RG 0291 – July 2010 Workshop

Cashout actions and further considerations

Actions RG0291 006 and 007: ‘Linepack Build’

2009/10: 675MCM or 7,400GWh in Residual Balancing Actions

Gross trade value of £74M (Sell £42M, Buy £31M), net £12M

202 Trade days (Buys on 94, Sells 108), hence potential for build up of Linepack on 163 days

Total ‘build up’ on these non trade days = -12MCM

If ‘build up’ was bought / sold at SAP then ‘cost’ = ~£774k

i.e. £774k cost would be recovered via neutrality

However, NG is unlikely to trade exactly @ SAP thus there is a perceived inefficiency associated with NG’s balancing actions

If we assume “inefficiency” is difference between SMPs & SAP then potential inefficiency for market = ~£854k

Total potential net misallocation (when applying SMPs) = -£1.63M

Actions RG0291 008 – ‘Refinement of Operational Costs’

Last review group we presented that ~95% of compressor fuel is used to transport gas from the main entry points around NTS

Therefore operational cost of managing daily shipper imbalance within Linepack is somewhere within the remaining 5%

In 2009/10 2,437GWh used as Compressor Fuel Cost of Compressor Fuel used = £33M

Total system throughput = 1,127,355GWh

Gross system imbalance = 28,738GWh (3% of total)

Using the assumption that NG has had to use 3% of compressor fuel to manage this imbalance gas, an SMP can potentially be derived; (Total compressor fuel cost x % of imbalance vs throughput) / annual system imbalance

(£33M x 3%) / 28.738GWh

0.00297p/kWh

Actions RG0291 010 – ‘System Length vs SAP’

End of Day Linepack vs SAP

0

0.5

1

1.5

2

2.5

01/04/200901/05/200931/05/200930/06/200930/07/200929/08/200928/09/200928/10/200927/11/200927/12/200926/01/201025/02/201027/03/2010

Date

SA

P (

p/k

Wh

)

-15

-10

-5

0

5

10

15

LP

Ch

ang

e (M

CM

)

SAP

LP Change

Actions RG0291 008 - continuedNTS flows vs SAP

0.00

50.00

100.00

150.00

200.00

250.00

300.00

350.00

400.00

450.00

500.00

Date

Flo

w (

MC

M)

0

0.5

1

1.5

2

2.5

SA

P (

p/k

Wh

)

Demand Actual, NTS, D+6

NTS System Input, Actual

CLP

SAP