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National Grid Fossil Fuel Transfer Costs National Grid Gas (Distribution) 2013/14 and 2021/22

Category Fossil Fuel Transfer Costs
Source National Grid
Year for which cost is valid 2013/14 and 2021/22 2013


Detail on the conditions under which this cost is valid:

  • All costs in 2009/2010 prices
  • Financial Year 2013/14:
  • Fixed OPEX Costs 2013/14 = £/a 530m
  • Fixed Capital Costs 2013/14 = £/a 720m
  • Variable OPEX Costs 2013/14 = cost of gas multiplied by 1525GWh/a (shrinkage level)
  • Financial Year 2021/22:
  • Fixed OPEX Costs 2021/22 = £/a 420m
  • Fixed Capital Costs 2021/22 = £/a 855m
  • Variable OPEX Costs 2021/22 = cost of gas multiplied by 1225GWh/a (shrinkage level)
  • Costs of decommissioning the entire Gas Distribution Network is in the region of £4,088m (Source: ENA).
  • Costs are largely independent of volume, scenarios that indicate reductions in energy conveyed are not likely to materially impact on the fixed cost element. Assuming a cost per unit of energy may lead to inaccuracies in cost calculations.
  • Distribution networks are largely fixed costs based on investments in constructing, maintaining and replacing a network designed to function over the peak energy demand at a specified point in time. Approximately 3% of costs associated with leakage, own use and theft of gas on the Gas Distribution System (i.e. Shrinkage Costs) vary to an extent with gas throughput (i.e. variable opex costs).
  • Specific replacement programme relating to metallic pipe assets between 2002 and 2032 assumed in investment. Between 2013/14 and 2021/22 it has been assumed that 25% of replacement costs have been expensed within year.
  • Operational costs relate to repair, maintenance and the provision of the gas emergency service - these costs remain fixed in line with geographical requirements for existing assets.
  • Costs based on 2010 process and exclusive of Tax, Regulatory Licence Fees and Business Rates.

Limitations of this cost estimate

  • Costs have been based on National Grid's 4 gas distribution network regulatory plans (apart from decommissioning costs). To obtain true cost estimate of GB's Gas Distribution Network costs from other four networks would be required.
  • Figures would need to be doubled to provide an estimate of the total costs for GB's gas distribution grid (accounting for the 4 distribution networks not owned or operated by National Grid).

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