National Grid Gas Transmission: Critical Infrastructure Extreme Value Analysis (EVA)

BMA worked with National Grid Gas Transmission to develop an advanced systems model to robustly quantify and evidence the requirement for significant investment in critical infrastructure at risk of low probability high consequence events. Prescriptive analytics combined with next generation systems modelling was used to explore intervention scenarios from a systems perspective, taking into account system design and configuration management.

National Grid Gas Transmission (NGGT) own, manage and operate the UK high-pressure gas national transmission system (NTS). The NTS is a gas superhighway that connects the UK, balancing supply and demand on a day-to-day basis to make gas available when and where it is needed – providing heat to around 80 per cent of the UK’s 28 million homes.

Prescriptive analytics combined with next generation systems modelling was used to explore intervention scenarios from a systems perspective taking into account system design and configuration management. Risk adjusted net present value analysis, scenario analysis and systems modelling were used to support the business case to the economic regulator, Ofgem, resulting in the receipt of over £110m additional funding.


NGGT have day-to-day responsibility for balancing supply and demand across a resilient and safely operated network.
As custodians of critical national infrastructure, NGGT’s business plans require a robust balance of operational expenditure and significant, often high profile, capital investments. NGGT is subject to the UK industry economic regulator, Ofgem.

During the periodic price control review, RIIO-T2, National Grid were required to submit business cases for several pieces of critical national infrastructure facing low probability, high consequence events and some critical assets which would fail the Industrial Emissions Directive (IED) by 2030.

The Challenge

The key challenge for the project was to develop a methodology and systems model solution to determine and prove the scale of investment required to manage low probability, high impact risks and asset interdependencies. In particular, NGGT had received challenge from Ofgem to robustly quantify the net present value (NPV) of any significant investment options in the context of the risk landscape. Traditional cost benefit analysis techniques had been unable to fully capture the low probability high impacts risks and therefore failed to make the case for investment with the Regulator (Ofgem).

Therefore, the model solution was required to support NGGT’s submission of a quantifiable, evidence-based business case to Ofgem to obtain additional funding to carry out the network interventions required.

The Assets

This project examined a range of intervention options, and their net present values, to maintain the integrity and operational capability of the Feeder 9 gas transmission pipeline. Feeder 9 was a 5.4km high pressure pipeline situated under the Humber Estuary on the East coast of Northern England. The pipeline, whilst having a very low probability of failure, had very high consequences should failure occur.

Critically, Feeder 9 was suffering erosion of the supporting and covering substrate on the estuary bed. This erosion may have lead to the exposure of free spanning, unsupported sections of pipeline developing over time and ultimately catastrophic pipeline rupture if no risk mitigation was put in place.

The challenges presented by Feeder 9 include a complex interdependency between capital investment and operational risk mitigations.

St Fergus
St Fergus, was the largest gas compression site in the UK. It housed 9 compressor units with a combined power of 155 MW, equivalent of up to one third of the total UK gas demand. 7 out of these 9 compressors would have been non-compliant with the Industrial Emissions Directive (IED) by 2030.

The challenges presented by St Fergus were emissions compliance, high operating costs, and complex asset interdependencies within the compressor site.

Hatton was a critical gas compression site in the centre of the National Gas Transmission System. It provided significant network flexibility to balance supply and demand across the UK. 3 out of 5 compressors would have been non-compliant with IED by 2030.

The challenges presented by Hatton were emissions compliance, high operating costs, and complex asset interdependencies across the wider network.


In this National Innovation Award (NIA) project, BMA worked closely with NGGT to develop an innovative methodology and model in order to quantify the risk adjusted NPV of the Feeder 9, St Fergus and Hatton investment options. Key aspects of the appraisal were:

  • Building an integrated model of the possible decision routes which could mitigate risk including operational mitigations.
  • Including both low probability and high consequence failure events, as well as high frequency and low consequence
  • failure events.
  • Varying key input metrics as a method of stress testing the results.       
  • Allowing uncertainty in input variables where definitive data was not available.
  • Extensive sensitivity and stress testing of model assumptions, logic and inputs.
  • Scenario analysis using Advanced Digital Business Twins to explore how new assets and technologies would impact optimal asset operation in the future.

BMA followed their established data and requirements gathering process leading to model build, validation, sensitivity analysis and ultimately the production of results for client review.

This iterative and agile approach allows robust, complex models to be rapidly built and applied with full buy-in and inclusion of the client and their teams.


BMA developed a range of analysis outputs for NGGT assessing interdependencies, cost and risk driver analysis, as well as NPV, optimised scenario analysis and stress testing.

Quantifying the risks of high impact yet low probability events is a challenging problem and NGGT turned to Business Modelling Associates (BMA) to address this challenge. To undertake this investment appraisal, BMA combined their risk analytics consultancy experience with leading edge business analytics software. Many disparate data sources were incorporated into the analysis, which involved modelling a complex decision tree where extreme risk was a primary investment driver.

The model solutions and scenario analysis were extensive and included whole systems analysis and risk impact from multiple asset failures. This extensive systems scenario analysis highlighted, for example, where increased site resilience and reliability could be achieved through asset intervention within a system or through changing system configuration.

BMA developed a range of analysis outputs for NGGT assessing interdependencies, cost and risk driver analysis, as well as risk adjusted NPVs, scenario analysis and stress testing. The detailed expenditure and risk benefit analysis for optimal asset intervention were used to support the business case and additional expenditure request to Ofgem.

Areas of Asset Management

The project covered areas of asset management spanning Strategic Planning, Asset Management Decision Making and Life Cycle Delivery.

Lessons Learned

BMA provided thought leadership, innovation and agile development to deliver significant realisable value to NGGT; fundamentally combining the areas of Systems and Reliability Engineering in combination with prescriptive constraint-based optimisation and scenario analysis.

The key lessons learned included:

• System design impacts system resilience.

• System design impacts optimal system operation which in turn impacts individual asset reliability.

• System resilience cannot be fully understood by looking at assets individually - it must consider system design and operation.

Outcomes of the project

Key outcomes and benefits of the project included:

  • Risk adjusted NPV provided for all options on a consistent and comparable modelling basis.
  • Direct and indirect consequences valued and compared.
  • Robust ‘What if?’ and sensitivity scenario analysis (e.g. What if the Rough Storage field closes?).
  • National Grid were able to effectively and rapidly quantify trade-off between site resilience, operating costs and emissions.
  • Allowed planners to rapidly focus attention on investment schemes with highest NPV for further refinement.
  • Configurable and dynamic results visualisation supported effective engagement with stakeholders.
  • Favourable peer reviews by Cambridge and Cranfield Universities.
  • Visually compelling results presentation.
  • Ultimately informed RIIO-T2 business plan submission.

The solution enabled NGGT to engage directly with Ofgem and secure over £110m of investment funding.

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