Frontier Economics is pleased to have supported Global Infrastructure Partners in conducting commercial and regulatory due diligence on the SGN business.
Global Infrastructure Partners (“GIP”), one of the world’s leading specialist infrastructure investors, announced on 22nd December 2021 an agreement to acquire a 25% equity interest in Scotia Gas Networks (“SGN”) from OMERS Infrastructure. SGN is the second largest gas Distribution Network Operator (DNO) in the United Kingdom, having a regulated asset value of approximately £6.0bn. SGN operates in Scotland and the Southeast of England, serving key cities such as London, Edinburgh, Oxford, and Glasgow.
As part of this engagement, we assisted GIP with the commercial outlook for the business in a world of uncertainty over future natural gas and hydrogen demand. This involved translating policy statements into fully quantified demand scenarios for both commodities in SGN’s licence areas, and assessing the opportunities and risks involved in upside and downside scenarios. We also helped GIP assess the risks and opportunities for SGN under the newly determined regulatory price controls (RIIO-2), and helped assess the outlook for the regulatory environment in the long-term towards a Net Zero compliant energy system.
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