Planning for our shared futurePreparing our five year business plan for 2021-2026sgnfuture.co.uk1Planning for our shared futureContents An introduction from our CEO 2 Listening to our customers 3 The challenges ahead 4 Our three commitments Delivering a safe and efficient service What we’ve heard from customers and others 5 Our progress so far 6 Meeting the challenges ahead 8 Building a shared future What we’ve heard from customers and others 9 Our progress so far 10 Exploring pathways to decarbonise heat 11 Meeting the challenges ahead 12 Making a positive impact What we’ve heard from customers and others 13 Our progress so far 14 Building excellent services for all 15 Meeting the challenges ahead 16 Developing our detailed plan for RIIO-GD2 17 What do you think? Your invitation to get involved 18 Contact us Back page123We’re regulated by Ofgem to run the networks across all of Scotland and in south east England, as indicated on the map. We’re also responsible for a gas network in Northern Ireland which isn’t regulated by Ofgem and not included in this document.Our cover photo: We’re replacing two 1970’s high pressure gas pipelines supplying Glasgow, suspended beneath the historic Erskine Bridge, with a new 450mm diameter and 2KM long pipe crossing under the Clyde riverbed. Our engineers worked with partners and local community groups to design the right solution, managing a diverse and complex set of natural and man-made obstacles. These included the ancient and protected Antonine Wall, Glasgow to Helensburgh Railway, the Forth and Clyde Canal, complex geological features, a nature reserve and a golf course.We provide over 14 million people in homes and businesses across Scotland and southern England with warmth; safely, reliably and efficiently. We manage the networks that distribute natural and green gas to regions that include some of the most densely populated and most remote parts of the country. As we develop our next five-year plan covering 2021-2026, we want to be certain that our approach and priorities are in line with the needs and expectations of our current and future customers. We’ve identified three big themes – our commitments – to make sure we deliver a service that’s safe and efficient, fit for our shared future, and that we’re making a positive impact on the lives of our customers and their communities. In each case our ambition is to understand and deliver the activity, service and standards that customers want and are prepared to pay for.I’m sincerely grateful to the many thousands of individuals who over the last year have told us what they think we need to do. We’ll continue our engagement through 2019 as we develop the necessary detail to finalise our plan. If you’re reading this you’ve already confirmed your interest. So please read through the rest of this document and join the conversation about our future plan, using the contact information provided at the end. We look forward to hearing from you. SGN in numbers 2Planning for our shared future5.9m customer meter points (4.1m south and 1.8m Scotland)74,000km of pipes (49km Southern and 25km Scotland)24,688 fuel poor homes connected since 2013Attending 220,000 gas emergencies each yearCovering 40% of the UK’s land mass500,000 home visits annuallyServing 14 million people (28% of all UK gas users)SGN provides WarmthSafely, reliably and efficientlyJohn Morea CEOMarch 20193Overall, seven customer priorities emerged:Keeping the gas flowing Using innovative methods to undertake gas works with as little disruption as possible and improving the resilience of the gas networkActing safely Keeping our customers, employees, contractors and the public safe; responding to gas escapes quickly; and repairing and upgrading pipes to make them safer Keeping costs down Investing in innovation to improve efficiency and reduce the cost of gas suppliesDelivering energy solutions for the future Exploring the use of alternative ‘green’ gases such as biomethane and hydrogen Minimising environmental impactReducing carbon emissions and waste and increasing energy efficiencyProviding excellent service Responding promptly to customer enquiries and planning projects effectively to keep customers informed and inconvenience minimisedSupporting those who need it most in the community Providing free gas connections to low income households and offering extra support services to potentially vulnerable customersListening to our customersWe put the interests of our customers at the heart of our business, listening to what’s important to them and understanding what they expect from us. Last year we met or collected input from over 12,500 customers and stakeholders who told us what mattered to them and where they wanted us to invest and we’re not stopping there. We’d like you to tell us what you think. 1 | Delivering a safe and efficient serviceOur first commitment and our highest priority is to deliver a safe and efficient service. Being efficient keeps bills down for our customers, and our relentless focus on safety makes sure we’re keeping everybody safe and the gas flowing. These considerations are top of the list of what our customers want.3 | Making a positive impactOur third commitment is linked to our pride in delivering a public service. We’re proud to be making a positive impact on society: reducing fuel poverty, providing excellent service to all our customers and supporting those in vulnerable circumstances. 