Shrinkage Forum 22 January 2014

Roy Malin

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2014/15 Shrinkage Proposals

Initial proposals issued December 2013

Proposed Shrinkage Quantities calculated using two versions of

the leakage model:

V1.3 Original Model

V1.4 Includes LP Service Modification

As agreed at the 10 December 2012 Shrinkage Forum, National

Grid proposed and applied the revised model for 2013/14 in

anticipation of the model change being approved

Still expect model change to be approved

Need to agree the leakage model basis for 2014/15 proposals

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2014/15 Shrinkage Proposals (GWh)

LDZ Using Leakage Model v1.3* Using Leakage Model v1.4* Difference

EA 232 217 15

EM 283 260 23

NT 282 256 26

NW 382 364 18

WM 310 307 3

NE 217.894.26*

NO 185.49

SC 230.14

13.5*SE 345.97

SO 235.43

SW 234.7 NG estimate based on data previously provided by WWU. Values to be confirmed

13.4WN 54.7

WS 124.4

* As published in initial proposals Total and estimated value 116 £2.6m

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LP Service Modification

Consultation issued August 2013

Report on consultation sent to Ofgem for approval – October 2013

Concerns

NGN and WWU data not independently verified

Variance of impact between LDZS

NGN and WWU will be commissioning an independent review of their

leakage models and proposed baseline changes

Variance analysis

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LP Service Modification Variance Analysis (1)

LP Service Modification Variance Analysis (2)

Published impact is the difference between v1.3 and v1.4 leakage

models using 2010/11 data

Necessary to normalise for:

Length of Metallic Main

Average System Pressure

Used an LDZ average

Actual impact will depend on the combination of the individual low pressure

networks’ ASP and metallic mains lengths

Calorific Value

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LP Service Modification Variance Analysis (3)

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AGI Venting IFI Update

Currently, National Grid procure 84GWh for AGI Venting

We were expecting a venting value of approximately 130GWh

Report Received January 2014

National Grid venting from pneumatic control equipment

17+/-5.1 GWh

Concerns over robustness of site/equipment inventory

Intention to commission DNV GL carryout a site inventory of National

Grid’s pneumatic control equipment

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Review of SLM Review Consultations

Consultations issued by each DN November/December

2013

Two responses – British Gas and Scottish Power

Intend to issue a Joint DN Report on the consultation

Subject to agreement, future SLM Reviews and

Consultations to be a joint DN process

Agree with stakeholders and Ofgem

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Outcome of SLM Review Consultations

Issues/areas for development

The level of detail included within the SLM Review;

The requirement to review the low pressure leakage rates, and in

particular whether this would be cost-effective;

Continued development of Theft of Gas detection and resolution;

Further clarification of the Own Use Gas estimation;

How the industry deals with CSEP Shrinkage;

The level of detail provided regarding the ‘activity factors’ driving the

shrinkage estimation, e.g. mains replacement and pressure

management.