Xoserve reacts to Ofgem's RIIO-GD/T3 Final Determinations

RIIO-GD/T3 is the cost control period from 2026-2031, and sets out the investment allowances for gas transmission and network companies.

“The £876.6 million (91% of those proposed within network business plans) investment permitted by the regulator in UK gas infrastructure will help to maintain an efficient, decarbonisation-ready gas system. This increased investment demonstrates our gas networks will continue to contribute to the UK’s future energy needs. As the CEO of National Gas Jon Butterworth commented yesterday, gas is highly likely to be needed in Great Britain’s energy for generations to come, so it is vital to continue the decarbonisation of the gas grid.

“With clarity on hydrogen blending and its role within domestic heating expected in 2026, Xoserve strongly supports Ofgem’s agile regulatory approach, including a range of reopeners to enable decarbonisation investment to implement the UK’s decarbonisation vision.

“As part of our work to enable decarbonisation, Xoserve will support the Department for Energy Security and Net Zero (DESNZ) and Ofgem’s design of a Hydrogen Transport Business Model (HTBM) enabling the transition of natural gas networks to hydrogen and CO2 capture and storage, supporting whole-system thinking with network data from across the UK. On the other hand, the decision to make carbon capture and storage, hydrogen blending and hydrogen heating innovation projects ineligible for Network Innovation Allowance (NIA) funding is a regressive step that will slow progress towards Net Zero. As the future role of gas within the UK energy system becomes more defined and its importance in our future energy needs is recognised, we hope this position will be reviewed.

“However, we welcome the confirmation that innovation in biomethane will remain within the scope of NIA funding. Xoserve strongly believes that biomethane will play a vital role in the decarbonisation of the gas network.

“As the Central Data Service Provider (CDSP) for Britain’s gas market, we are particularly supportive of the maintained network digitalisation and data licence condition, enabling accurate settlements and greater cost efficiency.

“Overall, we are supportive of Ofgem’s vision for the energy future outlined in RIIO-3 and the Xoserve team and I look forward to doing our part to turn this vision into a reality.”