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COR1360 User Trials - Training week commencing 22/03/2010

COR1360 User Trials - Training week commencing 22/03/2010. Workshop Agenda. A refresher of Modification Proposal 0195AV Introduction to NTS Exit Reform Initialisation – Process and Timeline Enduring Annual Application Process Annual Application Window Pricing

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COR1360 User Trials - Training week commencing 22/03/2010

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  1. COR1360User Trials - Trainingweek commencing 22/03/2010

  2. Workshop Agenda • A refresher of Modification Proposal 0195AV • Introduction to NTS Exit Reform • Initialisation – Process and Timeline • Enduring Annual Application Process • Annual Application Window • Pricing • Enduring Annual Reduction Window • Adhoc Increase Applications • Adhoc Reductions • Business Rules Timeline • Introduction to NTS Exit Reform System Solution • User Preferences • Request Capture • Reporting

  3. 1- 31 July Section J In this presentation…. • A blue box in the top right corner states the times at which the rules being explained apply e.g. when talking about the Annual Application Window, 1 – 31 July will be in the top right corner • An orange box at the top of the slide states the primary section of legal text where the rules being explained are contained e.g. when talking about Assured Offtake Pressures, Section J will be in the top right corner

  4. Definition of Year Y • An Annual Application Window held in July Year Y releasing capacity for Y+1, Y+2 and Y+3 in this example would be: • Application Window held July 2012 (Y) • Capacity Release • 1 October 2012– 30 September 2013 (Y+1) • 1 October 2013 – 30 September 2014 (Y+2) • 1 October 2014 – 30 September 2015 (Y+3) YEAR Y YEAR Y+1 YEAR Y+2 YEAR Y+3 O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S 2012 2013 2014 2015

  5. Background • Change introduced via Modification 0195AV – Approved 19th Jan 2009 with an implementation of 1st April 2009 • The current Transitional NTS Offtake arrangements allow Users to procure NTS Exit Capacity for use up to (and inclusive of) 30th September 2012 and is known as the Transitional Exit Capacity Regime. • The reform to the Transitional arrangements will allow Users to make Capacity bookings and apply for increases or decreases to their Enduring Capacity rights from 2009 onwards, such bookings will be effective from 1st October 2012 and is known as the Enduring Exit Capacity Regime.

  6. Overall Regime Objectives & Incentives • Objectives • Long Term Investment signals to National Grid NTS • All NTS Exit Capacity Users are treated equitably • Commercialise the DN interface • Incentives • User Commitment • Overruns

  7. Offtake Responsible Parties Interconnector Storage Direct Connects DNs NTS DM Site LDZ (Shipper) (Shipper) Reserving CSEP iGTS NDM Aggregate

  8. High Level Principles: Current Exit Regime vs 0195AV

  9. UNC Classes of Capacity NTS Exit Capacity Shipper & DN Operator Developer DN Operator NTS Exit FLAT Capacity NTS Exit FLEXIBILITY Capacity Annual Capacity Daily Capacity Enduring Annual Capacity Annual Capacity Daily Firm Capacity Daily Off Peak Capacity

  10. Initialisation

  11. 1 May 2009 TD 8 Initialisation • Enduring Annual (Flat) Capacity allocated to Users at all NTS Exit Points • For Direct Connect NTS Exit Points • Based on peak 2007/08 Capacity Holdings • Firm booking + Interruptible • For NTS/LDZ Offtakes • Based on OCS statement for year 2011/12 agreed in 2008 • If total initialised value for site > baseline • Scaled back to baseline

  12. 1 May 2009 TD 8 Initialisation - Offline • All Users were notified of initialised values on 1 May 2009 • NTS notified Users of allocation • Or an agent notified at shared sites • No User Commitment was associated with initialised rights • Users were able to reduce their initialised value in July 2009 reduction window • Sweep ups will be completed at later dates of new sites connecting / ARCAs signed between 1 October 2008 and 30 September 2012 • Maximum NTS Exit Point Offtake Rate (MNEPOR) values were communicated prior to 1 May 2009

  13. TD 8 Initialisation Timeline 23 April – Exit Capacity Booking Agent notifies NTS of individual User allocations, which equal aggregate amount previously notified 1 April – implementation of new regime 7 April – latest date for notifying NTS of Exit Capacity Booking Agent at NTS Exit Point 1 April 09 1 May 09 1 May – NTS notifies each User of initial amount of Enduring Annual (Flat) Capacity allocated to them at each NTS Exit Point 16 April – NTS notifies Exit Capacity Booking Agent of aggregate value of Capacity allocated to site

