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NTS Flexibility Capacity Product – options for refinement

NTS Flexibility Capacity Product – options for refinement. NTS Transmission Workstream 2nd February 2006 (nks/060202_Trans_Wstream_Exp_flex_product_v0p1 01/02/06). Background and presentation objective.

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NTS Flexibility Capacity Product – options for refinement

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  1. NTS Flexibility Capacity Product – options for refinement NTS Transmission Workstream 2nd February 2006 (nks/060202_Trans_Wstream_Exp_flex_product_v0p1 01/02/06)

  2. Background and presentation objective … this presentation draws heavily on a presentations given to the Enduring Offtakes Workgroup on 18th January and 1st February … it has been structured to provide further explanation of the “expanding flexibility product” and “single product” models explored at those meetings … some examples of DN offtake “throughput” and “flexibility” experience are presented … views of workstream members are sought to inform timely policy development

  3. Presentation Structure • The concepts • Recap of “flexibility utilisation” assessment • Expanding flexibility model • Single product model • Example throughput/flexibility utilisations • Areas for consideration • Does either approach address current TANIF weaknesses? • Implications of either approach • To User bookings? (inc DN incentives) • To NTS investment considerations? • To NTS operations? … either approach will not be a panacea … but is either worthy of further consideration and development?

  4. Offtake profile Flexibility utilisation = 3 06:00 22:00 06:00 The concepts: “flexibility utilisation” assessment principle Flexibility utilisation = cumulative offtake to 22:00 – (2/3) of daily flow Average flow rate Throughput = 24*Av flow rate = 36 Product designed to reflect linepack impact at 22:00; time of maximum system stress

  5. Flexibility utilisation NTS Exit Flexibility Capacity booking 3 0 36 Demand – end of day flow (throughput) NTS Flat Capacity booking The concepts: Towards a New Industry Framework (TANIF) User booking requirements … expectation Users will book NTS “Flat” and “Flexibility” capacity levels required to satisfy all their requirements and to provide investment signals … may require users to consider both their highest throughput and highest flexibility utilisation requirements Feasible range of “flat” and “flex” offtakes (avoiding overruns) X (36,3)

  6. The concepts: Expanding flexibility product … many users are unlikely to have coincident peak flexibility and daily offtake requirements … this may force individual users to “over book” a combination of “flat” and “flexibility” capacity … so there might be scope for contemplating a “Flexibility” entitlement that expands when a user is not fully utilising his “Flat” holding

  7. Extension of feasible range derived from transmission:flexibility substitution Flexibility utilisation NTS Exit Flexibility Capacity “peak” booking Feasible range of “flat” and “flex” offtakes (avoiding overruns) 0 Demand – end of day flow NTS Flat Capacity booking The concept: User booking requirements in an “expanding flex world” … expectation Users will book NTS “Flat” and “Flexibility” capacity levels required to satisfy their requirements on “peak throughput” day … unused transmission capacity “automatically converted” into extra Flexibility availability based on a transmission:flexibility substitution ratio

  8. Line derived by assuming a [4.5 : 1] transmission : flexibility substitution ratio The concept:the “expanding flexibility product” may facilitate efficient User booking? Retains the concept of separate products but Users book a “requirement under peak transmission conditions” ie a flat and flex combination but have increased flex availability off-peak arising from transmission/flexibility substitutability Flexibility entitlement Flexibility booking Peak throughput booking Transmission throughput User flex entitlement = flex booking + [2/9] (peak throughput booking – throughput)

  9. The concept: “Single product model” … the preceding model still requires users to book 2 separate products … a further simplification might be to contemplate a single “transmission capability” parameter to determine a single “product” booking … assessment of product utilisation made in respect of two dimensions: throughput against single “transmission capability” booking flex usage against a derived flex “entitlement”

  10. Single parameter -transmission capability booking The concept: Developing a simple single parameter booking regime? Flexibility entitlement Utilisation assessed in two dimensions: - Throughput - Flexibility Feasible range of throughput and flexibility utilisation throughput User flex entitlement = [2/9] (transmission capability booking – throughput)

  11. Example throughput/flexibility combinations … the following three slides provide three usage pattern graphics for 3 DN offtake … but we must be wary of data issues and interpretation Nothing in what follows should be taken as implying that the DNs are in any way acting in “breach” of current UNC obligations: DNs are entitled to book OCS flexibility requirements at levels below their individual “peak requirements”.

