Review of System Alerts

1. Review of System Alerts Transmission Workgroup 11th October 2011

2. Agenda • Introductions • Actions from Last meeting • Day ahead • Within Day • Information • GBA Next Steps • Firm Monitor

3. Review of the Gas Balancing Alert arrangements Transmission Workgroup 11th October 2011

4. 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. • Intent of review is to focus is on preventative measures, alerting the market to respond.

5. 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.

6. Day ahead Transmission Workgroup 11th October 2011

7. Day ahead National Grid perceived areas for review: • Refining prevailing UNC GBA provisions; • Renaming and splitting of the reference ‘GBA’ to separately defined within day and day ahead signals; • Aligning UNC with the calculation methodology undertaken by National Grid NTS during the GBA; • Introducing the ability for National Grid NTS to recall a GBA notice.

8. Issues with the Day Ahead GBA Trigger Level Methodology • The UNC definition for the day ahead GBA process implies that National Grid is forecasting total system supplies for the coming gas. • The current methodology is a view of total system supplies for the winter period, which is reviewed monthly. • Supply patterns are too volatile to accurately forecast day ahead.

9. Day Ahead GBA Trigger Level Methodology What should this include: • NSS calculation • LNG assumption • Beach • Norway • Interconnector • Storage assumption

10. LNG assumptions

11. Day Ahead Notification Issues to be addressed in respect of specific GBA type : • Day Ahead GBA; • rename to a ‘notification’; • aligning UNC with the NSS calculation methodology undertaken by National Grid NTS; • ability for National Grid NTS to recall notification. Any comments or additions?

12. Within Day GBA Transmission Workgroup 11th October 2011

13. Within Day GBA • The within Day GBA is triggered by an incident that will reduce supplies by 25mcm/d for the remainder of the gas day leading to an EOD supply demand imbalance • National Grid has discretion on within day GBA’s • Expectation on the market to balance EOD position (supply/Demand side response to GBA)

14. Within Day GBA issues • National Grid perceived areas for review: • Refining prevailing UNC GBA provisions; • No ability to withdraw a GBA; • Methodology constrains issuing of GBA. Consider reviewing methodology; • No ability to signal a within day issue (physical linepack issue) potential GDE. Additional issue identified from industry: • Change of name from an ‘alert’

15. Within Day GBA Issues to be addressed in respect of specific GBA type : • Within Day GBA; • Consider changing methodology; • Consider renaming; • Provide ability for National Grid NTS to recall a GBA notice. Any comments or additions?

16. Within Day Imbalance Transmission Workgroup 11th October 2011

17. Max Daily Pressure Min Daily Pressure Change in Daily Linepack Change in daily linepack Pressure / Linepack Time 06:00 06:00

18. Within-Day Linepack Variance

19. Yearly Profile Comparison

20. Increase of Occurrence

21. Within Day Imbalance Issues to be addressed in respect of specific GBA type: • Within Day Imbalance; • Inform the market of the issue; • National Grid take actions to resolve the issue. Any industry concerns with proposed approach?

22. Additional Information Transmission Workgroup 11th October 2011

23. Information aim • Improve understanding and monitoring of extent of system issue and how the market is responding; • National Grid NTS – consider what information would help the market to initiate timely response; • Industry information – consider what information would aid system operation in times of high system stress.

24. Information Provision Potential areas for improved information from the SO: • Day ahead GBA message to include volume above trigger level: e.g. GBA for 29 December - 7mcm above the trigger level • Breakdown of NSS assumption • Narrative on rationale for any within winter changes in NSS • Notification of within day system critical issue e.g. time of system issue is 18:30 (or GBA issued for period 15:00 – 22:00). Should this be linked to the GBA?

25. Nomination imbalance

26. Notes on graphs • In addition to Actual linepack and PCLP, linepack graphs show the total net shipper nomination imbalance, the variation of PCLP from the opening linepack figure and a variation of PCLP from the opening which is adjusted to account for variations in demand (i.e. closer to the DFN impact on PCLP) • The shipper nomination graphs show positive and negative imbalances but only include figures for shippers with an imbalance greater than 1 mcm at 06:00 on the day in question.

27. 8th August 2011

28. 8th August 2011

29. 8th August 2011 High Actual linepack swing (16mcm) – notable as during summer Low opening PCLP (318.5) driven by low opening shipper nominations

30. 20th December 2010

31. 20th December 2010

32. 20th December 2010 Relatively High Actual linepack swing (18.6mcm) D-1 GBA issued for following day at 18:25

33. Observations • On the 8th the imbalance was entirely corrected by the market, without direct intervention from National Grid. • On the 20th, on the day we of issued a Day Ahead GBA, there appears to be a move towards balance in shipper nominations coincident with the issue of the GBA, even though the GBA relates to the following gas day.

34. 18th August 2011 High Actual linepack swing (25.5mcm) – particularly notable as during summer but also in top 10 of last 10 years Low opening PCLP (318.3) driven by low opening shipper nominations

35. 18th August 2011

36. 18th August 2011

37. 19th December 2010 Relatively High Actual linepack swing (18.6mcm) D-1 GBA issued for following day at 18:25

38. 19th December 2010

39. 19th December 2010

40. 21st December 2010 Moderate Actual linepack swing (14mcm) High opening PCLP (318.5) driven by high opening shipper nominations

41. 21st December 2010

42. 21st December 2010

43. Observations • On the 18th large proportion of the nomination imbalance was attributable to two shippers, both of which corrected this before 10:00 • On the 19th, on the day we of issued a Day Ahead GBA, there appears to be a move towards balance in shipper nominations coincident with the issue of the GBA, even though the GBA relates to the following gas day. • On the 21st, there is a similar marked change in the balance of nominations, when there was no GBA issued. • On the 21st, a single shipper accounts for a large proportion of both the positive and negative imbalances, under different trading names, leaving a relatively small net imbalance overall.

44. GBA Next Steps Transmission Workgroup 11th October 2011

45. GBA Next Steps… • Further develop ideas • Present strawman proposal(s) to the industry • Raise Modification Proposal

46. Firm Monitor Transmission Workgroup 11th October 2011

47. Feedback from industry meetings • Mixed feedback from industry • Not used, so happy with it being removed • Useful indicator of storage ‘requirement’ • No suggestions on what information would be useful • Latest update for Firm Monitor space requirement is 94%

48. Firm Monitor Next Steps… • Further develop ideas • Present strawman proposal(s) to the industry • Raise Modification Proposal

49. End Transmission Workgroup 11th October 2011