  14. Annual Processes

  15. 1- 31 July TPD B3.2Annex B-1 Enduring Annual Application Window • Application window open every business day in July • For Capacity to be utilised from 1 October Y+4, Y+5 and/or Y+6 • ‘Enduring’ Capacity (i.e. evergreen) • 4 years’ User Commitment (defined in ExCR) • NTS to allocate no later than 30 September • User does not submit a price • Also includes ‘deemed’ application when a User has overrun (in reality, will not be in play until July 2013 window)

  16. 1- 31 July TPD B3.4 Annex B-1 Annual Application Window • Application Window open every business day in July • Apply for years Y+1, Y+2 and Y+3 • First applicable in July 2010 for Y+3 (i.e. Year 2012/2013) • Annual Capacity rights (not enduring) • NTS to release unsold obligated Capacity • No price, allocated up to obligated level then pro-rate based on volume • NTS has 5 days to allocate • NB Developers cannot apply for Annual Capacity

  17. 200 150 100 Committed capacity: 150 2011 2012 2013 2014 2015 2016 2017 Enduring Application Scenario

  18. Reduction cannot be effective during the commitment period Committed Capacity: 150 – superseded after 2014 200 Committed capacity: 200 150 100 2011 2012 2013 2014 2015 2016 2017 2018 Application Scenario

  19. But the price actually paid will be that included in the Transportation Statement published the summer preceding utilisation i.e. August 2012 …for Capacity to be utilised here in October 2012 Capacity Application received here … July 2009 TPD B3.12 Prices Indicative prices published here…. May 2009. (http://www.nationalgrid.com/uk/Gas/Charges/indicativecharges/) 2009 2010 2011 2012 J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D

  20. 1- 15 July TPD B3.2.14 – 3.2.24 Enduring Annual Reduction Window • Became effective in 2009 • Every business day from 1 July to 15 July • Users can apply to reduce their Enduring Annual (Flat) Capacity • Subject to User Commitment validation/checks or NTS being able to utilise the Capacity to meet a request at the same Exit Point • User specifies Reduction Date • Can be no earlier than 1 October Y+1 • Default is 1 October Y+2, NTS may agree, at its discretion, to reduce earlier than Y+2

  21. Adhoc Processes

  22. 1 October – 30 June TPD B3.2Annex B-1 Ad-hoc Increase Applications • Can apply from 1 October – 30 June • Must be a New Site, or an Existing Site that passes threshold (10 GWh/Day or 125% prevailing baseline) • Can apply for up to 4 separate tranches • The Increase start date for Capacity must not be earlier than 6 months from date of application or later than 1 October Gas Year Y+4 from application • NTS must make an offer in 15 days / 90 days if think that works will be required / more than 90 days if both parties agree • Offer specifies Demonstration Date and Capacity date(s) • Reasonable endeavours to meet the Capacity date(s) requested • User has 30 days to accept

  23. TPD B3.2.14 – 3.2.24 Ad hoc Reductions • NTS may invite Users to submit a notice of reduction at other times in order to support a Capacity request at the same NTS Exit Point • NTS will issue an invitation which will specify • The period during which a User may give a notice of reduction • The earliest date on which NTS may give notice to the reduction • The date on which NTS will notify the User as to whether it will give effect to the notice of reduction

  24. NTS Exit Reform Timeline: 2010-11 Processes Business Rules May 2010 June 2010 July 2010 Aug2010 Sept 2010 Oct 2010 Nov 2010 Dec 2010 Jan 2011 Feb 2011 Mar 2011 Apr 2011 NG NTS Submit Application Invites User submits Applications for Enduring Capacity for Y+4, Y+5 & Y+6 and/or Capacity. Decreases Effective from 1st October 2012. Annual Capacity Applications can also be made during this window User can make amendments to Capacity Requests placed In July NG NTS Publish Application Results User can submit Ad-Hoc Applications to Increase Capacity Holdings Amendments placed within the system (Request Capture Screen) NG NTS Submit Application Invites via email Application Screens Opened From 01/07 to 31/07 for User Requests System Solution Results Published via Gemini & MIPI Decreases can be made in the system between 01/07 to 15/07 Application Screens Available for Ad-Hoc Request within System DN Adjustment Window Open For 5 business Days following 15/09 View Capacity Holdings via System (Gemini & MIPI)

  25. NTS Exit Reform Solution

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