Consultation response: Gas Transporter Licence
Exemption
The Anaerobic Digestion and Biogas Association (“ADBA”) is the trade association that represents the range of
interests and matters related to the anaerobic digestion of organic materials (“AD”) across the UK, including the
collection of waste for use as feedstock. ADBA understands the complex range of skills required by developers
of new AD plants, from feedstock management through technology to energy production, markets and resource
to land.
The organisation has over 300 members from across the AD industry, including farmers, local authorities, waste
management companies, supermarkets, food processors, plant operators, energy and water companies,
equipment manufacturers and suppliers, consultants, financiers and supporting service companies. Anaerobic
Digestion can make a significant contribution to renewable energy, climate change, and critical resource
preservation targets, subject to the right policies being in place.
Background Notes
ADBA is grateful for the chance to contribute to DECC’s consultation on creating a class exemption for onshore
producers of gas from the gas transporter licence. We believe that this licence exemption will boost the
biomethane to grid sector by removing a regulatory burden, but there remain a number of other regulatory
obstacles to supporting the sector which DECC and Ofgem must address, as set out by the EMIB group in May
2012.
The consultation document notes that all gas produced onshore will still be subject to the Gas Safety
Management Regulations (GSMR) requirements around transporting gas in gas network. While accepting that all
current safety standards should apply to biomethane producers, ADBA believes that the current standard of
0.2% oxygen content is unnecessarily onerous and is a risk factor in holding back biomethane projects. A class
exemption for biomethane producers up to 1% is needed to help make the economic case for biomethane
projects much more viable, while providing no additional safety risk.
Under the gas transporter licence exemption, biomethane producers must still meet the Gas (Calculation of
Thermal Energy) Regulations 1996. ADBA believes that, in line with the EMIB recommendations, these should
also be amended in order to better support biomethane producers.
At present the Regulations require producers to store and transfer large amounts of data to GDN computer
systems. These Regulations were written however on the basis that only GDNs own and operate CV
measurement equipment, and therefore it is not clear whether the Regulations would apply to biomethane
producers if they are considered to own and operate the CV measurement equipment.
Ofgem have indicated that they would envisage biomethane entry points being “directed” sites in that letters of
direction would be issued in accordance with the Regulations. To remove uncertainty for biomethane producers,
ADBA believes that Ofgem and GDN lawyers must resolve the issue of biomethane entry as soon as possible.
DECC should consider amending the Regulations in order to recognise non-GDN ownership of CV measurement
equipment, alongside a reduction in the data requirements.
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Estimates from potential suppliers have shown that compared to a specification that provides core data on a
daily basis in a standard format, the current requirements may add as much as 20% to the cost of an entry
facility.
Consultation Questions
Question 1 - Do you agree that the Government should establish a class exemption in respect of all types of gas
produced onshore?
Yes. This was an important recommendation from the Energy Market Issues for Biomethane Projects Group
report in May 2012, which ADBA fully supports.
As the report outlined, terminal operators operating a pipeline that connects the terminal with the National
Transmission System can receive geographically specific “named exemptions”. ADBA also supports the
assertion that it would be appropriate for biomethane producers operating delivery facilities that connect into the
gas distribution networks to be exempt from the requirement to hold a gas transporter licence.
Given the large number of GDN connected delivery facilities expected in the coming years, ADBA agrees that a
Class Exemption covering all distribution network-connected delivery facilities is a sensible proposal.
Question 2 - Do you think that it is suitable to use this definition of ‘landward’ to ensure that this class exemption
applies only in the instance of people who wish to convey gas that has been produced onshore?
Yes.
Question 3 – Do you agree that every type of onshore gas will be processed by at least one of the ‘gas
processing operations’ before it meets pipes or associated infrastructure operated by a licensed transporter?
Yes – it is possible however that there may be innovation in processes in the future which are not covered by the
current definition of ‘gas processing operations’.
Questions 4-5 – Do you agree that the proposed definitions ensure that the exemption will apply to all forms of
onshore gas production?
Do you think that by defining the length limit in this way, this condition will act as an appropriate safeguard to
ensure that the exemption is not abused?
Yes – in most cases the proposed definitions do make sense.
However, the length limit of 16.043km from a gas processing facility to the pipeline may not be appropriate in the
hypothetical situation where the biogas production facility and the gas processing facility are at different
locations. In this situation we believe that the ‘final’ gas processing operation should be categorised as the ‘gas
processing operation’ rather than the ‘initial’ ‘gas processing operation’.
Question 6 – Do you think that the Gas (Calculation of Thermal Energy) Regulations 1996 should apply to the
exempt pipework, or do you consider that there is enough of a commercial incentive to ensure that gas entering
the network will be accounted for?
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Given the licence exemption requires injection to a licensed transporter; a Network Entry Agreement will require
gas to meet sufficient quality and the energy content requirements of the Gas (Calculation of Thermal Energy)
Regulations, and therefore believe that there is already sufficient incentive and the Gas (Calculation of Thermal
Energy) Regulations should not apply.
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