Reflections on 2023

Well, this was certainly a year to remember - 2023 started with a new business about to be born. Following a 10-month purchase approval process, signatures on 31 January confirmed the transfer of our company’s ownership from National Grid to our new majority stake owner - a consortium comprising Macquarie Asset Management and British Columbia Investment Management Corporation. The transfer represented a significant investment and a vote of confidence that National Gas will play a leading role in the UK's energy transition through its three constituent parts – National Gas Transmission, National Gas Metering and National Gas Services.

It was also a tribute to our employees who played their full part in ensuring that the change ran as smoothly as possible.

So in February, we launched the business with a celebration across our operational and office sites, a parliamentary drop-in event and a whole host of briefings with our customers, political decision-makers and other key stakeholders. It was incredibly exciting to mark a truly historic day for the gas industry and to introduce a new organisation that sits at the heart of our energy landscape.

This year, gas has provided more than 30% of Britain’s electricity across the equivalent of 193 days, as well as keeping around 500,000 businesses running and heating over 80% of homes. This represents a Herculean effort from our teams across Britain, from St Fergus in north east Scotland to Felindre in south Wales and Lockerley in Hampshire, as they keep our operations running in partnership with our gas National Control Centre in Warwick.

Of course, the new business was formed in the midst of some challenging circumstances. During the winter, National Gas exported massive and unprecedented volumes of gas to north western Europe through our Bacton Gas Terminal, totalling 7.6 billion cubic metres, as we met the energy challenge presented by Russia’s illegal invasion of Ukraine and the resulting volatility in wholesale gas markets across the world.

However, the focus of National Gas is just as much on our clean energy future as it is on our role securing resilience for natural gas supplies. In March we saw one of many endorsements for our hydrogen programme during the year – a set of ambitious but practical projects including FutureGrid in Cumbria, Britain’s first hydrogen transmission test site; and Project Union, a flagship programme which will connect supply to demand via largely repurposed pipelines. The Climate Change Committee report, Delivering a reliable decarbonised power system, sharpened the focus on ensuring that households and businesses benefit from rapid, good-value progress towards clean power.

I couldn’t have put the case any better when the report landed, saying: “It is not sensible to delay all decisions on hydrogen infrastructure until after decisions on the use of hydrogen for heating. Development of hydrogen infrastructure must be initiated sooner, pursuing investments considered low-regret given the need for hydrogen in the electricity system, and in industry.” We continue to view Project Union as such a project of national importance.

A highlight in April was our participation in the Ostend Declaration at the North Sea Summit between the nine gas TSOs (Transmission System Operators) in north-west European countries. This was part of the North Sea Summit attended by the then DESNZ Secretary of State Grant Shapps MP and his EU counterparts. One result of implementation could be enabling inter-operability between the developing hydrogen networks on each side of the North Sea, something which we committed to publicly when we signed a Memorandum of Understanding with our counterparts in Belgium, Fluxys.

In May, among the celebrations of the King’s Coronation, we had our own cause to celebrate - Ofgem approved funding during the spring for Project Union, which will support further feasibility work over the next 12 months on our proposed 2,000km hydrogen transmission network. The decision was just reward for the expertise and persistence of our innovation teams who have worked relentlessly to prove the need for, and benefits from, the project.

In the same month, our colleagues in National Gas Metering officially ranked?7th?among medium-sized organisations in the UK as a great place to work for women - following an independent survey measuring how colleagues felt about their workplace experience and how well represented they are in the workforce and management. It was much-deserved recognition for the hard work that the business has put into creating an ethos of trust, care and agility which guides us in all that we do.

It was a pleasure in June to launch the other critical business in National Gas when we rebranded the former Pipelines Maintenance Centre - known as PMC to many - as National Gas Services.

The rebrand marks far more than a change of name, and signals the beginning of a strategy which will see National Gas Services develop its position as a world leader in high-end technical pipeline maintenance. We welcomed guests across the industry and local MP Nigel Mills to Ambergate in Derbyshire, which will become the main hub for this important operation carrying out invaluable work in ensuring consistent and reliable supplies of gas across Britain and beyond.

