So Incentives
NTS Shrinkage
We are responsible for forecasting and procuring the energy required for National Transmission System (NTS) Shrinkage for each gas day. This involves trading on the NBP gas market to efficiently procure energy required.
What are the components of NTS shrinkage?
NTS Shrinkage for each gas day is the difference between measured inputs and measured outputs, taking into account the daily change in linepack.
We procure NTS shrinkage energy (gas and electricity) to cover three components:
- Compressor fuel usage: the energy required to run the compressors used to transport gas at high pressure around the transmission system. This energy can be either gas or electricity, depending on the power source for each compressor.
- Calorific value shrinkage: gas that cannot be billed due to application of the Gas (Calculation of Thermal Energy) Regulations 1996 (amended 1997).
- Unaccounted for Gas: the remaining quantity of gas that is unaccounted for after taking into account all measured inputs and outputs from the system.
NTS Shrinkage Procurement
We procure gas for NTS shrinkage by trading on the NBP gas market, using a trading strategy that includes both long-term forward procurement and trading closer to and on the day, in order to mitigate exposure to market price volatility. Data on the volumes of gas procured for NTS shrinkage is available under ‘NTS Procurement’ in the National Gas Transmission Data Portal.
How the NTS Shrinkage Incentive Works
A financial incentive scheme for NTS Shrinkage was reintroduced for the RIIO‑T3 period, running from 1 April 2026 to 31 March 2031. Under this scheme, the costs of our gas trades for NTS Shrinkage are compared against benchmark costs derived from daily gas market reference prices that are published by a price reporting agency.
This mechanism aims to encourage efficient purchasing decisions and cost‑effective management of shrinkage energy on behalf of consumers.
Trading performance is benchmarked against a reference price published by a Price Reporting Agency. The reference price is a Volume Weighted Average Price if this is available, otherwise it is an End-of-Day assessment. Incentive has a Cap and collar +£2.3m /- £2.3m per annum.
Procurement Governance and Licence Obligations
In addition to the financial incentive, we have a licence obligation to maintain an NTS Shrinkage Procurement Strategy. This sets out how we will manage procurement of NTS Shrinkage energy to ensure cost miminisation and appropriate risk management for customers.
To provide confidence in this approach, we must also obtain an independent examiner’s statement, on the design and implementation of the strategy.
Unaccounted for gas (UAG)
Unaccounted for gas (UAG) is gas that is not accounted for on the National Transmission System (NTS), after taking into account measured inputs and outputs, linepack change, compressor fuel use and Calorific Value Shrinkage. National Gas investigates the causes of UAG, which is one of the components of NTS Shrinkage.
Gas unaccounted for due to metering errors
Gas that is unaccounted for in the National Transmission System (NTS) is likely to be the result of a data or metering error. That makes it a complex component of shrinkage to investigate. Identifying the specific potential causes of UAG includes looking at the mechanical behaviour of high-pressure metering systems, as well as statistical variations in their operation.
Daily UAG data
We publish daily UAG data each month which is available to download below. Due to the process of energy data close-out, the most recent values are subject to change.
UAG reports
We regularly report on our activity to investigate the potential causes of UAG. These reports cover the latest UAG trends and provide updates on our data analysis and meter validation activities. Take a look at our most recent UAG Report, as well as previous reports: