Who Does What In the Gas Sector?

Stakeholders

The Gas Industry includes a wide range of stakeholders, all playing a specific role in delivering Gas effectively and safely to customers.

But who are these stakeholders, and what do they do?

There are various components that make up this industry, but to begin with, of course there has to be some sort of regulation in place. The Office of Gas and Electricity Markets (Ofgem) regulates the companies which run the gas and electricity networks.
Ofgem is a non-ministerial government department, and are there to ensure energy customers in the UK are protected. As part of their aim to create a greener and fairer energy market, they are trying to make it easier for energy users to switch suppliers and get a better deal. Ofgem also grants Supplier, Shipper and Gas Transporters licences.
(https://www.ofgem.gov.uk/about-us/who-we-are)

Firstly, domestic and/or business consumers (like me and you) will have a contract in place with a gas supplier to provide gas to their premises. We are provided with this Gas through our suppliers, who are responsible for the relationship with the consumer.
Technically your energy supplier is the company that buys the energy on your behalf through the energy market, and bills you for the amount of energy you use. In more detail, Suppliers are responsible for billing, meter reads, meter maintenance and ensuring an appropriate volume of gas is supplied to the consumer. In order to provide this service, it’s important they work closely with meter reading agents, meter asset managers, meter asset providers and shippers.

A meter reading agent stores, maintains and monitors reading related information for gas meter points, however these parties are increasingly using other methods such as using technology to obtain readings via smart meters or advanced metering devices. A meter asset manager is responsible both for installing and maintaining the gas meters, while a meter asset provider is responsible for providing the physical meters to the meter asset managers for installation on consumer premises.

As we know, Smart Meters are a quick and easy way to keep track of your energy spending habits, and allow you to save money by monitoring your energy usage. The way your meter relays you this information is through the DCC (Data Communications Company). The DCC is responsible for creating a new communications infrastructure which links smart meters in homes and small businesses with energy suppliers, network operators and energy service companies. The DCC is needed to ensure the smart metering system as a whole works smoothly, and that you’re getting the full benefits of your Smart Meter.

Now, before the Gas reaches you or your supplier, it needs to be bought from the gas trading market and shipped. Shippers are responsible for purchasing the gas required by the suppliers and for transporting it to the end users. They contract directly with suppliers,
transporters, producers and other shippers to secure and transport the amount of gas they need. This process is governed by the Uniform Network Code (UNC). Ofgem must grant a shipper license before a shipper user can go live.

Moving onto Gas Transporters, Gas Transporters own or operate the gas pipelines that transport gas across the network, and they frequently own and operate Gas Distribution Networks. There are also Independent Gas Transporters, and these types of transporters are directly connected to the Gas Distribution Networks via a Connected System Entry Point. Independent Gas Transporters largely only supply to new housing and commercial developments. Lastly, there is the Gas Trading Market in which wholesale gas is bought and sold, based on what the supplier thinks the consumer demand will be. In the UK, our wholesale gas market involves the buying and selling of natural gas, after it has arrived from offshore production sites. The wholesale gas market in Britain has one price for gas irrespective of where the gas comes from. This is called the National Balancing Point (NBP) and is usually quoted in price per therm of gas.

Governance

There are a number of groups that govern the way stakeholders interact with each other and the arrangements between them. Starting with Xoserve;

Xoserve is central to Britain’s gas distribution market. They are the gas industry’s Central Data Service Provider (CDSP), delivering a full suite of vital services to gas suppliers, shippers and transporters, and ensure that Britain’s retail gas market runs efficiently and reliably for customers. (https://www.xoserve.com/about-us/)

Firstly, we have The Uniform Network Code & IGT Uniform Network Code.
Implemented in May 2007, they oversee practices and arrangements between Shippers and Gas Transporters and Independent Gas Transporters. According to Ofgem, it’s the hub in which the competitive gas industry revolves around, and has a common set of rules which ensure that competition can be facilitated on level terms. It’s there to ensure each party understands their own contractual responsibilities, codes and ways of working.

(https://www.ofgem.gov.uk/licences-industry-codes-and-standards/industry-codes/gascodes/uniform-network-code)

Next we have the Data Services Contract. This governs the way in which Xoserve processes and supplies data to customers across the gas industry. The contract sets out standards and ways of working multiple different activities, including the maintenance of the gas transporters’ supply point register; allocation of gas; calculation of transportation volumes and charges; transportation invoicing; energy balancing credit management and invoicing and cash collection. The Supply Point Administration Agreement (SPAA) governs some of the activities between Suppliers and some interactions with the CDSP and Gas Transporters. It supports effective Supplier operations to meet their obligations under their licences. This, in effect, supports the transfer of consumers from one supplier to another, where a consumer chooses to switch supplier.