Ofgem Information Request on availability of NTS Exit Flexibility Capacity

1. Ofgem Information Request on availability of NTS Exit Flexibility Capacity Ritchard Hewitt Gas Code Development Manager National Grid Transmission 7th February 2008

2. Background • Development of 0116v – extensive analysis of Flat and Flex products. • Analysis in 2006 presented to EOWG in June confirms 22mcm available flexibility. • Physically Firm product suitable for DNO demonstration in their Safety Case. • Ofgem Information Request received 1st Nov 07 • Extensive analysis (175 man days) focussed on Flex • Information Request asks eight questions • Subsequent slides look at the answers given to each question in turn.

3. Core assumptions • Size of Network • Based on current 10YS • Gas Days - peak, Day 1, and Day 68 • Gas Years – 2007/8, 2010/11, and 2016/17 • Distribution of Supplies • Balanced • Varying levels of IOG supplies • Heavy East Coast Supplies • Delivery Profile • Front and backloading • Geographic distribution of Demand • Balanced

4. Ofgem Question One • How much flexibility capacity there will be on the NTS based on National Grid Transmission’s current investment plans? • Answer – Depends on the assumptions made. However scenarios currently indicate 22mcm.

5. Ofgem Question Two • How this level of flexibility capacity would change if there are any changes in these plans? • Answer: • Changes to Core assumptions including: • Changes in IOG flows in proportion to demand level • High East Coast Flows relative to demand level would reduce available flex

6. Ofgem Question Three • National Grid Transmission’s assessment of the demand for flexibility capacity from the DNs, storage sites and large Users • Answer: GDNs: • Flexibility Capacity Request from GDNs – 2007 OCS Process • Final Flexibility Capacity Allocation to GDNs – 2007 OCS Process * = The allocation for 2011/12 is indicative only and at this stage only reflects NGG’s commitment for 2010/11

7. Ofgem Question Three • National Grid Transmission’s assessment of the demand for flexibility capacity from the DNs, storage sites and large Users • Answer: Other Loads • Increasing trend at CCGTs due to increase in offtakes over next 10 years (12GW) and increase in trend of usage. • Potential effect of Renewables on Gas plant load profiles • Storage effect could be both positive and negative • Recent trends in Flex usage give an indication of increased use.

8. Ofgem Question Four • National Grid Transmission’s assessment of what would reduce or increase NTS flexibility capacity • Answer: • The geographic balance of Demand and of Supply • Uniformity of flows at entry • Change to pressure commitments

9. Ofgem Question Five • The likely development of the availability of flexibility capacity on a regional and zonal basis. • Answer: • Milford Haven pipeline should release more flex capability in South Wales. • Reduced Flows from St Fergus could release more flex in Scotland • Net position of approximately 2mcm between 2007 and 2016/17

10. Ofgem Question Six • The potential causes, if any, of future scarcity of flexibility capacity • GDN OCS Bookings • Aggregate 2007 OCS requests for 2011/12 are beyond current assessment of available Flexibility.

11. Ofgem Question Seven • The probability, location and potential timing of any such scarcity developing in practice. • Answer: • Most recent OCS process would indicate scarcity in 2011/12.

12. Ofgem Question Eight • What Actions would National Grid Transmission take ... were a flexibility capacity constraint to arise …... In particular, what would the magnitude of the consequences for end users …. be should the risk(s) materialise? • Answer: • In Planning timescales • Scale back requests by an equal proportion • In Operational timeframe • Require adherence to NExA terms • Interruption of loads • OCM “locational” actions • Emergency Interruption/load shedding

13. Questions