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Surrender and LT.UIOLI Cash Flows in Gemini System

This document discusses the surrender and LT.UIOLI cash flows in the Gemini system, as well as the proposed changes and contingency arrangements. It also covers topics such as bundled and unbundled auctions, minimum surrenders, and PRISMA feedback.

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Surrender and LT.UIOLI Cash Flows in Gemini System

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  1. EU Workgroup – Mod 500 WG(4) – 16th September 2014

  2. Surrender Cash Flows

  3. CMP cash flows forSurrender & LT UIOLI - Proposal Surrendered and LT UIOLI offered in an auction will have their own quantity holders in the Gemini system. This means revenue received from Surrenders/LT UIOLI can be identified and treated separately from standard baseline or incremental revenue sales. Same principles applied to CMP surrender and LT UIOLI as are applied to TnT. Costs/Revenues will not be counted in National Grid’s SO or TO actual or maximum allowed revenue. Also will not be included in Constraint Mgt Incentive.

  4. CMP cash flows forSurrender & LT UIOLI - Proposal • Debit paid by a User will be a relevant revenue to capacity neutrality. • Credit received by a User will be a relevant cost for capacity neutrality. • User Debit ≥ User credit  zero impact or net revenue to neutrality. • Any net revenue will be redistributed to community via neutrality mechanism. • This means net revenue from an Exit transaction will be redistributed through neutrality (based on entry holdings). • NG will always be cost/revenue neutral. • NG will monitor Exit costs/revenues going through neutrality.

  5. Surrender Price

  6. Slide presented to WG(1) • Auction results come back from PRISMA. • Allocate bundled results first: • Unsold > Surrenders > LT UIOLI > Oversubscription • Then allocate unbundled results: • Remaining unsold > remaining surrenders > remaining LT UIOLI > remaining oversubscription • This way all unsold must be used before re-allocating surrenders; all surrenders before LT UIOLI; and all LT UIOLI before non-ob. - Bundled bid demand - Unbundled bid demand

  7. For 1:2 situations - Bundled bid demand – bundled auction A (5p) - Bundled bid demand – bundled auction B (3p) There are 2 possible clearing prices for the bundled auctions. This means that, if the Surrender is re-allocated to meet demand from a bundled auction, there are 2 possible prices that can be credited to the surrendering shipper,.

  8. Surrender - minimum quantities

  9. Minimum Surrenders – PRISMA feedback Fundamental functional changes New ‘conditionally available’ type of auction and process for handling the surrenders would have to be developed. Enhanced Surrender functionality (and possibility of PRISMA storing Surrender data). Auction publishing would be amended Process would need a lot of multi-lateral discussion e.g. Impact on adjacent TSO if Available capacity dropped. Would auctions be re-run without conditional amount, if the minimum amount is not met. Could impact timetable for auctions. Long term auction could jump from undersell back to oversell if a Surrender offer dropped out. Non-competing auctions could move into competition. Competition tree algorithm is already complex

  10. LT UIOLI Guidance Document

  11. LT UIOLI Guidance Document v2.0 draft

  12. Contingency

  13. Background - Existing Arrangements • Section U – UK Link • U 6.1.1 b) – Code Contingency is specifically defined as an event or circumstance affecting UK Link. • PRISMA not part of UK Link • Where a Code Contingency continues for a certain period of time then it may be a Class A Contingency • Under Class A Contingency then standard arrangements under TPD may be amended.

  14. Class A Contingency (existing) - Capacity • Section B 2.16 • 2.16 a) Where…no capacity allocations of Daily NTS Entry Capacity in respect of a relevant Day are made…the System Entry Overrun Charge payable by Users…will not apply. • 2.16 b) and c) relate to Contingency Arrangements for relevant processes (Registration, Surrender, Trading). NG still require system (Gemini) access to enact these arrangements on behalf of shippers. • PRISMA is a web based system so not possible for NG to have system access if other parties do not.

  15. Contingency Arrangements • Wait and See approach initially; • Do not declare contingency unless outage is prolonged. • If Gemini offline, and Code Contingency declared: • NG can manually upload available capacity to PRISMA. • From shipper perspective auctions will continue. • If PRISMA offline: • Long term auctions will be held when system back online. • Short term auctions will recommence when system back online. • Existing Class A Contingency under 2.16 a) to be applied if outage is prolonged.

  16. Recap

  17. Summary of Topics covered so far Long Term Auctions – Ascending Clock (WG1 & 3) Short Term Auctions – Uniform Price (WG1 &3) CAM auction products (WG1 & 3) Joint Booking Platform – PRISMA (WG1 & 3) 1:2 situations & Competition (WG1 & 3) Available Capacity & Bundling (WG1) CMP: Surrender (WG1 & 3) CMP: LT UIOLI (WG1) Transfers (WG1 & 3))

  18. Summary of Topics covered so far (2) Scalebacks & buybacks (WG2) Voluntary Bundling (WG2) Transitional Arrangements (WG2) Mod 3.13 – Further References in UNC (WG2) Tariff Arrangements – (WG4)

  19. Summary Changes to UNC Modification Proposal 0500 19

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