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Kevin Shiels Gas Section Ofreg

Kevin Shiels Gas Section Ofreg. Energy Forum 12 March 2004. Today’s Topics. 1. Background 2. Current Developments in NI 3. All-island gas issues. Irish gas transmission network. Moffat. Coolkeeragh. BGE. SNIP. Twynholm. North west. Phoenix. Corrib. South North. IC2. IC1.

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Kevin Shiels Gas Section Ofreg

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  1. Kevin ShielsGas SectionOfreg Energy Forum 12 March 2004

  2. Today’s Topics 1. Background 2. Current Developments in NI 3. All-island gas issues

  3. Irish gas transmission network Moffat Coolkeeragh BGE SNIP Twynholm Northwest Phoenix Corrib South North IC2 IC1 Loughshinny & Gormanston Galway Inch

  4. High Pressure Pipelines Entry Points ROINI 1850 km -135 km SNIP -34 km Phoenix -112 km BGE NW -140 km BGE SN -IC 1& 2 -SNIP -Inch -(BGE SN Pipe ‘06) -(Corrib) 1. Background

  5. 1. BackgroundGas Distribution/Supply in NI to date • Phoenix - Sole active downstream supplier in NI (Greater Belfast area). • Grown from zero customers in 1996 to 66,000 now. • Licence issued by Government in 1996 allowing exclusive rights in gas distribution and supply. • Gas supply full market opening under existing licence arrangements on 1 January 2005. • Other licence holder in Greater Belfast - Energia.

  6. 2. Current Developments in NITransmission 1. “Postalisation” of gas transmission charges from October ‘04: - One single set of exit charges for taking gas from the NI Transmission network. - Postalised cost base includes all NI Transmission related costs. 2. NW Pipeline (BGE NI) - complete in Oct 2004. 3. SN Pipeline (BGE NI) - complete in 2006. Greater opportunity for “all-island” synergies. 4. Asset refinancing - lower costs for both gas and electricity customers.

  7. 2. Current Developments in NIDistribution 1. - Ongoing development in Greater Belfast area (increasing market share for gas). - Full opening to competition in January 2005. 2. - New Distribution and Supply licence: negotiation with BGE (NI) at advanced stage. - Distribution/Supply in the major towns along the routes of the NW and SN pipelines.

  8. 3. All-islandAll-island Gas Issues Some common issues for NI & RoI • Desire by policymakers to consider “all-island” gas issues. • Security of Supply considerations. • Price! • At the end of a lengthening supply chain. • EU Legislation/Directives.

  9. 3. All-islandBut many differences • Transmission structures: • ownership structures. charging:- ROI entry/postalised exit NI fully postalised Capacity/commodity • network rules. • Maturity of development (distribution & supply) - 450,000 customers v’s 66,000. • Legislative, regulatory, operational, safety, financial, etc.

  10. 3. All-island“Harmonised” Transmission tariffs • Joint Steering Group - Request to Regulators: • consider and report back on the cost and benefits of harmonising gas transmission tariff structures. • CER/NIAER Joint Study: • Options, costs and benefits of harmonising gas transmission tariff structures on an all-island basis having regard to any legal, regulatory or operational obstacles to achieving an optimum solution. • Completion May 2004. • Time Horizon: 2007/08 - 10 years.

  11. 3. All-islandSome Good Questions • Does having different gas tariff structures matter? If so: • What type of tariffs are optimal in an all-island regime: entry/exit, fully postalised, zonal? • How should tariffs be calculated? - time horizon; capacity/commodity. • How should flows through the new SN pipe be tariffed? • To what degree is an optimal harmonised regime deliverable on the ground?

  12. 3. All islandStudy into transmission tariff structures: • Identify existing commonalities and differences. • Identify benefits of harmonisation and their distribution. • Identify obstacles to harmonisation. • Identify any costs of harmonisation and their distribution. • Identify options for or alternatives to harmonisation.

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