Shaping the future of the Gas Transmission Network

Network Output Measures

Working with Ofgem, we have been developing a new methodology to value the risk and performance levels of our network. In developing our approach we have additional capability that allows us to consider the balance between risk and the cost to achieve the level of performance required in financial terms, i.e. monetised risk. This will help us plan Asset Health work in an efficient way reducing impact on customers.

Please find below our new Network Output Measures (NOMs) Methodology.

These documents describe our new methodology, that in our role as holder of the Gas Transporter Licence in respect of the NTS, has been developed to meet the requirements of Special Condition 7D (Methodology for Network Output Measures).

There are five documents presented in total. These explain our proposed NOMs Methodology at increasing levels of detail.

Summary Document 

  • A high level overview of the proposed NGGT Network Output Measures reporting Methodology

Main Methodology Document 

 

  • A detailed account of the methodology
  • Outlines the Monetised Risk model for our Pipelines and Site assets. Introduces the concepts of:
      - Probability of Failure
      - Consequence of Failure
      - Service Risk
  • Explains the principles of future NOMs reporting and governance of the new NOMs Methodology
  • Explains how the principles of Monetised Risk will be used to plan and optimise our RIIO-GT2 investment plan

Probability of Failure Supporting Document 

 

  • Gives greater detail as to how the Probability of Failure is estimated for Pipelines and Sites assets
  • Explains the reference sources and assumptions required to estimate the probability of asset failure, both now and in the future
  • Documents the key assumptions applied

Consequence of Failure Supporting Document 

 

  • Gives greater detail as to how the Consequence of Failure is estimated for Pipelines and Sites assets
  • Explains the reference sources and assumptions required to estimate the consequences of asset failure, both now and in the future
  • Documents the key assumptions applied

Service Risk Framework Supporting Document 

 

  • Explains the elements of service risk modelled within the Methodology and how these can be used to demonstrate to customers the benefits delivered by investment in Monetised Risk terms
  • Shows how both the private (internal) and societal (external) costs of asset failure are used in the Methodology
  • Provides sources of data used for all societal (external) valuations of the risks associated with asset failure, such as the value of a loss of life and carbon emissions
  • Documents the key assumptions applied

Ouputs of our engagement to date

  • Summary of the questions and answers from our engagement with stakeholders

Public Consultation Stakeholder Feedback

A total of three responses were received on our proposed NOMs Methodology during the public consultation which provided both supporting commentary and useful recommendations. We wish to express our gratitude to these companies and the individuals involved for taking time to review and respond to our proposals. Recommendations that related to RIIO-GT2 shall be considered as part of our RIIO-GT2 plan build and subsequent price control submission. Should you wish to review the responses provided in full these are available below:

 

As we develop our plans for RIIO-T2 we need to understand our customer requirements. This is the start of the journey so that we can build plans that take into account customer requirements.

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