Exit Reform Review Transmission Workstream 07 January 2010

Exit Reform Review

Transmission Workstream 07 January 2010

2

Agenda

Overview of 2009 processes

Review of 2009 applications

Potential impacts of 2009 applications

Other issues / potential areas for review

Discussion

2010

Overview of 2009 processes

4

High level overview of the 2009 processes

April May June July August September October

ContactDetails

Appointment of Booking Agent

NTS to DN Pressure

Applications

DN deadline for accepting Pressure

Applications

Initialisation of Capacity& MSPOR Values

July Application Window Invitation

LetterEnduring Annual Flat Capacity Applications

for Y+4, Y+5, Y+6

DNO Applications for Flex and Pressures

Enduring Annual Flat Capacity

Reduction Window

NTS provides Flex and Pressure indications to DNOs

Potential DNO adjustment of Applications

Application Window & Reduction Window

allocations

Ad hoc Applications and ARCAs

Flex information publication

begins

5

2009 process overview

NTS – DN pressure applications

2 reductions requested by NTS, requested by NTS, 1 accepted

Initialisation

Complex calculation process

8 queries received from users but no changes required

Ongoing process for ARCAs signed during transitional period

MSPOR

All users notified of relevant MSPOR values

Specific point made where MSPOR would potentially limit firm release

Continuing process for revisions being made at sites and sites modified or added to license via a section 23 process

6

2009 process overview (2)

Application window

Section 23 process run in advance

Most requests received in the last 2 days of the window

Why was this, is the window appropriate?

Learning points for next years communications / training

Who to, when, documentation, within window support

OCS process for DNs

Compressed timescales

Allocation process

No issues resulting

7

2009 process overview (3)

Flex publication

Began on time

Some amendment to definition may be sensible

Ad-hoc process

1 application received so far, but subsequently withdrawn

8

2009 process review – key learning points

Communications need to be focussed on the people who will be carrying out the processes / using the systems

Users need easy access to the supporting info that they want in a single place – views ?

Strong links required between new connections processes for new sites and the capacity application process to ensure issues are managed in tandem

9

Review of July 2009 applications

NTS Direct Connect / Interconnector / Storage /CSEP Offtakes:

35 Requests received from 23 Shippers

23 Increase Applications & 12 Reduction requests

Aggregate Increase of 833.9GWh/d

231.8GWh/d within Baselines

602.1GWh/d Incremental to baselines

Aggregate Reduction of 6.3GWh/d

1 Reduction Application Rejected (Due to a reduction of less than

100,000kWh/day)

10

NTS (DC) Offtake Capacity Position

6

232

602

3,031

3,858

0

500

1000

1500

2000

2500

3000

3500

4000

4500

Initialised

Level

Baseline

Increase

Applications

Incremental

Increase

Applications

Reduction

Applications

Final

GWh/day

Initial

Increases

Reductions

Final

11

What happened in the July application window - summary

NTS/LDZ Offtakes:

51 Applications received

40 Increase Applications & 11 Reduction Applications

Aggregate Increase of 640.1GWh/d

417.7GWh/d within Baseline (411.GWh/day due to baseline re-jig)

222.4GWh/d Incremental to baseline

Aggregate Reduction of 139.2GWh/d

Please Note:

All data shown in this presentation is for Y+4 only. Only 3 very slight increases were received for Y+5 & Y+6 (totaling ~1-2GWh/d) that

had a minimal impact on the overall position and therefore, these years were excluded in order to provide more clarity in the graphs

12

DN Offtake Capacity Position

139

4,490

418222

4,990

0

1000

2000

3000

4000

5000

6000

Initialised

Level

Baseline

Increase

Applications

Incremental

Increase

Applications

Reduction

Applications

Final

GWh/day

Increases

Initial

Reductions

Final

Impact of 2009 requests on NTS obligations

14

Current 2012/13 Peak Demand Forecast

5,527

-

2,000

4,000

6,000

8,000

10,000

12,000

GW

h/d

2012/13 Forecast PeakDemand

DN DC - Firm DC - Interruptible Moffat Storage LNG Storage IUK

2009 National Grid forecast 1:20 Peak

Day Demand for Gas Year 2012/13

15

Current Capacity Holdings

5,5275,983

-

2,000

4,000

6,000

8,000

10,000

12,000

GW

h/d


2009/10 OCS & Firm


Current 2009/10 Exit Capacity

Entitlements. Includes OCS

Allocations and Firm Capacity Holdings

16

Initialised Enduring Exit (Flat) Capacity

5,5275,983

7,520

-

2,000

4,000

6,000

8,000

10,000

12,000

GW

h/d


2009/10 OCS & Firm 2012/13 Initialised


Initialised Enduring (Flat) Exit Capacity (Based on 2007/08 Firm & Interruptible

Capacity)

