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Exit Reform Review

Exit Reform Review. Transmission Workstream 07 January 2010. Agenda. Overview of 2009 processes Review of 2009 applications Potential impacts of 2009 applications Other issues / potential areas for review Discussion 2010. Overview of 2009 processes. Application Window &.

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Exit Reform Review

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  1. Exit Reform Review Transmission Workstream 07 January 2010

  2. Agenda • Overview of 2009 processes • Review of 2009 applications • Potential impacts of 2009 applications • Other issues / potential areas for review • Discussion • 2010

  3. Overview of 2009 processes

  4. Application Window & July Application Reduction Window Window Invitation Enduring Annual Flat allocations Letter Capacity Applications for Y+4, Y+5, Y+6 NTS to DN Potential DNO DNO Applications for Pressure adjustment of Flex and Pressures Applications Applications April May June July August September October Ad hoc Appointment of Enduring Annual Applications Booking Agent Flat Capacity and ARCAs Reduction Window Flex Initialisation of Capacity information & MSPOR Values NTS provides Flex and publication DN deadline for Pressure indications to DNOs begins accepting Pressure Applications High level overview of the 2009 processes Contact Details

  5. 2009 process overview • NTS – DN pressure applications • 2 reductions requested by NTS, requested by NTS, 1 accepted • Initialisation • Complex calculation process • 8 queries received from users but no changes required • Ongoing process for ARCAs signed during transitional period • MSPOR • All users notified of relevant MSPOR values • Specific point made where MSPOR would potentially limit firm release • Continuing process for revisions being made at sites and sites modified or added to license via a section 23 process

  6. 2009 process overview (2) • Application window • Section 23 process run in advance • Most requests received in the last 2 days of the window • Why was this, is the window appropriate? • Learning points for next years communications / training • Who to, when, documentation, within window support • OCS process for DNs • Compressed timescales • Allocation process • No issues resulting

  7. 2009 process overview (3) • Flex publication • Began on time • Some amendment to definition may be sensible • Ad-hoc process • 1 application received so far, but subsequently withdrawn

  8. 2009 process review – key learning points • Communications need to be focussed on the people who will be carrying out the processes / using the systems • Users need easy access to the supporting info that they want in a single place – views ? • Strong links required between new connections processes for new sites and the capacity application process to ensure issues are managed in tandem

  9. Review of July 2009 applications NTS Direct Connect / Interconnector / Storage /CSEP Offtakes: • 35 Requests received from 23 Shippers • 23 Increase Applications & 12 Reduction requests • Aggregate Increase of 833.9GWh/d • 231.8GWh/d within Baselines • 602.1GWh/d Incremental to baselines • Aggregate Reduction of 6.3GWh/d • 1 Reduction Application Rejected (Due to a reduction of less than 100,000kWh/day)

  10. NTS (DC) Offtake Capacity Position

  11. What happened in the July application window - summary NTS/LDZ Offtakes: • 51 Applications received • 40 Increase Applications & 11 Reduction Applications • Aggregate Increase of 640.1GWh/d • 417.7GWh/d within Baseline (411.GWh/day due to baseline re-jig) • 222.4GWh/d Incremental to baseline • Aggregate Reduction of 139.2GWh/d Please Note: • All data shown in this presentation is for Y+4 only. Only 3 very slight increases were received for Y+5 & Y+6 (totaling ~1-2GWh/d) that had a minimal impact on the overall position and therefore, these years were excluded in order to provide more clarity in the graphs

  12. DN Offtake Capacity Position

  13. Impact of 2009 requests on NTS obligations

  14. Current 2012/13 Peak Demand Forecast 2009 National Grid forecast 1:20 Peak Day Demand for Gas Year 2012/13

  15. Current Capacity Holdings Current 2009/10 Exit Capacity Entitlements. Includes OCS Allocations and Firm Capacity Holdings

  16. Initialised Enduring Exit (Flat) Capacity Initialised Enduring (Flat) Exit Capacity (Based on 2007/08 Firm & Interruptible Capacity)

  17. Existing Enduring Exit Capacity Obligations Enduring (Flat) Exit Capacity Baselines. Initial Enduring period Exit Capacity Obligations

  18. Enduring Aggregate Capacity Post Application Enduring (Flat) Exit Capacity Allocation: Total Sold capacity following 2009 Enduring Application Window Total Enduring (Flat) Exit Capacity

  19. New Enduring Obligation Enduring (Flat) Exit Capacity Baselines + New Incremental allocated in 2009 Application Window

  20. Increased capacity obligation following the 2009 application process +857 GWh/day Increase in Existing Enduring Obligation

  21. National Grid’s thoughts • An increase NTS Exit (Flat) Capacity above the enduring baseline level represents a change in the risk profile – funding for which was not provided in the last PCR. • Baselines have moved further away from the physical reality of the system and demand • Is this an issue for the industry? • Where NTS has identified a specific issue NTS have requested and will continue to request revenue drivers for sites • However revenue drivers only mitigate the risk associated to specific sites. • Should other potential projects come forward then NTS may request additional revenue drivers

  22. Potential areas for review

  23. Areas for additional consideration (1) • Ability for Users to make reductions where they hold less than 100,000kWh (may be for initialised only) • Interaction between Ad-Hoc and Annual processes - variable unsold amounts within year, release the lowest value for Annual NTS Exit (Flat) Capacity (Y+1 to Y+3). • Release of Non Obligated Annual NTS Exit (Flat) Capacity (Y+1 to Y+3). • Move the latest Transfer time from 04.00 D to 03.00 D • Clarify B5.2.5 – Users unable to withdraw a trade if placed for a single day and notified to National Grid NTS. Should be all trades once notified to National Grid NTS (once Transferee and Transferor have both submitted)

  24. Areas for additional consideration (2) • DN flow swapping • Flow swapping process in place, commercial impacts need to be considered • Removal of Flexibility Tolerance for the calculation of Flexibility utilisation, could be specifically for the publication of data. • Clarity on Registered User for the Overrun User process. • Review of DN adjustment window • Start DN adjustment process earlier? • Accept ad-hoc requests for later than Y+4, where earlier tranche(s) are earlier than Y+4?

  25. Areas for additional consideration (3) • Review Overrun Deeming process, for example…. • Should the User be deemed earlier than Y+4 if there is unsold obligated ? • What if the User Overruns in consecutive years?

  26. How should these be taken forward? • Next steps…. • Views / thoughts?

  27. 2010 • Deliver Phase 1 systems • First Annual Release (Y+3) • All the processes from 2009 are repeated • Exit substitution / baseline revision discussions begin (first workshop 27th Jan 2010) • Continue to work towards Phase 2 systems delivery • Continue User communications / training • Linepack Information Provision (1/10/10)

  28. Discussion • Concerns/issues/questions? • Any other areas wish to discuss?

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