Select Committee on Trade and Industry Minutes of Evidence

Examination of Witnesses (Questions 259-264)



  260. What sort of size would those islands be?
  (Ms Brown) We have connected just under 100 homes to gas in Stockton just in small infill projects; and we shall do more. The local authority paid for the connection charges. They will be paying 100,000 for the number of connections we have made. It is not a small investment, but they are replacing electric warm air systems with gas central heating systems and they understand the economics of that.
  (Mr Grant) One of the most surprising outcomes of our study was the proximity of these communities to existing gas mains. There are something like 1,300 within two kilometres of an existing gas main and I have personal experience of attending public meetings when you have communities which are 40 metres away from a gas main and not able to benefit from all the advantages of having gas. As a result of those experiences, we have been advancing a proposition which does not involve Transco. It is outside the regulatory framework. We are trying to advance a model which says target communities for social and environmental reasons. Target communities who could derive the greatest benefit from having gas. We have also gone so far as to develop a methodology which will allow the DTI to rank communities and to determine where their investment would derive the greatest impact. We have gone so far as to do four case studies which have not been based on selecting communities because they are deprived, we selected communities because we have done a detailed cost analysis of what it would cost to connect those communities to the network. Our thinking goes beyond just connecting to the network because we are convinced that gas in all its forms and delivered by all sorts of means has enormous social and environmental potential to contribute to this whole agenda.

  261. Maybe you could send us some more concrete details? Can you give us figures for the cost and timescale involved in extending the gas network?
  (Mr Grant) Wholesale extension of the network is not appropriate. The costs are not as high as people anticipate. You can design a business model which excludes Transco but benefits the independent public gas transporters, utilises self-lay organisations, companies who can construct the pipelines but cannot necessarily operate them. There are clever business models which can be brought to bear to reduce the overall cost. We are very keen to see the pilots go forward because we believe that it is only through those pilots that you can actually test what the price will be.

  262. Would you be able to send us some of the stuff?
  (Mr Grant) Certainly; yes.

  263. That would be helpful. Is the technology reaching the point where LNG could be taken to a distribution hub and a small mini . . . ?
  (Mr Grant) The success of this proposition is not just about taking gas into a community. You can take gas in all forms, you can take it as LNG, you can take it as a gas/air mix, you can take it as LPG, you can utilise local sources of gas, coal-bed methane, you could look at bio-gas in rural environments. There are many opportunities to use gas. The real secret is to come up with a community based solution. In the same way as we are trying to integrate all the solutions in Stockton—as well as doing a systematic assessment of the housing needs we are also trying to integrate the solutions—we have the same opportunity in these communities who are not on gas. It is taking gas, it is providing them with the technology needed, it is insulating the houses, it is providing them with smart metering, it is giving them energy efficiency advice. So you provide the whole package and make a substantial difference and do it in a very efficient and cost effective way because you are doing it as a community.
  (Mr Wybrew) That incidentally gives you the opportunity to pilot the innovative uses of renewables and renewables backed up by electricity or gas. It is around the periphery of the system where there is the greatest opportunity to experiment, looking for new ways of tackling the great conflict between the environmental objectives and energy objectives.

  264. Thank you very much that was very helpful. We were anxious to get people who were active on the ground and in some respects under the ground as well, so we are very grateful to you. We look forward to receiving the additional information.
  (Mr Wybrew) We shall get that to you very rapidly.

  Chairman: That would be very helpful and we are grateful. Thank you very much.


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