Accuracy of CV determination systems for calculation of FWACV

1. Accuracy of CV determination systems for calculation of FWACV Dave Lander

2. Overview • Based on work previously carried out October 2006 • Examines how consumers gas bills are estimated • Examines how the accuracy of all of the inputs into the calculation affects the overall accuracy of the gas bill • Poses questions about: • fairness • the appropriate level of acuracy Accuracy of CV determination systems - Page 2

3. Introductory concepts: error, uncertainty, bias... • Uncertainty • "Parameter that characterises the spread of values that could reasonably be attributed to the measurand." • Range and an associated probability • Error • Measured result minus a “true” value • Bias • Mean value of a distribution of errors. • Associated with an agreed set of conditions (each showing an error) Accuracy of CV determination systems - Page 3

4. The Charging Area CV • Charging area CV is calculated as the Flow weighted average CV • Subject to a 1 MJ/m3 cap • Uncertainty in FWACV arises from: • Uncertainty in measurement of CVs and flows • Variation in the CV of the sources of gas Accuracy of CV determination systems - Page 4

5. The Charging Area CV • Consumer A receives high CV gas “all the time” • For him the FWACV is biased • Consumer B receives low CV gas “all the time” • For him the FWACV is biased • FWACV delivers zero bias in charging area energy • CV cap limits the exposure of consumer B B A Accuracy of CV determination systems - Page 5

6. The Consumers’ Energy Bill • Energy = quantity of gas x representative calorific value • Quantity is expressed as volume at reference conditions • Consumer: • actual metered volume x conversion factor • conversion factor is provided in the Regulations • Representative calorific value represents the CV of the gas seen by the consumer • Consumer: • average of charging area CVs over the billing period • determined through use of approved CVDDs Accuracy of CV determination systems - Page 6

7. Sources of Error, bias and Uncertainty • FWACV • Daily volumes at Network Offtakes • Error, bias in daily volumes • CVs at Network Offtakes • Error, bias in CVs • Actual gas quality received • Variation in gas quality • “Location” uncertainty • Quantity of gas • Error, bias in domestic meter • Error, bias in conversion factor B A Accuracy of CV determination systems - Page 7

8. Estimating error, bias and uncertainty • Principles suggested by Marcogaz Energy Measurement Working Group • Provides guidance on implementation of OIML Recommendation “Gas Metering” • Estimates errors and bias in each component of measurement, which are then combined arithmetically to provide and overall bias in energy measurement • Estimates uncertainties in bias for each source, which are then combined in quadrature to provide an overall uncertainty in bias. • Sources: measurement instrumentation; fixed factors; representative CV calculation Accuracy of CV determination systems - Page 8

9. Estimating error, bias and uncertainty • Domestic meter bias and uncertainty • Fixed factor bias and uncertainty • Compare with average and variance in pressure, temperature, altitude • Matrix of FWACV scenarios: • Uncertainty in CV determination at NTS Offtakes • 0.125%, 0.25%, 0.5% (i.e. 0.05, 0.10, 0.20 MJ/m3) • Uncertainty in NTS offtake metering • 1%, 4% Accuracy of CV determination systems - Page 9

10. Results: Consumers’ energy bills • Current situation • MPE in CV determination is 0.25% • MPE in Offtake volume metering is 1% • Overall bias is close to zero (-0.081%), because: • Daily CVs and volumes, and hence FWACV, assumed to be unbiased • Small bias arises from assumptions in fixed factor in the Regulations • Expanded uncertainty in bias is 5.8% • 61% of variance arises from temperature variation • 25% of variance arises from CV variation (i.e. 1 MJ/m3 cap) • 9% of variance arises from domestic meter • 0.06% of variance arises from FWACV uncertainty Accuracy of CV determination systems - Page 10

11. Results: Consumers’ energy bills • Current situation • MPE in CV determination is 0.25% [0.5%] • MPE in Offtake volume metering is 1% • Overall bias is close to zero (-0.081%), because: • Daily CVs and volumes, and hence FWACV, assumed to be unbiased • Small bias arises from assumptions in fixed factor in the Regulations • Expanded uncertainty in bias is 5.817% [5.822%] • 61% of variance arises from temperature variation • 25% of variance arises from CV variation (i.e. 1 MJ/m3 cap) • 9% of variance arises from domestic meter • 0.06% of variance arises from FWACV uncertainty [0.22%] Accuracy of CV determination systems - Page 11

12. Points for discussion • Overall, consumer billing is largely unbiased, provided assumptions about CV measurement and domestic and offtake metering are appropriate. (This can be part of a specification.) • Some consumers experience bias and are under- or over-billed, largely because of temperature CV variation. • This is as fair as the current system can get; suppliers and gas transporters don’t gain. The cap limits the exposure of the worst affected (although arguably at the expense of bias in LDZ energy). • Doubling the uncertainty in CV determination at NTS Offtakes has little impact. • Uncertainty in CV determination at small entry points is unlikely to have significant impact (although yet to be modelled). • Cheap and cheerful CV measurement in Smart meters? Accuracy of CV determination systems - Page 12