Linepack ‘Park and Loan’ Quantity - Influencing Factors

1. Linepack ‘Park and Loan’ Quantity - Influencing Factors Review Group 291 – July 2010

2. Summary • Pre-assessment of available quantity for park and loan is complex. • Competing needs for flexibility and contingency impact on the operating range of linepack. • This motivates discretionary release, with appropriate incentive.

3. Operational Range of Linepack Flexibility Maximum operating pressures Demand / supply pattern Linepack Flexibility NTS set-up Flexibility + contingency Contractually agreed pressures day

4. System Flexibility • NTS has historically been built to transport gas efficiently, based on flat supply and demand, within a range of operating pressures. • System flexibility is inherently a “by-product” of operating the NTS within a range of pressure limits. • Current “limits” of flexibility entirely dependent on the daily NTS setup and the supply/demand pattern and therefore quite complex to define and model outer-boundary and maxima of available flexibility. • National Grid is incentivised to minimise day-on-day linepack changes but has no incentive on within-day linepack ‘release’ or ‘use’

5. Supply B Supply A 200km 50km Offtake Flow Pattern Volatility – “Time of flight” The ability to profile energy within day across a number of entry/exit points whilst maintaining an energy balance in aggregate across the day. • Supply patterns responding to demand and market changes. • Plant issues and Portfolio balancing. • Price-responsive supplies and demands. Flows from Supply A switch to Supply B. Linepack levels at Offtake will drop due to the inherent lag of flow from Supply B taking time to reach the Offtake

6. Removing Linepack from NTS Flow Average flow (1/24th rate) ReplenishingLinepack to NTS Time Single Entry/Exit Point Flexibility The ability to profile an entry or exit flow above and below a flat rate. • DN offtake profiles. • Power station changes driven by electricity market interaction. • Storage and interconnector within-day switching. • Within-day entry flow fluctuations driven by demand changes and nomination changes. Example: DN Offtake Flows vary within day due to domestic demand

7. Max Daily Pressure Min Daily Pressure 22:00 06:00 06:00Start of Day (2) NTS Flow, Pressure & Flexibility ReplenishingLinepack to NTS Removing Linepack from NTS DN Offtake Flow Flow profile varying about the 1/24th rate Average flow (1/24th rate) Increasing Linepack Usage Time Minimum pressure at point where depletion of linepack ceases Finite limit of flexibility linked to compression/ flow rates required to return to start of day pressure Pressure Increases the severity of NTS pressure drop Time

8. Example Day – 9th January (Actual Data)

9. Operational Range of Linepack Flexibility Maximum operating pressures Compressor trip risk Linepack Flexibility Contractually agreed pressures day

10. Operational Range of Linepack Flexibility Maximum operating pressures Compressor trip risk Within-day exit flexibility Linepack Flexibility Contractually agreed pressures day

11. Operational Range of Linepack Flexibility Maximum operating pressures Compressor trip risk Within-day exit flexibility Within day entry flexibility Linepack Flexibility Contractually agreed pressures day

12. Within-day Linepack Utilisation Within-day Max-Min Range of NTS Linepack 30 day rolling average

13. Operational Range of Linepack Flexibility Maximum operating pressures Compressor trip risk Within-day exit flexibility Within day entry flexibility Linepack Flexibility Information uncertainty,EOD imbalance Contractually agreed pressures day

14. Day-to-day linepack change

15. Within-day PCLP swings PCLP = Opening linepack + System Inputs (Daily Flow Nominations and Storage Flow Nominations) – System Demand (Offtake Profile Notifications) This graph shows ranges of hourly PCLP values during the gas day.

16. Operational Range of Linepack Flexibility Maximum operating pressures Compressor trip risk Within-day exit flexibility Within day entry flexibility Linepack Flexibility Information uncertainty,EOD imbalance Supply loss risk Contractually agreed pressures day

17. Example Day – 4th January (Supply Loss)

18. 4th January - Continued

19. Operational Range of Linepack Flexibility Maximum operating pressures Compressor trip risk Within-day exit flexibility Inter-Day Linepack ‘park and loan’ Linepack Flexibility Within-day entry flexibility Information uncertainty,EOD imbalance Supply loss risk Contractually agreed pressures day

20. Release volume • Competing requirements for flexibility and contingency, and varying conditions day to day, determines the release will be discretionary if the quantity is to be maximised. • The risks and rewards inherent in linepack release leads to an incentivised regime.