Member Article

National Grid has been awarded £4.8m to help improve the way your gas bills are calculated

National Grid Gas Distribution Ltd, along with Norwegian firm DNV GL, has been awarded a new multi-million innovation contract to explore better ways to calculate gas bills that could enable the use of lower carbon alternative gases in the future.

The £4.8m three-year contract, which has been awarded by the Office of Gas and Electricity Markets (OFGEM), will see the pair seeking ways that the energy content of gas can be more accurately measured to help ‘unlock the full potential’ of the gas network.

Currently, gas bills are calculated by first measuring the volume of gas then using an average calorific value to estimate its energy content, a system which fails to recognise the different energy content of renewable gases which are increasingly being utilised across the UK’s power grid.

David Parkin, who is Director of Network Strategy at National Grid Gas Distribution, said that the contract award showed that the UK is serious about the potential for gas grids to deliver ‘low carbon heat’, and that the project would help to deliver a sustainable gas future that works for homes and businesses too.

Traditionally, the UK’s power network has been dependent on North Sea gas since the 1970s; however, liquefied natural gas (LNG) imports have started to play an increasingly important role in our energy mix, accounting for 18% of supply 2015.

It is predicted that by 2030, low carbon alternatives such as hydrogen, biomethane and bio-substitute natural gas could make up as much as 10% of our energy supply, meaning regulations and billing processes need to be updated to handle the increasing array of energy sources.

Hari Vamadevan, Regional Manager UK & Ireland, DNV GL - Oil & Gas, said that the work his firm would be carrying out with the National Grid will support the development of more accurate billing methodologies to deal with the UK’s changing energy needs.

He commented: “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.”