Network Resilience Means Sound Asset Management

I recently attended a webinar hosted by National Gas to outline and discuss the Gas System Operator (GSO) considerations of the RIIO-GT3 business plan, which is to be in line with Ofgem’s strategic priorities for resilient supplies, high quality of service, and a low cost transition to net-zero. This article will highlight the importance of asset management in maintaining a resilient network.

GSOs’ Roles in Business Planning

The name of the game is “Network Resilience,” but what does this mean? In short, GSOs need to deliver physical, financial, and increasingly, cyber future proofing of the network to ensure that there are efficient and robust systems for the delivery of gas to consumers.

Delivering resilience could entail anything from being able to commercially withstand the transition to net-zero, through to maintaining efficient networks and minimising leakage.

The Situation

Gas prices have been exacerbated in the medium term by post Covid demand and the Russo-Ukraine War, but are slightly cheaper at the time of writing due to two mild winters and small increases to import capability. The price of gas is sensitive, and all that would be needed to ramp up prices further is a harsh winter. This is because the renewable shortfall of demand is being met majoritively with liquified natural gas (LNG).

Local distribution zone demand has been decreasing since 2020, by a factor of 20% since then and now. That said demand on LNG for power generation remains volatile, and whilst its use should decrease as we approach net-zero, the current way we are meeting the shortfall of renewable generation, and fulfilling network resilience in the immediate term, is by the use of LNG. The UK Continental Shelf supply is decreasing, as to be expected, so the cost of resilience will spiral higher for as long as we are reliant on LNG.

What can GSOs do?

Key to the delivery of a resilient network will be good asset management and emergency management. National Gas specifically advises GSOs to develop the way shutdowns are delivered to enable access to the network that will help deliver the asset management plan. To translate to an output, GSOs should focus on having robust legal consenting structures covering their networks with capacity to manage the interests of stakeholders affected by GSO works.

One of Ofgem’s strategic priorities is to facilitate a low cost transition to net-zero. To that end GSOs should anticipate the repurposing of assets for alternative gases. The Government are also due to advise on whether they will push forward with hydrogen blending. Whilst both these proposals are contentious, GSOs are welcome to feed into the Centralised Strategic Network Plan which is intended to publication in 2026.

What can DM do for you?

With a deep understanding of acquisition of rights over land and gas legislation, DM are positioned to support GSOs with their asset management, both in delivering new consents for new apparatus and all aspects of stakeholder engagement for emergency management. We are experienced in consenting new apparatus, facilitating maintenance works, and the replacement of existing networks across an array of gas, electricity, and water clients.