  12. Offtake 1 (June 2005 to November 2005) Flat Cap Booking Flow Flex Utilisation Flex Cap Booking Upper 4.5:1 Envelope 0.00 0.00 Throughput

  13. Offtake 2 (June 2005 to November 2005) Flat cap booking Flex cap booking Flow Flex Utilisation Upper 4.5 : 1 envelope 0.00 0.00 Throughput

  14. Offtake 3 (June 2005 to November 2005) 0.00 Flat cap booking Flow Flex Flex cap booking Upper 4.5 : 1 envelope 0.00 Demand

  15. … and three more to illustrate other aspects

  16. … some are pretty close to being within “feasible range” Offtake 4 (June 2005 to November 2005) Flow Flex Utilisation Flat cap booking Flex cap booking 4.5 : 1 line 0.00 0.00 Throughput

  17. … some datasets might have needed “substituted data” Offtake 5 (June 2005 to November 2005) Flow Flex Utilisation Flat cap booking Flex cap booking 4.5 : 1 line 0.00 0.00 Throughput

  18. … some might illustrate increased “flat” and “flex” requirements Offtake 6 (June 2005 to November 2005) Flow Flex Utilisation Flat cap booking Flex cap booking) 4.5 : 1 line 0.00 0.00 Throughput

  19. … the Enduring Offtake Working Group have asked for data about historic flexibility/throughput utilisation at other NTS exit points … whilst data is being gathered it might be worth thinking about some of the “theory” associated with transmission/flexibility feasible ranges

  20. Offtake profile Flow rate 24*MHQ = SOQ MHQ 06:00 22:00 06:00 Thinking about transmission/flexibility substitutability (1) For DCs the current bundled NTS Exit Capacity Product enables access to any flow rates beneath the implied MHQ envelope DCs effectively have access to a maximum of 2/9 SOQ “flexibility” This maximum flex usage (2/9 of SOQ) occurs at 2/3 SOQ throughput

  21. x/3 x/3 x/3 x/3 x/3 Thinking about transmission/flexibility substitutability (2) Maximum theoretical flexibility taken below SOQ can be easily established Offtake profile Flow rate 24*MHQ = SOQ MHQ Average flow rate 06:00 22:00 06:00 Thus maximum flex usage is 2/3 of ( SOQ – actual daily offtake)

  22. Slope of line = -2/3 Thinking about transmission/flexibility substitutability (3) So the theoretical transmission/flexibility envelope associated with Direct Connects can be established from a number of considerations: Flexibility utilisation SOQ Transmission throughput

  23. Offtake profile Flow rate Max flow Average flow rate 06:00 22:00 06:00 Flexibility utilisation = 1/3 throughput Thinking about transmission/flexibility substitutability (4) At lower demand levels “flexibility utilisation” is also “capped” 2/3 max flow rate

  24. Slope of line = 1/3 Thinking about transmission/flexibility substitutability (5) So working along the throughput axis the max flexibility utilisation can be visualised as follows: Flexibility utilisation SOQ Transmission throughput

  25. Thinking about transmission/flexibility substitutability (6) So the upper envelope of the theoretical transmission/flexibility envelope associated with Direct Connects can be visualised as follows: Flexibility utilisation 2/9 of SOQ 2/3 SOQ SOQ Transmission throughput

  26. Flexibility utilisation 2/9 of SOQ 2/3 SOQ SOQ Transmission throughput Thinking about transmission/flexibility substitutability (7) .. and the full envelope could be established as:

  27. Assessment of the two options (1) • Addressing TANIF “weaknesses” • Complexity? • Accurate user commitment? • Useful information to inform NTS investment? • Other areas?

  28. Assessment of the two options (2) • Implications of either approach • To User bookings? (inc DN incentives) • To NTS investment considerations? • To NTS operations? • Downsides of approach? … probably better than TANIF approach … but which is the better? … and how does it compare with “status quo” or other alternatives?

  29. Next steps Does the Transmission Workstream see merit in further consideration of the two product (expanding flexibility model) ? the single booking parameter derivative of the above? Views are sought to inform the next EOWG to be held next week, 8th February Alternatively are there other approaches that should be considered at this time?

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