Memorandum submitted by National Grid |
1. National Grid owns and operates the national
gas transmission system (NTS) throughout Great Britain and, through
its four gas distribution networks, distributes gas in the heart
of England to approximately eleven million offices, schools and
homes. National Grid also owns and operates the high voltage electricity
transmission system in England and Wales and, as National Electricity
Transmission System Operator (NETSO), operates the Scottish high
voltage transmission system. In addition National Grid owns and
operates significant electricity and gas assets in the US, operating
in the states of New England and New York.
2. In the UK, National Grid's primary duties
under the Electricity and Gas Acts are to develop and maintain
efficient networks and also facilitate competition in the generation
and supply of electricity and the supply of gas. Activities include
the residual balancing in close to real time of the electricity
and gas markets.
3. Through its subsidiaries, National Grid also
own and maintain around 18 million domestic and commercial meters,
the electricity Interconnector between England and France, and
a Liquid Natural Gas importation terminal at the Isle of Grain.
The wholly owned subsidiary National Grid Carbon Limited has
advanced the transportation and storage elements of the Carbon
Capture and Storage (CCS) supply chain.
4. This response is on behalf of National Grid
5. If UK produced shale gas can be developed
economically then it could make a useful contribution to the UK's
gas supply in terms of diversity and security of supply. There
are likely to be technical challenges associated with the use
of shale gas (in particular the UK requirements for gas quality
and for entry capacity). However we do not anticipate that these
should be insurmountable and we have experience of working with
shale gas from our US operations which may be beneficial
in developing the use of this new source of gas in the UK.
6. If shale gas becomes a significant contributor
to UK gas supplies, this would represent an important development
that we would need to take account of in relation to future network
investment (potentially in relation to both the NTS and the Distribution
Networks), so it will be important that developers provide us
with a clear understanding of the scale, timing and locations
of shale gas developments. This inquiry into shale gas is therefore
timely given the fact we are currently undertaking a Price Control
Review under the new RIIO
framework as it should give us some ability to reflect the implications
of UK shale gas development in our submissions to this process.
7. If plans for significant UK shale gas development
are forthcoming, we will reflect the impact of this new source
of gas in our "Ten Year Statement". This report is
published annually and provides a ten-year forecast of the gas
transportation system usage and likely system developments. It
is produced in response to obligations placed on us under our
Gas Transporters' Licence and the Uniform Network Code and is
designed to help current and future potential users of the NTS
who are contemplating connecting to or using our system to identify
and evaluate opportunities.
8. Subject to meeting existing network entry
arrangements (including in relation to gas quality) NGG would
welcome the additional supply diversity that indigenous shale
gas production would deliver.
9. NGG are not in a position to comment further
on the questions raised in the call for evidence. NGG would look
forward to supporting and working with the Energy and Climate
Change Committee, DECC and other stakeholders to address the challenges
that development of shale gas may present.
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