Common use of Why Change Clause in Contracts

Why Change. The injection of distributed gas is growing. As at the end of March 2022, 126 DN entry points were registered on Gemini. Xxxxxx Green Gas (BGG) understands that around 15 existing biomethane projects flare gas from time to time because of DNO capacity constraints. BGG has seen an estimate that suggests around half of the currently identified potential new biomethane sites face local grid capacity constraints and, as a result, are unlikely to be developed. This may be exacerbated by high gas prices that can be expected to reduce gas demand, with a consequence being additional flaring of biomethane due to the capacity reduction (biomethane plants cannot be instantaneously turned off and the ability to flare gas is a safety measure to ensure pressure can be relieved). Constraints typically arise in the summer months when demand is low. However, it is possible to export gas from one pipeline pressure tier (e.g. Medium Pressure) to a higher one (e.g. Intermediate Pressure). This increases the ability of a DNO to accept gas, with higher pressure tiers able to more easily accommodate additional gas as it provides access to more widespread sources of demand. The ability of Reverse Compression to increase the capacity available to accommodate distributed gas is established in Europe, for example with over 30 projects in France. Cadent are completing the first such project in GB at a site near Doncaster, funded by Ofgem NIC. All the DNOs are proposing to offer reverse compression within their networks as an option, with discussions underway in an entry connections forum. Distributed gas producers, however, are interested in arranging this for themselves, and a number of such projects are being actively pursued. This Modification was initially brought forward to ensure a level playing field such that private sector investment in reverse compression could compete with DNO investment. However, legal advice from the DNOs is that any pipeline installed to deliver reverse compression would have to be subject to a GT licence. The UNC is silent on the concept of an IGT that supports gas being injected to as well as receiving it from a DNO, and does not envisage reverse compression via an IGT system. This Modification is, therefore, proposed to address this and provide clarity about the requirements when gas originally taken from a DNO can flow back from the IGT to the DNO.