Gas transmission/distribution

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Ofgem is consulting on proposals for the Future System Operator to become a “central network planner” as part of its joint review of offshore electricity transmission with the Department for Business, Energy and Industrial Strategy. The regulator had already suggested this as one of its key roles and responsibilities when outlining its intentions for the Future System Operator – a fully independent system operator for electricity and gas – in an earlier consultation in June.
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Equinor has awarded contracts to three consortia to provide design proposals for the H2H Saltend hydrogen production plant it is planning to build in the Humber region. The 600MW facility, which will produce so-called blue hydrogen by reforming methane and capturing the resulting carbon dioxide emissions, is being developed as part of the Zero Carbon Humber industrial cluster.  
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The Competition and Markets Authority (CMA) has issued its final determination on the RIIO2 appeals by transmission and gas distribution networks. The CMA made no significant changes to its provisional decision in August, upholding Ofgem’s reduction to the cost of equity but removing the outperformance wedge introduced by the regulator to counteract information asymmetry between itself and the networks.
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A former partner at Ofgem has said she is still mystified as to why the regulator handed some companies penalties and others rewards under the new business plan incentive mechanism for the RIIO2 price controls. Maxine Frerk said Ofgem needs to provide more clarity on exactly how networks’ business plans are judged. Its chief executive, Jonathan Brearley, told Utility Week some companies had initially failed to show their plans were in the interest of consumers.
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Politicians and business leaders want the country to deliver a green revolution, create jobs and boost the economy. As part of our Build Back Better campaign, Utility Week in association with Addleshaw Goddard has published a major new report exploring the significant role utilities can play in fulfilling these ambitions.
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If hydrogen is to fulfil its potential as a driver of decarbonisation then large-scale production projects need to kick off in the next few years. According to Gas Goes Green Champion, and former Cadent chief executive, Chris Train, the first step should be to start the process of allowing gas networks to blend hydrogen into the grid.
Opinion

Latest in Gas transmission/distribution

Cadent workers will stage a 48 hour walk-out at the end of May in a dispute over pay, the GMB Union has confirmed. Gary Carter, GMB national officer, said Cadent is “out of touch” with its workers and with the cost-of-living crisis.  
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National Grid has seen its profits surge to almost £4 billion following its acquisition of Western Power Distribution, the commissioning of two new interconnectors to France and Norway, and accelerated investment in the electricity transmission network. Utility Week spoke to chief financial officer Andy Agg about its financial results for the year to the end of March.
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Cadent engineers began taking part in a ban on overtime on Tuesday (10 May) as part of a dispute over pay, the GMB Union has confirmed. In April field-force workers rejected a 2% pay increase for 2021 and 4% from July this year and subsequently voted to walk out in a strike ballot.
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Ofgem has set out the new challenges for the second round of its Strategic Innovation Fund, which will begin accepting applications in September 2022. The second round will seek to address four innovation challenges and will be the first to be open to electricity distribution networks.
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Soaring gas prices have ramped up the costs of producing blue hydrogen. Its critics say this should be the final nail in its coffin, however advocates say it is a necessary bridge to the development of truly zero-carbon hydrogen. Tom Grimwood explores the arguments on both sides.
Analysis
Almost 2,000 field force workers for Britain’s largest gas distribution network will walk out later this month in a dispute over pay, the GMB Union has announced. A ballot was held after Cadent workers rejected a 2% pay increase for 2021 and 4% from July this year.
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A new government body will be set up immediately to help deliver 24GW of nuclear capacity by 2050 as part of the prime minister’s strategy for energy security in Great Britain. Boris Johnson’s plan, which seeks to limit the country’s exposure to rising prices and volatility on international energy markets following Russia’s invasion of Ukraine, also includes updated 2030 targets for both offshore wind and hydrogen production.
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The statutory duties of the Future System Operator (FSO) will contain "clear whole systems expectations" to mitigate the risk of a "bias" towards electricity, the government and Ofgem have said in their joint response to a consultation on its functions and powers. The new body will absorb both National Grid Electricity System Operator and parts of the system operator for gas.
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National Grid’s chief strategy officer Ben Wilson talks to Utility Week about the company’s “pivot towards electricity”, while stressing that hydrogen will have a “significant role” to play in the net zero journey. He also reflects on the potential for an interconnected North Sea grid and the lessons from his time spent running the gas network in Australia.
Interviews
A new think tank has been launched by the UK Hydrogen and Fuel Cell Association (UK HFCA) to explore the potential use of nuclear energy, both electrical and thermal, to produce zero-carbon hydrogen. The Nuclear Enabled Hydrogen Working Group will include academics, experts from the National Nuclear Laboratory (NNL), the law firm Burges Salmon and oil and gas services company Petrofac.
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The Energy Networks Association has announced its chief executive David Smith is stepping down from the position at the end of this year following nearly two decades at the organisation. Smith joined the organisation in July 2003, serving as deputy chief executive until his promotion to chief executive in October 2007.
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