2 | Building a shared futureWe must keep longer term goals in mind to stay focused on building our shared future, our second commitment. The UK faces the challenge and responsibility of reducing carbon emissions to meet climate change targets by 2050. We want to play our part in meeting this challenge, and our customers tell us they expect us to take a leading role on decarbonising heat, re-designing our networks to deliver clean gas, and defining the broader role of gas networks in a future, low carbon economy.Planning for our shared futureSafe and efficient:A shared future:Positive impact:Keeping the gas flowing | Acting safely | Keeping costs downFuture energy solutions | Minimising environmental impactProviding excellent service | Supporting our communitiesOur response: three commitments at the heart of our plan 4Planning for our shared futureThanks to improved efficiency and innovation, we expect to have reduced our impact on customers’ bills by 8% from 2013 to April 2021. We returned £145m to customers at the end of 2017, reflecting the significant progress we’ve made with our processes, operations and efficiencies over the last five years. We’ve consistently been the best performing gas network operator over the course of this current price control period, delivering greater benefits to customers than any other network. We’ve split the value of these benefits with customers, so when combined with the voluntary contribution we made in 2017, we’ll be giving back approximately half directly to our customers.One of the greatest challenges we face is keeping energy affordableMaintaining safety Safety standards are first and foremost in everything we doIncreasing customer expectationsExcellent performance in the future needs to be better than our current award-winning service Security We must respond to threats to our physical and cyber infrastructure which continue to evolve The environmental impact of our business We must manage and minimise the environmental impact of our daily operations Congestion and local air pollution We need to find ways to minimise the detrimental impact of our roadworks and our own fleetSupply to remote communities Connecting off-grid communities to the network Cost and affordabilityWe need to try and offset rising material and labour costs by efficiency without compromising safety or performance Employment Our industry has an ageing workforce: we need to respond to a challenging skills environmentDecarbonising heat Our industry must agree a clear path to removing carbon from energy to meet Government emissions targets ResilienceManaging an increase in extreme weather requires additional resources to maintain a reliable serviceThe challenges aheadOur networks must respond to multiple challenges over the five-year period covered by our plan Challenges includeOur work to support preparation for the High Speed 2 (HS2) rail link at Steeple Claydon in Buckinghamshire51Being world classEnergy affordability remains a priority issue for every UK energy customer and we’re playing our part in keeping overall energy costs down. We will not compromise on safety, and our duty to keep our service safe goes hand-in-hand with our opportunity to improve efficiency. What we’ve heard from customers and stakeholdersWe’ve identified three customer priority areas that support this commitment• Ensure gas supplies are reliable eg by preventing leaks, upgrading pipes and equipment• Reduce operating costs and pass back savings to customers, either in their bill or by providing a better service • Help and support customers to reduce the amount of energy they use• Invest in projects which might cost more short-term but save money over the long-term• Utilise the latest technology to become more efficient (eg robotics for gas repairs)• Reduce the amount of roadworks to minimise disruption for road usersWhat customers told usActing safely Keeping the gas flowingKeeping costs down Customer priority areasDelivering a safe and efficient servicePlanning for our shared futureUsing CISBOT: robotic technology to repair pipes under Edinburgh’s George Street6Planning for our shared futureBuilding resilienceOne of the great unknowns is the British weather, so our plan should ensure we can effectively deal with the harshest of weather and keep the gas flowing safely. Storms like 2018’s ‘Beast from the East’ tested us, but our investment in preparation and resilience meant we didn’t let customers down. Climate change could mean those ‘one in twenty-year’ winter events happen a little more frequently.Keeping costs down Our operating costs are 27% down on our planned expenditure, driven largely by improved productivity and efficiency. We’ll work hard at maintaining these levels of performance, but new cost pressures may start to offset some of the positive trends.Improving our technologyInterruptions to customers’ supplies have fallen by 21% over the last five years. Investments we’ve made in improved technology in our planning and operational practices have helped minimise disruptions caused by our planned replacement work. Our progress so farInterruptions to customers’ supplies have fallen by 21% over the last five years We were the first gas network to introduce CISBOT robotic technology to the UKCISBOT is a remotely operated robotic device that allows us to repair leaking joints without digging up the roads or turning off the flow of gas. That means increased reliability, reduced disruption for road users, much lower environmental impact and significant cost savings.And we were the first gas utility to apply data mining