Information for the gas industry

How do we work together to deliver the most affordable and practical low carbon energy future for customers?

Low carbon gases delivered through the existing distribution network offer great potential to help customers move to a low carbon energy future in a least cost way. Working together to deliver this vision, making sure all parts of the market are ready to support this, is a vital part of the journey.

Working with you

Future Billing Methodology is an explorative project run by Cadent (formerly) National Grid Gas Distribution Ltd and our project partners DNV GL. It will look at a range of different future options for gas billing. We want to work with you to find the best of these options, and recommend a new billing framework which would allow alternative gases to be injected into the network without the need for pre-processing.

Our vision

What gas billing looks like today.
Market struggles to support diversity of gas.

Narrow CV tolerance in each Local Distribution Zone.

Producers of low CV gas must add propane – a costly greenhouse gas – to hit target CV.

Customers billed on an average CV.

What gas billing could look like in the future.
Market optimised for diverse gas sources.

Smaller CV zones within Gas Distribution Networks.

No need for gas enrichment.

Unlocks full potential to deliver lower carbon gases via existing gas networks in a low-carbon future.

Customers billed on CV of gas they receive.

Our approach

We will be looking at

Ways to attribute the calorific value (CV) of gas from its physical input source on the local distribution zone (LDZ) network to the customer in a more specific way.

Installing of sensors and flow monitoring for network model assessment.

Potential smart metering and data flow solutions.

Flow-weighted average CV attribution

CV is currently defined in the Thermal Energy Regulations. The CV measurement is taken at source, using gas sampling. The assumption that underlies this is that different sources of gas co-mingle in ‘Charging Areas’ where there is multi-sourcing – a Local Distribution Zone (LDZ).

Local Distribution Zones: zones of influence

LDZs usually have multiple gas input sources. However, in reality the gas from these sources doesn’t really mix, except where two gas sources meet.

This LDZ FWA CV is then capped at 1 MJ/m3 above the lowest gas source. However, there is no lower threshold on the volume of the lowest source. So, a very small amount of low CV gas, such as bio-methane, can cap an entire LDZ. This creates a significant amount of unbilled gas energy, which becomes a transfer cost to NTS* shrinkage. As a result, enrichment with high carbon propane is mandated in NEAs* for bio-methane sites.

Each input point on the LDZ actually has its own ‘zone of influence’ across the pipeline networks that make up the LDZ. These vary with the system conditions. Our premise is that if these zones can be defined more specifically, then customers in each zone could be billed more in line with the actual CV of the gas they receive.

Exploring a range of options


This option uses network modelling to create embedded CV zones, or ‘charging areas’ for each embedded input point within the LDZ. Customers in the embedded charging zones will be billed based on the Ofgem directed CV measurement of the relevant embedded input point. Elsewhere, the current FWA CV method is retained for billing purposes.


This option would create a CV zone or ‘charging area’ for each input point on the LDZ. It would require additional CV measurement points within the network.


This option will use the data generated in the field measurement exercise. This data will enable live CVs to be transmitted to smart meters in simulated network locations, using a stand-alone smart-meter simulation facility.  This will help develop an understanding of the data hierarchy that will be required in a wholly smart-metered future.  This could be a ‘pre-stage’ for energy measurement at the smart meter itself.

Project Timeline


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

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