17

Existing Enduring Exit Capacity Obligations

5,5275,983

7,5208,627

-

2,000

4,000

6,000

8,000

10,000

12,000

GW

h/d


2009/10 OCS & Firm 2012/13 Initialised Enduring f lat baseline


Enduring (Flat) Exit Capacity Baselines.

Initial Enduring period Exit Capacity Obligations

18

Enduring Aggregate Capacity Post Application

Total Enduring (Flat) Exit Capacity

5,5275,983

7,5208,627

8,856

-

2,000

4,000

6,000

8,000

10,000

12,000

GW

h/d


2009/10 OCS & Firm 2012/13 Initialised Enduring f lat baseline 2012/13 OCS & FirmEnduring Allocation


Enduring (Flat) Exit Capacity Allocation: Total Sold capacity

following 2009 Enduring Application

Window

19

New Enduring Obligation

5,5275,983

7,5208,627

8,8569,484

-

2,000

4,000

6,000

8,000

10,000

12,000

GW

h/d


2009/10 OCS & Firm 2012/13 Initialised Enduring f lat baseline 2012/13 OCS & FirmEnduring Allocation

2012/13 EnduringObligation


Enduring (Flat) Exit Capacity Baselines +

New Incremental allocated in 2009

Application Window

20

Increase in Existing Enduring Obligation

5,5275,983

7,5208,627

9,484

-

2,000

4,000

6,000

8,000

10,000

12,000

GW

h/d


2009/10 OCS & Firm 2012/13 Initialised Enduring f lat baseline 2012/13 EnduringObligation


Increased capacity obligation following

the 2009 application process

+857 GWh/day

21

National Grid’s thoughts

An increase NTS Exit (Flat) Capacity above the enduring baseline level represents a change in the risk profile – funding for which was not provided in the last PCR.

Baselines have moved further away from the physical reality of the system and demand

Is this an issue for the industry?

Where NTS has identified a specific issue NTS have requested and will continue to request revenue drivers for sites

However revenue drivers only mitigate the risk associated to specific sites.

Should other potential projects come forward then NTS may request additional revenue drivers

Potential areas for review

23

Areas for additional consideration (1)

Ability for Users to make reductions where they hold less than 100,000kWh (may be for initialised only)

Interaction between Ad-Hoc and Annual processes - variable unsold amounts within year, release the lowest value for Annual NTS Exit (Flat) Capacity (Y+1 to Y+3).

Release of Non Obligated Annual NTS Exit (Flat) Capacity (Y+1 to Y+3).

Move the latest Transfer time from 04.00 D to 03.00 D

Clarify B5.2.5 – Users unable to withdraw a trade if placed for a single day and notified to National Grid NTS. Should be all trades once notified to National Grid NTS (once Transferee and Transferor have both submitted)

24


DN flow swapping Flow swapping process in place, commercial impacts need to

be considered

Removal of Flexibility Tolerance for the calculation of Flexibility utilisation, could be specifically for the publication of data.

Clarity on Registered User for the Overrun User process.

Review of DN adjustment window Start DN adjustment process earlier?

Accept ad-hoc requests for later than Y+4, where earlier tranche(s) are earlier than Y+4?

25


Review Overrun Deeming process, for example….

Should the User be deemed earlier than Y+4 if there is unsold obligated ?

What if the User Overruns in consecutive years?

26

How should these be taken forward?

Next steps….

Views / thoughts?

27

2010

Deliver Phase 1 systems

First Annual Release (Y+3)

All the processes from 2009 are repeated

Exit substitution / baseline revision discussions begin (first workshop 27th Jan 2010)

Continue to work towards Phase 2 systems delivery

Continue User communications / training

Linepack Information Provision (1/10/10)

28

Discussion

Concerns/issues/questions?

Any other areas wish to discuss?

Documents

Exit Reform Review Transmission Workstream 07 January 2010