Vulnerability Team and Business updates

VCMA Annual Gas Distribution Network (GDN) Showcase Event

The event took place on the 20th July 2023. Over 350 stakeholders attended the online event which was led by Cadent.

Repurposing of Fuel Poor Network Extension Scheme (FPNES) to Vulnerability and Carbon Monoxide Allowance (VCMA):

FPNES is one of our Business Plan commitments from April 2021 to March 2026. This commitment was initially to deliver 5,000 gas connections to fuel poor homes across the NGN network, (volume driver of 10,000) over the 5 year period. FPNES is a reputational incentive set by Ofgem ie failing to deliver on the targets will not attract a financial penalty.

FPNES aims to increase affordable warmth by providing an assisted (often free) gas connection. Working in conjunction with customers and partners to deliver internal measures (gas central heating). Previously achieved through partnership working with Local Authorities/Social Housing Providers.

In order to qualify for a FPNES connection, an independent assessment is carried out by Communitas Energy (CE), NGN’s fuel poor partner. There must be an existing domestic dwelling and the resident must be in fuel poverty. Various eligibility tests are also applied and there must also be an intention to use gas in the home.

Gas connections delivered to fuel poor homes by April 2026

In relation to the 1,091 figure (figure from 01/04/2021 to date) mentioned during the workshop, there was a change introduced which impacted the scheme. In April 2022 funding was removed for first-time gas central heating under the Energy Company Obligations mechanism (ECO4). As a result, FPNES connections significantly declined, leading to a review by Ofgem in late 2022. Due to this, Ofgem revised all GDN targets for connections. NGN’s revised target is now 2,154 for the remainder of GD2 (contract period). Ofgem have advised that unspent FPNES funding will be re-purposed into the Vulnerability and Carbon Monoxide Allowance (VCMA).

How NGN will spend our money

New VCMA Collaborative Projects

  • Looking to initiate more health-related projects with the increased allowances
  • Partner Eco-System pilot Cumbria (collaborative project with Cadent) – currently in the process of recruiting the funding, delivery, and support partners

New VMCA NGN Projects

  • South Tyneside Homes
  • 3 new roles within NGN to support ongoing VCMA delivery:
  • Project Coordinator (VCMA)
  • Vulnerability Economic Evaluation Analyst
  • Vulnerability Partnerships and Relationships Officer

VCMA is Ofgem funded - NGN initially had approximately £7m to spend across GD2. Ofgem have since awarded NGN a further £12.79m from the re-purposed FPNES allowance, to spend on projects within the NGN region. All monies must be spent by the end of March 2026, with a minimum of 25% to be spent on collaborative projects with the other GDNs.

There are strict criteria for what this can be spent on – main categories are:

  • Raising awareness of carbon monoxide (CO)
  • Providing energy efficiency advice
  • Providing income maximisation support
  • Raising awareness of the Priority Services Register (PSR)
  • Providing financial support for the repair, replacement & servicing of appliances identified through gas emergency interventions
  • All projects must demonstrate a positive Social Return on Investment (SROI) through a consistent SROI framework

Business Updates

Project 1

Redcar Hydrogen Community Fund

Following the success of last year’s Redcar Hydrogen Community Fund, which saw nine brilliant Redcar-based community groups sharing funding grants from Northern Gas Networks (NGN), we have decided to reopen the scheme this year.

Applications closed on 15 September 2023

Project 2

GD3 Business Plan

Over the coming months we will be starting to engage with our stakeholders about their priorities and feedback, so we can reflect this in our planning for our GD3 Business Plan.

Ofgem are currently considering whether the next period should be 5 years or longer.

A decision on this will be issued early 2024, and the GD3 business plan will need to be submitted by end 2024.

Northern Gas Networks & Partners - Supporting Communities Together Event

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