The UK Joint Office of Gas Transporters published on Thursday its working group's report on the possible introduction of a single tariff at grid entry and exit points, and will now move to the consultation round.
UK grid operator National Gas and other stakeholders proposed the single tariff system in December. The modification would remove the current rule that splits National Gas Transmission's (NGT) Transmission Services Allowed Revenue (TSAR) 50:50 between entry and exit points, by introducing a single fee charge applicable to all points. This would reduce entry charges and increase exit charges (see table).
Working group sessions were attended by a mix of shipper representatives, gas distribution networks (GDN) representatives, interconnector representatives, power grid operator Neso, energy regulator Ofgem and other interested parties.
The working group agreed that a single tariff system would make the UK gas market more competitive by removing pricing barriers and reducing entry tariff volatility.
There was no consensus that a single tariff would increase security of supply and improve UK grid efficiency, but the group did agree that a single tariff could benefit consumers by possibly lowering energy bills.
The working group recommended proceeding to the next step with the modification proposal — a consultation open until 2 October.
The working group also requested that Ofgem conduct a regulatory impact assessment, especially regarding electricity market effects.
A final report should be available on 7 October, with a panel decision on 16 October. Based on the original proposal, the earliest possible implementation is October 2026, if the modification is approved by April 2026, as transmission tariffs must be published for the following gas year by the end of May.
But some working group participants preferred a mid-year gas distribution network charge change — effective from 1 October 2026 — to align with national transmission system changes and avoid consumer bill shocks. Further co-ordination is needed between NGT and GDNs to minimise volatility and reduce risk, the working group said.
But there was some opposition to the single entry tariff modification.
German gas storage operator Sefe submitted a detailed objection, expressing concern that the single entry tariff system could increase uncertainty and reduce confidence in the UK regulatory landscape, in turn weighing on long-term deals.
Lower entry tariffs will not incentivise capacity bookings, according to Sefe. And they could have a negative impact on firms booking exit capacity, through a significant price increase. Exit users under the single tariff modification would also have to subsidise legacy entry contracts — new existing users already subsidise these contracts.
Similarly, the single entry fee would push up electricity prices and gas costs for the Irish market, the firm said.
Consulting firm CEPA — on behalf of the Interconnector and BBL pipeline operators — presented an analysis at a working group session in March that supported a shift toward a lower entry, higher exit charging structure.
| Grid fees under the single tariff system | p/kWh/d | ||||
| 2024/25 | 2025/26 | 2026/27 | 2027/28 | 2028/29 | |
| Equalised pricing | |||||
| Price | 0.0448 | 0.0482 | 0.0466 | 0.0505 | 0.0507 |
| Entry pc | 23.1pc | 20.6pc | 25.2pc | 22.8pc | 26pc |
| Published tariffs | |||||
| Entry | 0.1308 | 0.1224 | 0.0991 | 0.1141 | 0.0987 |
| Exit | 0.0265 | 0.0311 | 0.0314 | 0.0329 | 0.0344 |
| Modification Report, Workgroup, National Gas | |||||
