Table of Contents
Key Insights
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- How does Ofgem’s new regulatory framework, the RIIO model, impact distribution network operators’ approach to infrastructure management and investment?
- What are the key challenges faced by the UK’s gas network operators? How are companies innovating to address these challenges?
- What are the key drivers for replacement expenditure by gas distribution network operators?
- What are the key findings to date by the ongoing CMA inquiry into the energy market?
Introduction
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- Definitions
- Methodology
- Abbreviations
Market Positioning
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- Key points
- Overview
- Ofgem regulates gas network operators via price controls
- Customers
- Suppliers
UK Economy
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- Overview
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- Figure 4: UK GDP quarterly development, 2003-15
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- Figure 5: UK GDP in economic downturns and recoveries since 1979
- Inflation
- Interest rates
- Consumer spending
- Business investment
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- Figure 6: UK GFCF 2003-15
Market Factors
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- Key points
- Social factors
- Economic factors
- The UK’s increased reliance on gas imports
- Potential for shale gas extraction
- Wholesale gas prices
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- Figure 7: Average wholesale gas prices, 2002-15
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- Figure 8: Average wholesale gas prices, 2002-15
- Environmental and Legislative Factors
UK Gas Demand and Supply
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- Key points
- Overview
- UK gas demand in decline
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- Figure 9: Segmentation of industrial gas consumption, by end use industries, UK, 2010-14
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- Figure 10: Segmentation of gas consumption, by non-industrial sectors, UK, 201014
- Figure 11: Segmentation of gas consumption, by non-industrial sectors, 2014
- Power generation
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- Figure 12: Gas supplied for electricity generation, UK, 2011-15
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- Figure 13: Gas supplied for electricity generation, UK, 2011-15
- Interruptible
- Industrial
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- Figure 14: Gas supplied to the industrial sector, UK, 2011-15
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- Figure 15: Gas supplied to the industrial sector, UK, 2011-15
- Commercial
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- Figure 16: Gas supplied to the UK commercial sector, 2010-14
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- Figure 17: Gas supplied to the commercial sector, UK, 2010-14
- Domestic
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- Figure 18: Analysis of the development of gas supplied to the UK domestic sector, 2011-15
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- Figure 19: Gas supplied to the UK domestic sector, 2011-15
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- Figure 20: UK installed base of central heating systems, by type of fuel, 1970-2012
- Regional demand
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- Figure 21: Gas sales and customers by region, Great Britain, 2014
- Northern Ireland gas market
- Gas supply
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- Figure 22: Total gas supply, UK, 2011-15
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- Figure 23: Development of the UK gas supply, 2011-15
Gas Transmission & Distribution Capital Expenditure
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- Key points
- Capital expenditure
- The Market 2011-15
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- Figure 24: Total gas transmission and distribution capital expenditure, 2010/11-2014/15
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- Figure 25: Total gas transmission capital expenditure, 2010/11-14/15
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- Figure 26: Total gas distribution capital expenditure, 2010/11-2014/15
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- Figure 27: Total gas transmission and distribution capital expenditure, 2010/112014/15
- Replacement expenditure (Repex)
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- Figure 28: Length of gas mains replaced, by distribution network operator, 2009-13
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- Figure 29: Cumulative replacement expenditure during GDPRC1 2008-13, by GDN and type
- Individual companies
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- Figure 30: Gas transmission and distribution capital expenditure by National Grid Gas, 20010/11-2014/15
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- Figure 31: Gas Distribution Capital Expenditure by Northern Gas Networks, 2010/11-2014/15
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- Figure 32: Gas Distribution Capital Expenditure by Scottish Gas Networks, 2010/11-2014/15
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- Figure 33: Gas distribution capital expenditure by Southern Gas Networks, 2010/11-2014/15
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- Figure 34: Gas Distribution Capital Expenditure by Wales and West Utilities, 2010/11-2014/15
Forecast Capital Expenditure
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- Key points
- Overview
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- Figure 35: Ofgem’s required expansion of the number of properties to alleviate fuel poverty, 2013-21
- Innovation at centre of new price control model for gas distribution and transmission network
- Transmission network
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- Figure 36: Capital Expenditure Plans by National Grid Gas Under RIIO-T1, by Category, 2014-2021
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- Figure 37: Annual capital expenditure plans by National Grid Gas Under RIIO-T1, by Category, 2014-2021
- Distribution network
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- Figure 38: Controllable Cost Allowances for Gas Distribution Companies Under (RIIOGD1), 2014-2021
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- Figure 39: Annual capex plans under RIIO-GD1, by GDN, 2014-2021
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- Figure 40: Annual repex plans under RIIO-GD1, by GDN, 2014-2021
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- Figure 41: Forecast total capex and repex during RIIOGD1, 2013/142020/21
- Individual companies
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- Figure 42: Northern Gas Networks Capex & Repex, 2014- 15 (Actual) and 2016-21 (Planned)
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- Figure 43: Northern Gas Networks Capex & Repex Workload, 2014-15 (Actual) and 2016-21 (Planned)
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- Figure 44: Scotland Gas Networks Capex & Repex, 2014-15 (Actual) and 2016-21 (Planned)
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- Figure 45: Scotland Gas Networks Capex & Repex Workload, 2014-15 (Actual) and 2016-21 (Planned)
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- Figure 46: Southern Gas Networks Capex & Repex, 2014-15 (Actual) and 2016-21 (Planned)
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- Figure 47: Southern Gas Networks Capex & Repex Workload, 2014-15 (Actual) and 2016-21 (Planned)
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- Figure 48: WWU Capex & Repex, 2014-15 (Actual) and 2016-21 (Planned)
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- Figure 49: WWU Capex & Repex Workload, 2014-15 (Actual) and 2016-21 (Planned)
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- Figure 50: NGG East of England Capex & Repex, 2014-15 (Actual) and 2016-21 (Planned)
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- Figure 51: NGG East of England Capex & Repex Workload, 2014-15 (Actual) and 2016-21 (Planned)
