Did anyone tell National Grid Gas?

In its strategy document ‘Towards 2030′ National Grid sets out ambitious, and very welcome, plans to take on the challenge of transforming the UK’s energy system. It says, “As the System Operator for Great Britain, we are privileged to sit at the heart of the energy system, running the gas and electricity networks” as we head towards a low-carbon energy future.

It’s a great vision. Has anyone told the National Grid Gas?

At the moment, there is a big hole in the middle of governance and operation in the GB energy system.

National Grid is not, as stated, the ‘System Operator for Great Britain’ (note the capitals). National Grid ESO is the new electricity system operator, and it is now legally separate from National Grid as transmission network owner (they have even built a new HQ next door). And for reasons that go back to the acquisition of the previous gas operator (Transco), National Grid Gas is separate from the electricity system owner and operator – and in gas, it still encompasses both owning the gas transmission network and operating it (the regulator having decided quite recently that a separate operator was not required in gas).

Confused? Bear in mind, none of these National Grid activities is allowed to talk to each other, except at the very highest levels of the group.

So we are in a quandary. If the ESO discussed this future with NGG except at that highest level, it was wrong to do so, because the gas and electricity system operators are required to operate separately.

But if the ESO did not discuss this future with NGG at all levels then it was surely wrong to do so in real terms.

For example, at the moment, gas networks have little idea when gas plant will start up or shut down. The electricity control room is not allowed to tell the gas control room. That also means the gas control room is unable to pass the information to local gas networks  – even though sudden gas demand from gas engines may be a significant proportion of the total in a local network, significantly affecting flows.

The ‘beast from the east’ severely tested system operability (see story Legislation outlawing data flows between gas and electricity System Operators ‘not fit for purpose’ as cold snap tests interaction).

There are long term issues as well. Using renewables to provide system services will make a big financial difference to gas-fired power stations, who currently rely on stacked revenues from providing those services to supplement the increasingly rare occasions when they are required to provide energy. That could be enough to tip some out of operation (and that is clearly of interest to a gas system operator for whom it extremely important to understand what its major users are, and where).

Is this sensible?

Ought the gas SO to be separated from the network owner? Ought we to, in fact, have a GBSO? One that  manages gas and electricity? Both seem logical. Separating operation is no longer appropriate at a time when we need to operate a flexible and fast-changing system, and maintaining ownership is not ideal when we want to use both energy vectors together to avoid building unnecessary pipes and wires.

National Grid has set out a compelling vision of the future. Do we have the right structure to deliver it?


Further reading

National Grid ESO sets out plan to manage grid without fossil fuels by 2025

Legislation outlawing data flows between gas and electricity System Operators ‘not fit for purpose’ as cold snap tests interaction

National Grid Gas tries to see into future as new users test gas network operability

Ofgem confirms National Grid must set up separate system operator company

National Grid Gas signals new products to improve system operability

From the archive: testing the limits of the gas network

A new framework for the energy industry?