OFGEM has awarded the National Grid, in partnership with DNV GL, a new contract to improve the way gas bills are calculated.
The contract is also to examine the use of lower carbon alternative gases to fuel the homes and businesses of the future.
Unlike electricity, gas must be measured first in volume terms and then have its energy content assigned.
The £4.8million, three-year contract seeks to explore ways in which the energy content of gas could be specifically assigned rather than use the present flow-weighted average calorific value.
The aim of this project is to help unlock the full potential of the gas network to distribute renewable and low carbon alternative gases, helping to deliver an affordable low carbon energy future for consumers.
David Parkin, director of network strategy at National Grid gas distribution, said: “OFGEM’s decision to award National Grid £4.8 million for this programme reflects how serious the UK’s gas grids are about delivering low carbon heat, as well as delivering a sustainable gas future which works for consumers as well.”
Hari Vamadevan, Regional Manager UK & Ireland, DNV GL – Oil & Gas, added: “We believe gas has a key role to play as an affordable and cleaner energy source.
“However, times have changed and renewable gases are increasingly being introduced into the grid, requiring more accurate billing methodologies.
“This project with National Grid will give new insights on the financial consequences of new billing methodologies for gas consumers, and will help give confidence in gas pricing based on energy content.”
The United Kingdom has been dependent on North Sea gas since the 1970s, with regulations and billing regimes designed for this source of gas.
The supply market is changing rapidly with liquefied natural gas (LNG) imports making up 18% of supply in 2015.
By 2030, hydrogen, biomethane and bio-substitute natural gas from a large number of sources could account for 10% of domestic gas usage and the distribution network has to be able to accommodate the differing constitution.
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