The changing environment within the gas industry
A Transco case study

Page 1: Introduction

Gas is the carefully controlled source of nearly half of the country’s energy needs. And most of that gas is transported safely and reliably by a British company - Transco. All day, every day, sophisticated computer-based telemetry watches, records and reports as the gas goes through meters, compressors, valves and governors on its way to more than 20 million homes, factories and businesses...
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Page 2: The changing environment

Few organisations exist within a market that changes almost by the hour. Transco is able to cope with changes in demand - and this is largely because its forecasting of gas demand is accurate. It is a complicated process, taking account of all aspects of the weather and the hourly gas demands of consumers. Demand forecasts are made four times a day, but more may be made if the weather forecast...
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Page 3: Pricing and competition

Transco’s revenues are earned within a price control linked to the rate of inflation and modified by an efficiency factor decided by the regulator who controls Transco’s revenues. The formula - RPI-X - was introduced in the mid-80s. That type of control and the regulation of profits in general was seen as a temporary means of ‘holding the fort’ until competition arrived...
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Page 4: From a nationalised industry to public gas transporter

1965 In the same year that The Beatles received their MBEs, the nationalised Gas Council rebuilt and modernised the UK’s gas industry. The energy map of Britain was drastically redrawn with the discovery in the North Sea of high quality gas reserves that would provide supplies for the foreseeable future. Coal and oil gasification plants become virtually obsolete. 1967-1977 In the decade that...
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Page 5: Controlled all the way to the door

Transco’s national control centre at Hinckley, Leicestershire, monitors and controls the flow of gas through the network, operating compressor stations and flow control valves to ensure the optimum supply of gas to Transco’s local distribution zones, power stations, and other large gas users. Every minute of every day, 44,000 telemetered items, such as pressures and flow rates, are...
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Page 6: A matter of branding

The gas industry has undergone enormous change in recent years. The monopoly of the former British Gas has been broken. Instead of being restricted to one supplier, all gas consumers can choose from a number of companies from whom to buy their gas. With so much change, there is understandably some confusion in the public mind as to who does what within the industry. Some people find it hard to...
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Related: Travis Perkins
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