Decarbonising CCGT, grids & Scope 3 Emissions

• Engie needs to consider retiring merchant CCGT capacity. Its plans to reduce carbon intensity for scope 1 and 3 emissions from generation are not fully aligned with the goals of the Paris Agreement, while current levels of profitability may be unsustainable.
• All three companies need to deliver on plans to accelerate the renewables capacity build, particularly Naturgy.
• A regulatory framework is needed for remuneration of biomethane and hydrogen. Without this, Engie and Naturgy’s gas grids risk being stranded as Government policy is full decarbonisation by 2050.
• The biggest challenge is scope 3 emissions reduction. In view of the scale of the task, particularly in the UK, Government needs to set dates and develop funding support for the decarbonisation of heat.
• This report includes separate company notes on each of the CA100+ European gas names, Centrica, Engie and Naturgy.