While July and August are times when we see relatively low gas demand, it was one of the busiest times we’ve seen for our field employees. They carried out the largest transmission maintenance period we have ever seen, adding much needed resilience ahead of the current winter. We used more historical operational data to allow greater access to the network throughout summer and enable us to carry out 23 network isolations and three pressure restrictions for various improvements to asset health, as well as 18 station outages to help improve our asset reliability, and commissioning new compression units at Peterborough and Huntingdon.

It was also a pleasure in August to welcome Energy Minister Lord Callanan to our National Control Centre, the nerve centre of our National Transmission System in Warwick, to see first-hand how we deliver the safe and reliable transportation of gas from beach to meter, ensuring we keep the lights on and businesses running across our country.

September saw the publication of our Gas Winter Outlook, probably our most widely read publication during any given year – but particularly in the past two years. We continue to closely monitor the market: despite healthy winter gas stocks in the UK and continental Europe, this could again be a challenging winter for energy supply. Factors beyond our control such as the weather, global market developments and the wholesale cost of gas will all influence the prevailing gas supply and demand situation in Britain, and we always remain prepared to respond.

We ensured a strong presence at both the main political party conferences in October, hosting meetings, talking to Ministers, opposition frontbenchers including Shadow Chancellor Rachel Reeves MP and a wide range of other MPs and councillors, as well as co-hosting an exhibition stand on our hydrogen future with participants from across the industry. Later that month, we welcomed the National Infrastructure Commission’s recommendation to create a national hydrogen network, which will connect major industrial centres like the Humber and keep the lights on through gas power stations converting to hydrogen.

A highlight for our political engagement came in November when welcoming the Prime Minister Rishi Sunak MP to our gas terminal in Bacton, a jewel in the crown of our interconnection with the Belgian and Dutch energy systems.

The Prime Minister described Bacton to me as "a hidden hero of energy resilience" - a testament to the endeavour of our Operations teams across the country.

Meanwhile, our colleagues in National Gas Metering received news that they once again achieved accreditation as a “Great Place to Work” by the leading authority on workplace culture, following an independent survey of Metering colleagues. They are extending our expertise beyond natural gas metering to hydrogen, and aim to support any business wanting to make the transition. Customers will need highly accurate metering equipment when they come to connect, and the Metering team is ready to help the Britain’s businesses and industry make the change.

December has continued to be a busy time for us, signing the previously mentioned agreement with Fluxys, celebrating FutureGrid’s award as Project of the Year, and working through an array of government announcements on hydrogen which were published last week. While it’s great to see their indicative positive response on blending hydrogen locally, we now look to national transmission too. We were pleased to host Ofgem at FutureGrid and I am delighted that this month we reached a 2% hydrogen blend at the site. Approval to blend in transmission would be the first step in a longer-term plan to develop a hydrogen backbone for Great Britain, which is why we are urging the government to set out a realistic, practical timeline for decisions on transmission blending in early 2024.

As we reach the end of 2023, we continue to make progress on both our energy system today and our energy future. We remain committed to our work to improve Britain’s energy resilience; we continue to develop our hydrogen programme, including FutureGrid and Project Union, and the government continues to support the need for an integrated core hydrogen network; and in the coming year we will work with Ofgem through the next price control which will take us into the early 2030s.

Throughout 2023, I have been impressed by the passion, innovation, teamwork and sense of ownership among our people. They are contributing towards energy security now and a net zero future - we are leading a clean energy future for everyone.

And so it is with a feeling of great pride that I thank my 2,000 colleagues across National Gas for embracing so many changes and yet continuing to deliver exemplary service in such a challenging year. They are among a select few in Britain - the over 20,000 people working across the gas industry during the festive season who can say they kept the gas flowing and the lights on.

I wish you all, and your friends and families, an enjoyable Christmas and a Happy New Year. Thank you for your support across National Gas throughout 2023, and we look forward to the many opportunities which 2024 shall bring.