Frequently asked questions

How will this project impact my gas bill?

This project is a proof of concept only and will not change the way you are billed for your gas today. It will explore the potential of different options to update the billing methodology in the future. In the long-term this work could help customers move to a low carbon energy future in the most affordable and practical way.

Are the alternatives to natural gas safe?

All existing and new sources of gas which are delivered to customers’ homes must meet strict safety regulations set out by the HSE in the Gas Safety Management Regulations. This project does not impact those regulations.

How will this project affect the regulations?

This project will not change the gas safety or thermal energy regulations.

Who is Cadent Gas Limited?

Cadent Gas Limited (formerly National Grid Gas Distribution Ltd) is the licensed owner and operator of four of the eight gas distribution networks in Great Britain: East of England, London, North West and West Midlands.

Why is Cadent leading this?

As a gas distribution network owner and operator with over 11 million customers, we are committed to finding the best way for our customers to move to a low carbon energy future in a safe and practical way at least cost.

Our customers have been paying towards the maintenance and updating of the existing gas network for many decades; and we believe it can and should play a vital role in the UK’s energy future by continuing to deliver gas safely and reliably to customers. This project is an important step to help deliver that vision.

Apart from low carbon gases, what other options are available to provide low carbon heat for GB customers?

Recent UK energy policy for decarbonisation has focused on ultimate electrification of heat, combined with increased renewable generation and the use of high-efficiency appliances such as electric heat pumps in homes and businesses.

This raises a number of challenges. Most notably, the need to re-engineer the electricity networks to provide the significant additional system capacity and response capability that would be required to meet the very large diurnal and seasonal swings in heat demand which are currently served by gas. This, together with the need for increased power generation capacity for heat, is why the cost estimates for future electrification of heat to 2050 are so high, at around £300bn.

Read more about low carbon heat alternatives here.

How could Future Billing Methodology help consumers to save money?

The Climate Change Act established a target for the UK to reduce its emissions by at least 80% from 1990 levels by 2050. This means moving to a low carbon energy future. 80% of residential heat emissions come from gas heating, so decarbonisation of heat is vital. However, decarbonisation of energy and heat in particular, will involves changes to the energy network and changes for consumers.

The existing gas distribution networks are a multi-billion pound asset, paid for by gas customers over many decades. These networks are flexible, resilient and are physically capable of transporting low carbon gases to customers.

This project aims to unlock the gas energy billing framework to deliver all safe low carbon gases without needing to add in costly, high carbon treatments. This would maximise use of the existing gas grid to deliver low carbon energy in a way that is convenient for customers, as they could continue to use their existing heating systems into the future.

Continue reading here.

How would different calorific values of gas impact customers’ appliances?

All gas appliances in GB are built to comply with the EU Gas Appliance Directive which will become part of UK law. All sources of gas allowed onto GB transportation networks, including renewable gases such as biomethane, must comply with the Gas Safety (Management) Regulations (GS(M)R), which govern the chemical composition and burn quality of gas. Customers’ appliances should therefore operate safely within the tolerances set under GS(M)R with no alterations required.

If this project moves to implementation in the future, what is the potential for carbon savings from alternatives sources of gas?

An initial analysis of the direct benefits of implementing a Future Billing Methodology arrangement indicate Net Present Value cumulative savings to 2050 in the range of £170m – £300m, with 1-2 million MTCO2e carbon savings from the removal/avoidance of propane enrichment of renewable gases. This analysis was based on two of National Grid’s 2016 Future Energy Scenarios – “Gone Green” and “Slow Progression” (access the Future Energy Scenarios here).

More fundamentally, a CV zone based billing framework would help to unlock the decarbonisation of GB gas distribution networks, by opening the door to all GSMR-compliant gases, including renewable gases from waste and other low carbon gases, such as hydrogen blend. this would bring benefits to gas customers as they would be able to retain their existing heating systems. Greater diversity of gas supply could also result in lower unit costs than would otherwise be the case.

MTCO2e – Metric tonnes of carbon dioxide equivalent. A metric measure used to compare the emissions from different greenhouse gases based upon their global warming potential.

The calorific value (CV) of gas is currently averaged so consumers are all billed in the same way. So, if the calorific values are varied, what impact will this have on a customer’s bill?

The Future Billing Methodology project aims to continue billing gas customers on the energy that they use. Provided the billing mechanism takes proper account of the day-to-day changes in the CV of the gas, the customer should not be adversely impacted.

A customer supplied with a low calorific value gas will consumer a greater metered volume for a fixed energy content.

A customer supplied with a high calorific value gas will consumer a lower metered volume for a fixed energy content.

The end bill for both customers will take account of the energy content (calorific value) and the volume, therefore the charge will be the same for both, for the same energy requirement.

For more detailed FAQs for industry click here.


The NIC04 Future Billing Methodology Project Progress Report 5 is now available. Click here to...

Read more