Reducing gas leakage across gas infrastructure is a fundamentally important global challenge that needs to be addressed to achieve net zero targets. The project aims to use the latest digital technology and data to provide increased awareness of gas network leakage, thus enabling more accurate operational and investment planning decisions. The improvement in operational and investment planning decisions ultimately lead to reduced gas leakage, improved network safety, and reduced customer bills. Overall, the project aligns closely with Ofgem's SIF eight eligibility criteria listed in the SIF governance document. A project summary slide, and 'postcard from the future' are included as appendices to this response.
As the lead Project Partner, Cadent is responsible overall for the successful delivery of the project. As a gas distribution network operator, they are currently responsible for tracking and managing gas leakages on the gas network and adhering to their regulatory license conditions.
As Cadent's lead delivery partner for several work packages, Guidehouse brings global experts working with global gas utilities and other sectors on a day-to-day basis. This broad awareness and knowledge of global solutions and processes used to identify and address gas infrastructure leakages will be vital to determining optimal solutions in the UK.
SGN and NGGT have been identified as additional Project Partners for the Discovery phase. As peer gas distribution and transmission operators, they will play a vital role in the project by bringing additional insights on the topic and ensuring that any future solutions and learning can be applied to other gas network operators in the UK, meaning that all UK customers benefit from the project.
Currently, as per their regulatory license, all GDNs use the same approach to gas leak detection, therefore the digital platform is directly applicable to peer GDNs in the UK. Managing gas network leakage is a key challenge in achieving net zero and extends well beyond GDNs in the UK, therefore the learning will likely be valuable to international utilities that operate gas infrastructure.
A short overview video on Youtube is available using this link: https://youtu.be/QJYoEV9hq5g
Uploaded Cadent SIF Application - Postcard and Project on a Slide (003).pdf
Microsoft PowerPoint - Cadent - SIF Application - Postcard & Project on a Slide.pptx (apply-for-innovation-funding.service.gov.uk)
Problem Bring Solved
GDNs in the UK carry out asset replacement of their mains pipelines regularly. This is primarily driven by the HSE to manage the safety risk of gas escapes. The volume of assets to be replaced is driven by a leakage model which does not provide an accurate view of leak volumes and locations. Legacy methods from 1994 & 2002 are still being used. The cost of gas lost from the Cadent network stands at £58m (2021/22).
The model currently used only considers mains pipes and transposes the rates across to AGIs. This is an inadequate approach and there is an opportunity to better model the whole network of assets including service governors, local transmission, NTS Offtakes and more. This will provide a whole network view of GHG emissions and performance.
A recent quantified commitment at COP26 detailed a 30% methane emissions reduction by 2030 compared to 2020 levels. It is likely that the UK will adopt this into legislation and specify improved emissions performance from the gas networks.
•The cost of methane losses from Cadent assets alone was £58m in 2021/22.
•This results in a significant overall quantity of gas lost through shrinkage, the costs of which are socialised to UK gas consumers.
•The value of lost gas will increase as gas networks transition from natural gas to hydrogen and other low carbon gases.
•Asset replacement is an expensive activity to reduce leakage and represents a large cost to consumers. This is currently done on a volume of mains replacement interventions rather than any location or asset type prioritisation.
•Inaccurate leak modelling leads to suboptimal network investment decisions, meaning reduced value to consumers.
It is proposed to address this problem by collating available data sets, identifying new data and technologies, and developing a digital platform to aggregate these and offer insights on leak type, location, volume and proactive intervention options. With the reduced cost of monitoring devices and technologies, it is anticipated that this is more feasible than has been the case in the past. Additionally, digitalisation is a key future focus of Ofgem for energy networks in the UK. Enhancing the digital capability of the gas network will offer benefits wider than the scope of this project, including the facilitation of a potential digital twin, live operational intelligence and more.
Impacts and benefits
The business case verified the significant net benefits to consumers and to the environment that
were identified at the application stage, demonstrating that it is cost effective to pursue. The
benefits were the same as identified in the application phase as these covered the scope of the
project very well. A net present value analysis including all key cost and benefit streams
demonstrated the net present value of the project in 2050 to be £542 million.
The Discovery phase business case identified and quantified two key benefit streams of the
project if all UK gas distribution networks were to implement the idea:
• Avoided loss of natural gas and/or hydrogen (benefit to the end consumer) was found to
be 7,831 GWh by 2050
• Avoided greenhouse gas emissions (benefit to the environment and society) was found to
be 10,790 kt CO2eq by 2050
The potential decrease in emissions from 2020 to 2030 was found to be greater than 30%, which
supports the government priority to tackle methane emissions as a Participant of the Global
Other benefits were identified and described qualitatively:
• Health & safety: reduces the risk of accidents by reducing the number of site visits
• Reputational: sends a strong message that distribution networks are doing the right thing
in terms of leakage and sets an example for other networks and even other countries to
do the same
• Operational: improved certainty on operating conditions and modelled outlooks
• Reduced disruption: less noise and time taken when fixing leaks thanks to better
localisation, improving public confidence and social acceptance
• Leak prevention: in future, the platform could be developed to perform predictive leak
prevention as well as leak detection
• Fire hazard prevention: allow networks to take immediate action to prevent ignition by
providing real-time alerts
The project also addresses the concerns of gas shippers such as Centrica, about the current
method used for allocating shrinkage gas and their negative impact on the market.
Reduced gas leakage will positively reduce the overall demand, this could have positive
implications on imports and energy security, improving the system resilience. It could also help
the gas transmission system to improve their leakage strategy, proving benefits across the full
beach to meter supply chain.