Agenda item

Deputation - To receive Mr C Gray and Mr D Butler, SGN Natural Gas Network to Present Future Gas Network Plans in Strabane


The Committee received Mr C Gray and Mr D Butler, SGN Natural Gas who gave a joint presentation on SGN Natural Gas Future Gas Network Plans in Strabane which highlighted the following:


Project Timelines


January 2017 – January 2019


SGN Natural Gas Network


The role of SGN Natural Gas is to bring natural gas to homes and businesses I the Western area of Northern Ireland.


Key Aims:


-      To effectively tackle fuel poverty in our network area

-      Significantly reduce the carbon footprint of our customers

-      Enable businesses to drive efficiency savings, making them more competitive in global markets


Fuel Poverty in the Region


Living in a cold damp home often directly causes poor health and well-being and can be a contributing factor to a specific conditions such as:


-      Stroke

-      Coronary heart disease

-      Asthma

-      Respiratory illness

-      Compromised mental health


Every year in Northern Ireland there are around 800 excess winter deaths as a direct result of the cold, with many more becoming ill.


In Northern Ireland oil is the most common home heating fuel.  Around 68% of households use oil and this rises to over 80% of households in rural areas.  This over-dependence on one unregulated fuel means fuel poverty initiatives in Northern Ireland need to address a unique set of challenges which may not be as prevalent elsewhere.


Tackling fuel poverty is a key consideration for our project.  We are committed to having a positive impact on tackling the levels of fuel in Strabane and throughout the rest of our network area.


The average rate of fuel poverty in Northern Ireland is 42%.


In the Strabane area the rate of fuel poverty is 52-56.


Natural gas will give consumers an alternative choice to traditional home heating fuel methods.   A key benefit of natural gas is the ability to top up a prepay meter from as little as £5.  Homes also have the option to pay their bill through direct debit ensuring flexibility for all customers based on their preference.


Reducing our Carbon Footprint


Enabling Business to thrive


Businesses in the Western area of Northern Ireland will benefit greatly from the arrival of natural gas.


Construction Update


Distribution pipeline construction


Educating our Children on Natural Gas Safety


Key Facts on Natural Gas in Strabane


-      We launched a NISEP ‘Warm at Home Scheme’ in Strabane in Summer 2018, this was hugely successful and oversubscribed within 12 weeks from launch.

-      By Q2 2020 over 3,000 homes in Strabane would have access to natural gas.

-      There are currently over 400 homes connected to natural gas in Strabane (136 of which are Housing Executive).

-      Over 105KM of distribution pipeline in the ground throughout our network area (in addition to the over 200km of IP and HP pipelines).


We are committed to supporting the towns we serve


Positive Engagement is Key


The Chairperson thanked the deputation for their presentation and commended them on its content.  Members then raised the following issues:


-      Welcomed the scheme particularly in regards to addressing fuel poverty and reducing the carbon footprint, and the additional choice now being offered to residents of Strabane.

-      Acknowledged fluctuations in fuel prices and welcomed the choice now available.

-      Enquired if any decision to extend the gas pipeline to more rural parts would be based on solely cost effectiveness.

-      Welcomed the increasing numbers opting for Natural Gas.

-      Referred to the benefits to be derived from gas in more extreme rural parts given the currently levels of fuel poverty existing there.

-      Enquired if residents in social housing who had converted to gas had been given a choice.

-      Sought quantitative data regarding the 130 properties who had switched to gas fuel in terms of fuel costs incurred by them during the previous twelve months.

-      Enquired as to the criteria in regard to eligibility of the Warm Home Scheme.

-      Acknowledged the benefits to be derived from the scheme by local businesses.

-      Queried if domestic demand was apparent which would create a public anchor tenant, if it would justify the extension of the scheme to more remote rural areas.


The representatives responded as follows:


-      Explained that the Company’s first focus was to extend the pipeline to main urban areas.

-      Referred to the possible involvement of the utility regulator and other external agencies in regards to the extension of the gas pipeline to more sparse rural areas.

-      Advised that the pipeline had been extended to Artigarvan which was a relatively rural.

-      Referred to the significant costs involved in extending the scheme to more rural areas which would require investigation.

-      Reiterated the need for the utility regulator to be involved with any extension of the pipeline to more remote rural areas.

-      Referred to the significant differences in regards to fuel provision and gas in terms of East and West.

-      Explained that the Company’s current focus was to deliver natural gas to City Centres and 40km of pipeline had been already laid in order to achieve this.

-      The extension of the gas pipeline to more remote rural areas was not a short-term objective.

-      Referred to the need to carry out an evaluation of SGN’s role in terms of cost.

-      Explained that SGN were responsible for the installation of the pipeline and not the supply of gas.

-      Confirmed that all consumers both those residing in social and private housing were provided with a choice in regards fuel conversion.  However, not every household had decided to convert to gas.

-      Referred to the role of Bryson Energy in ensuring that consumers made an informed decision.

-      Referred to the online consumer cost conversion calculator service which provided an accurate calculation of the cost involved in fuel conversion.

-      Referred to the number of registered gas suppliers and variations which existed in regards to fuel conversion based on the make-up of individual properties.

-      Pointed out that whilst the NISEP Scheme had now closed as it had reached capacity, SNG would continue to endeavour to maximise use.

-      Encouraged potential consumers to shop around to identify the most economical and efficient supplier.

-      In terms of offering incentives, advised that SNG contributed £500 towards the cost of conversion which was similar to both Phoenix and Firmus.

-      Referred to the fact that there were two different types of gas pipeline.  LacPatrick had converted to natural gas using the alternative type of pipeline.

-      Pointed out that although only twenty two households in Artigarvan had connected to natural gas this was sufficient to justify the installation of a pipeline by SNG.

-      In regards to Sion Mills and Castlederg, explained that SNG were concentrating on the areas in respect of which a licence had been granted by the Utilities Regulator.  When this had been completed would investigate the possibility of extending the scheme to other areas.

-      Whilst SNG would welcome the extension of the scheme, it was restricted by the Utilities Regulator in terms of expenditure.  SNG were ultimately obliged to submit their plans/proposals to the Utilities Regulator for approval.  Any lobbying by Council in this regard would be much appreciated.

-      Reiterated that the extension of the scheme to more remote rural areas would be agreed on an individual cases basis and the number of properties involved.  The Utilities Regulator could assistant in the preparation of a business case in respect thereof.