Modification Proposal 0415 – Revision of the Gas Balancing Alert Arrangements

1. Modification Proposal 0415 – Revision of the Gas Balancing Alert Arrangements Transmission Workgroup 1 March 2012

2. Background • GBA has been in place for 5 years • The GBA sought to provide a signal to the Industry that a significant end of day NTS system imbalance is forecast. • GBA principally implemented to provide the industry with a signal for demand side response, where a significant gas flow deficit was forecasted either day ahead or within day. • Recent user feedback indicates that some aspects of the GBA signal may no longer be as effective as when initially introduced. • Timely review fits with SCR focus on Gas Deficit Emergency arrangements.

3. Objective of the Proposal • To improve the clarity of information, provided to the industry, relating to the status of the system during times of forecasted or actual significant system supply/demand deficit. The provision of improved information regarding the systems status at such times will facilitate Users’ in their determination of the appropriate level of response required. • To Improve National Grid NTS’s ability to efficiently and economically manage the system by enabling Users to respond to a forecasted or actual supply/demand deficit that can still be managed through market measures, thereby mitigating escalation into a GDE emergency.

4. What Is a Gas Balancing Alert (GBA) National Grid have a UNC obligation (V 5.9) to alert system users to a EOD supply/demand imbalance via a Gas Balancing Alert (GBA) A GBA has two triggers, day ahead (no discretion) or within day (discretion) Or Expectation on the market to respond by increasing supply or initiating a demand side reduction.

5. Improving the GBA definition for Day ahead and within day Issues • The prevailing UNC GBA provisions define how, and on what basis, both the Day Ahead and Within Day GBAs are issued, the term ‘GBA’ is adopted for both types of signal. • National Grid NTS considers that the prevailing single term, ‘GBA’, does not provide the industry with a sufficiently granular indication of the severity and time criticality of the forecast system supply/demand deficit. • Propose refining prevailing UNC GBA provisions by introducing twoseparately defined within day and day ahead signals.

6. Current Within Day GBA issues • No ability to withdraw a GBA (within day supply recovery) • Current process targets an EOD response only • No ability to signal a within day issue (physical linepack issue) potential GDE • Currently constrained to a within day alert

7. Proposed GBA revisions • Replace the current term ‘GBA’ with two discrete terms • Proposed replacement term for current Day Ahead signal: • [Forecast Deficit Notification (FDN)] • Proposed replacement term for current Within Day signal: • Gas Balancing Alert (GBA) • Introduce ability to withdraw GBA • Revise the trigger methodologies for the [FDN] and GBA: • a. Clarification the [FDN] Trigger Methodology and Update the UNC description of the trigger • Potential to define within the UNC the [Expected Available Supply Level] • b. Revision of the GBA Trigger Methodology • Introduction of the capability to initiate a GBA before the relevant Gas Flow Day

8. D-1 [Margins Notification] Methodology Transmission Workgroup 1st March 2012

9. D-1 Notification Methodology Components of Day Ahead notification Methodology • Expected Available Supply Level • Forecast Total System Demand (UNC Defined) Proposal to define the Expected Available Supply in UNC which incorporates (a) The expected delivery of gas from non storage supplies (NSS) as published in the National Grid Winter Outlook Document; and • (b) Qualifying deliverability from relevant storage facilities • Qualifying storage deliverability = 2 full Days of commercially available stock at maximum withdrawal rates. • The NSS value will be revised during the winter period and updated to reflect actual winter performance. • (NSS revisions could result in either increases or decreases to the NSS value)

10. D-1 13:00 D-1 Demand Expected Available Supply Level [Margins Notification] If Issue For > D-1 Notification Methodology Cont. Each day the Gas National Control Centre (GNCC) calculates the Expected Available Supply Level following receipt of storage stock data. At 13:00 (D-1) the Expected Available Supply Level will be assessed against the 13:00 D-1 Total System Demand Forecast. If demand is greater than supply (of any value) an external ‘Margins Notification’ will be issued via ANS.

11. D-1 & D GBA Methodology Transmission Workgroup 1st March 2012

12. GBA Methodology From the day ahead stage the GNCC will asses the end of day NTS system balance status taking into account the likely impact of the following areas and any other significant areas not listed • 1. PCLP • 2. Actual NTS Linepack • 3. Day ahead and within day NTS market prices • 4. NSS nominated profiles & actual flows/availability/behavior/direct communications • 5. Storage nominated profiles & actual flows/availability/behavior/direct communications • 6. Safety Monitor Levels • 7. European Storage Stock Levels • 8. Forecast Demand (D-1 & D) • 9. Short term Weather forecasts and CWV’s • A GBA will be issued (D-1 or D as appropriate) should the GNCC have sufficient supporting evidence to demonstrate a risk to the NTS end of day system balance. ANS will be used as the primary communication route.

13. GBA Methodology Cont. • Likely scenarios resulting in GBA (D-1 or D) • Severe weather conditions • Loss of NTS infrastructure (emergency maintenance) • Significant supply loss (trips/emergency maintenance) • European influences (Russia/Ukraine) • Global influences (Natural disasters impacting LNG cargo) • Unplanned significant events (terrorist attacks/unexploded bombs)

14. Next Steps • Agree proposal • National Grid develop legal text