techniques that allows us to accurately target the pipes that pose the greatest risk. Using CISBOT to repair weak spots, we’ve been able to increase the life of some of our old iron pipes which were previously earmarked for replacement.CISBOT projects 2017/18Reduction in costReduction in time takenReduction in excavations15.9km of gas mains£4.4m56%531The increased frequency of adverse weather makes planning and resourcing our ‘first response’ teams a little tougherOur 3 commitments in detail 7Managing cyber threats and improving our securityThe UK’s National Crime Agency (NCA) remains concerned about the threat of cyber-attack and data loss. Such an attack could mean significant disruption for our customers so we’re continually reviewing and evolving our capability.We’ve taken several important measures to strengthen our resilience to cyber risk. These include significantly raising the profile of cyber security to all employees, and achieving Cyber Essentials Plus accreditation, a government security scheme for UK industry to help protect against cyber-attacks. Operating safely and reliablyOne of the biggest risks to gas pipes is accidental damage. We were receiving around 2,500 enquiries a month from people wanting to excavate near or around our pipes. They included farmers, civil engineers, contractors and construction company employees whose work can bring them into contact with our network. Since introducing a new online mapping and self-service enquiry system, we now receive over 47,000 enquiries a month, and our response time is just two minutes each enquiry. Accidental damage to our network has reduced year-on-year by 17% in our southern region, and by almost 20% in Scotland. These reductions translate to significant savings on repair costs, as well as reducing risk and helping to protect the reliability of the gas supply. Investing in future safetyWe’ve developed our first damage prevention safety-training module, for students and staff at Scotland’s Rural College (SRUC). We’re currently working with course leaders to embed our content within the wider health and safety module for all incoming students and modern apprentices, the SRUC’s own agricultural consultants and its properties and estate personnel.We’re actively planning the rollout of the course in all relevant colleges across the UK. That means more people working on the land will have greater awareness and ability to manage the risk of working near gas pipes.Planning for our shared futureYear-on-yearreduced byYear-on-yearreduced bySouthernScotland17%20%Accidental damage to our networkSGN’s technology teams beat stiff competition at the 2018 UK IT Industry Awards, winning the Cyber-security Project of the Year and being highly commended in two other categoriesWe’re working hard to make sure people working the land can manage the risk of coming into contact with our gas pipes8Planning for our shared futureWe’ll continue to operate a safe and reliable network that efficiently delivers the services that our customers want. That means responding to new challenges around climate change, resourcing, emerging risk and changing security requirements.Delivering additional or alternative services to address these challenges - and those relating to our two other commitments - would increase our costs, and therefore increase the amount of money that is charged to customer bills. The average customer is currently charged £136 a year for our network of pipes that connects them to their gas supply. This charge is included in the overall bill that customers pay to their energy supplier. We would like to understand whether customers would value these or other additional services that we could provide, which may increase their bills by a small amount each year.Ideas we would like your feedback on: Alternative heating or cooking options in high rise buildings: We serve a large number of customers in high rise and multi-occupancy buildings. The network supplying these properties includes the “riser” – the main pipe taking gas up through the floors to join with the smaller pipes that connect to the homes on each level. These risers can be expensive to maintain and replacement at the end of their lives can be complex and result in lengthy disruption to supply. As an alternative, we could work with energy partners to install permanent heating and cooking facilities in each home that do not require a gas riser. The cost saved by not repairing the riser would be put towards the alternative heating solution, in agreement with the customer.Additional investment in maintaining reliability through managing environmental changes: Our weather is getting hotter. Or colder. Or wetter, or drier! Thanks to climate change, we no longer know with the same measure of certainty what our climate will throw at us. But any one of these climate scenarios would have implications for our network. We’ve established a reliable process to identify when we think the risk of failure from environmental changes would have significantly greater social impact than is currently recognised through our traditional approach to risk assessment. We would like to bring forward some planned activity and make additional interventions when it becomes clear that there is a high social cost of a potential failure of a part of our network infrastructure.Meeting the challenges ahead Safe and efficientThe Personal Atmosphere Monitor (PAM) instantly alerts the wearer to a local gas or carbon monoxide riskOur 3 commitments in detail Next >