The gas market in Great Britain: Concerns over security of supply & rising costs for consumers

Richard Mason's picture
Richard Mason, Innovation Project Manager, Scotia Gas Networks
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The gas market in Great Britain (GB) is regulated by the Gas Safety (Management) Regulations (GS(M)R) 1996, which dictate the gas compositions that can be distributed and utilised safely and efficiently across the country.

The established problem with these regulations is that increasingly, from around 2005 and beyond, dwindling gas reserves in GB have created security of supply concerns, leading to GB gas price increases. GB is now a net importer of gas, with prices and access to supply increasingly depending on markets elsewhere as a result. Hence GB gas prices exhibit volatility, given the short-term and/or spot market conditions.

Whilst the sources of new natural gas are numerous, gases have different compositions and GB’s specification for gas composition is very prescriptive, therefore limiting the market and exacerbating the problem. The current GB gas specification requirements, as set out in GS(M)R (1996) differ from those employed elsewhere in the European Community and internationally. This poses difficulties for the wider industry with regard to the increased importance of imported natural gas, LNG and unconventional gas such as shale gas and coal-bed methane. Furthermore it restricts the use of biomethane as a renewable green gas and hydrogen as a clean gas option for injection to the networks.

Current arrangements dictate that in order for gases with compositions that sit outside of GS(M)R to be conveyed and used within GB, expensive gas processing is required to bring it within these specifications. This limits the type and source of gases which can be used in GB and, in turn, ultimately leads to increased costs for the consumer.

With a backdrop of this type of market rigidity, it is necessary to redefine GB gas specification in order to help tackle the problems associated with security of supply and rising gas costs for the consumer. Changing GS(M)R to align with European gas specification (EASEE Gas) will open the market and accommodate the introduction and use of abundantly available alternative sources of gas without the need for expensive processing.

Outside of GB, mainland Europe seeks to conform to a wider gas specification called EASEE Gas, with the main difference relating to the Wobbe Index (WI). This enables a greater variety of gas sources to enter the networks harmonising gas inter-connection between countries. Using gas which meets EASEE Gas specification but sits outside of GS(M)R is the realistic next step for Great Britain. [Article ends.]

Will GB's gas keep flowing? How to maximise the levels of gas interconnections between GB and mainland Europe? Leave your comment below.

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