential conversion of gas storage at Rough to hydrogen.
- At the same time, the Regulator needs to develop a remuneration mechanism to support hydrogen conversion from gas.
- With 85% of UK consumers using gas for heating connected to the grid, the Government needs to set an ambitious broadly funded strategy for decarbonising heat in buildings. Electrification may be accelerated with a narrowing of the electricity/ gas price gap.