Real Time Settlement Methodology (RTSM)

Building upon the foundational work and recommendations of Cadent's Future Billing Methodology (FBM), RTSM examines how to practically implement these solutions. This includes examining design, cost, risk assessments, safety, and environmental factors.

What is the purpose of the RTSM project?

Change has already begun. The UK Government is supporting the blending of up to 20% hydrogen into Britain's gas distribution networks. The pioneering H100 Fife trial on the east coast of Scotland is also scheduled to begin trials in summer 2025. This will provide evidence to the government and appointed bodies on the benefits of low-carbon gas for decarbonising heat, alongside other projects such as HyDeploy.

Ensuring fair gas billing in the low-carbon transition

There is still much to consider before low-carbon gases can be introduced into the network. 

With a lower calorific value (CV) than natural gas, consumers will need to use a larger volume of low-carbon gases to achieve the same output. So, as Great Britain becomes a multi-energy system, it’s essential that customers are charged fairly for their usage so gas settlement doesn't become a problem. 

The RTSM programme aims to develop a fair, convenient, and equitable settlement and billing methodology to facilitate the transition to low-carbon gases and the fulfilment of the UK's net zero targets.

RTSM and FBM: What are the key differences?

While both RTSM and FBM aimed to ensure fair billing during the energy transition, RTSM focuses on how to implement the recommended options identified by FBM. 

The two projects also addressed how introducing different gases with varying CVs onto the network could impact billing if current processes and regulations remain unchanged.

First, FBM specifically looked at: 

• Setting the foundations for evaluating the current energy billing framework and identifying areas for change based on four potential options.
• Opening up discussions around how billing could be adapted for hydrogen, biomethane and blended gas.
• Evaluating some of the costs and timelines for these billing changes. This fed into Cadent’s recommendation to explore the long-term feasibility of Embedded Zone Charging (Option B) and Online CV Modelling (Option C).

In contrast, the RTSM is: 

• Examining the changes needed to facilitate the recommended options, including the technical and operational challenges of injecting low-carbon gas. 
• Developing and demonstrating an integrated and flexible solution that enables the characterisation, settlement and billing processes of a multi-energy grid.

In short, RTSM is taking the research of FBM and focusing on the practicalities of implementation in the next crucial step towards developing a low-carbon energy system.

How could RTSM impact future policy and regulation?

Of the five options for billing low-carbon gases explored by FBM, Options B and C were deemed the most feasible.

To move forward with these two options, we will need changes to: 

• The current Gas Safety Management regulations, which limits the amount of hydrogen in the gas mix to 0.1%.
• Widen the permitted Wobbe index. 
• The methodology for how gas consumers are billed.

Making these necessary changes to processes and regulations will require industry-wide collaboration across the entire gas value chain, including the support of code administrators, trade bodies, and regulators such as Ofgem and NESO.

Those facing the most significant changes to their processes include:

• Distribution Networks
• National Gas Transmission
• Suppliers 
• Xoserve as the Central Data Service Provider

We are reviewing our systems and operations to prepare for the introduction of multiple gases to the network. Part of this process is our work on Project Trident.

The work undertaken by RTSM and its partners will also support UK Government work.

Get in touch

If you want to know more about the project, please email us at decarbonisation@xoserve.com.

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