UK Gas: what remains to be planned?
John Elkins

Liberalisation has inevitably diffused responsibility for marketing, planning and operating distribution and transmission systems. It has also diffused knowledge, data and forecasts. The most precise data about customer behaviour now resides with National Grid (NG), which does not deal directly with most customers, except to record their usage. Modelling of past gas flows and short term forecasting of most customer demands is carried out by NG as the agent for distribution grid operators and marketers. It also produces forecasts of demand and supply based on aggregates of marketer/shipper intentions so that it can propose, and agree with Ofgem, changes in transmission system capacity. Development of storage and importation capacity is the responsibility of whoever wants to plan it.

Because gas is an essential commodity, it can be argued that there is still a need for central oversight, which can only logically be supplied by National Grid/Ofgem, but this goes against the principle of market-determined outcomes to which all governments and regulators have devoted their efforts over past 20 years. Is it time to recognise that without some degree of long term planning, roughly half of the UK’s energy supplies will be exposed to very significant risks with potentially highly undesirable results?

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