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- Figure 52: NGG London Capex & Repex, 2014-15 (Actual) and 2016-21 (Planned)
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- Figure 53: NGG London Capex & Repex Workload, 2014-15 (Actual) and 2016-21 (Planned)
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- Figure 54: NGG North West Capex & Repex, 2014-15 (Actual) and 2016-21 (Planned)
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- Figure 55: NGG North West Capex & Repex Workload, 2014-15 (Actual) and 2016-21 (Planned)
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- Figure 56: NGG West Midlands Capex & Repex, 2014-15 (Actual) and 2016-21 (Planned)
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- Figure 57: NGG West Midlands Capex & Repex Workload, 2014-15 (Actual) and 2016-21 (Planned)
Structure of the Gas Distribution Industry
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- Key points
- Industry structure
- Industry development
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- Figure 58: Structure of the Distribution Network Operators, as of February 2016
- Competition in Network Connections
National Grid Gas
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- National Grid looking to sell its UK gas distribution businesses
- National Grid gas’ innovation strategy
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- Figure 59: Financial analysis of National Grid Gas, 2011-15
Northern Gas Networks
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- NGN’ spending plans
- Innovation
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- Figure 60: Financial analysis of Northern Gas Networks, 2010-15
Scotland Gas Networks
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- Innovation
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- Figure 61: Financial analysis of Scotland Gas Networks, 2011-15
Southern Gas Networks
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- Figure 62: Financial analysis of Southern Gas Networks, 2011-15
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Wales and West Utilities
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- Figure 63: Financial analysis of Wales & West Utilities, 2011-14
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Gas Supply Industry
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- Key points
- Recent retail market and industry developments
- Reforms promoting increased competition and supplier switching in retail energy market
- ‘Big six’ suppliers come under fire for charging high prices in 2013
- Suppliers have announced numerous gas price cuts since 2014 , reflecting falling wholesale costs, cuts to green levies, and increased competition
- Breakdown of average gas and electricity bill
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- Figure 64: Breakdown of average domestic electricity& gas household bill, 2014
- Figure 65: Breakdown of average domestic gas bill, 2014
- Smaller suppliers gaining market share
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- Figure 66: Domestic gas supply market shares in Great Britain, by company 20102015
- Lower prices, customer dissatisfaction with the ‘big six’, and differentiation strategies are driving the growth of small suppliers
- Poor customer service and complaints handling remains an industry-wide issue
- CMA Energy Market Investigation
- Smart Meter Roll-out programme
- Switching rates in the SME sector also set to increase
Centrica/British Gas Trading
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- Company strategy and outlook
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- Figure 67: Financial analysis of Centrica, 2010-14
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- Figure 68: Centrica revenue segmental analysis, 2014
- Focus on innovative Connected Homes Products
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- Figure 69: Financial analysis of British Gas Trading, 2010-14
EDF Energy
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- Figure 70: Financial analysis of EDF Energy, 2010-14
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- Figure 71: EDF Energy revenue segmental analysis, 2014
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NPower
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- Company strategy and outlook
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- Figure 72: Financial analysis of Npower, 2010-14
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- Figure 73: RWE - UK revenue segmental analysis, 2014
E.ON Energy
Ecotricity Group
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- Company strategy
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- Figure 74: Financial analysis of Ecotricity Group, 2011-15
- Company strategy
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- Figure 75: Financial analysis of E.ON Energy Solutions, 2010-14
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- Figure 76: E.ON revenue segmental analysis, 2014
First Utility
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- Company strategy and outlook
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- Figure 77: Financial analysis of First Utility, 2010-14
Future Gas Demand
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- Key points
- The market
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- Figure 78: Forecast UK gas demand, 2016-35
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- Figure 79: Forecast UK gas demand, 2016-35
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- Figure 80: Forecast gas demand, by sector, 2016-35
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- Figure 81: Forecast UK gas demand by sector under “slow progression” scenario, 2016-35
- Figure 82: Forecast UK gas demand by sector under “gone green” scenario, 2016-35
- Figure 83: Forecast UK gas demand by sector under “no progression” scenario, 2016-35
- Figure 84: Forecast UK gas demand by sector under “consumer power” scenario, 2016-35
- Domestic demand
- Industrial/commercial demand
- Power generation demand
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- Figure 85: Forecast power generation installed capacity under “slow progression” scenario, by source, 2015-36
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- Figure 86: Forecast power generation installed capacity under “gone green” scenario, by source, 2015-36
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- Figure 87: Forecast power generation installed capacity under “no progression” scenario, by source, 2015-36
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- Figure 88: Forecast power generation installed capacity under “consumer power” scenario, by source, 2015-36
- Imports
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- Figure 89: Existing UK gas import infrastructure, as of November 2015
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- Figure 90: Proposed UK import projects, as of November 2015
- Exports
Good Energy Group
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- Company strategy
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- Figure 91: Financial analysis of Good Energy Group, 2010-14
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- Figure 92: Turnover analysis of Good Energy Group, by segment, 2012-14
ScottishPower Energy Retail
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- Company strategy & outlook
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- Figure 93: Financial analysis of ScottishPower Energy Retail, 2010-14
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- Figure 94: ScottishPower revenue segmental analysis, 2014
SSE
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- Company strategy and outlook
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- Figure 95: Financial analysis of SSE, 2011-15
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- Figure 96: SSE revenue segmental analysis, 2015
Further Sources & Contacts
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- Trade associations & regulatory bodies
- Trade exhibitions
- Trade magazines
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