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Development of Firm Monitor & GBA

Transmission Workgroup – 1 December 2011

2

Agenda

Firm Monitor

GBA

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Development of Firm Monitor

Transmission Workgroup – 1 December 2011

4

Firm Monitor

National Grid has an UNC obligation to:

Calculate and publish Preliminary Firm monitor info in May

Calculate and publish “Final” Firm monitor info by October

The Firm Monitor represents the level of storage required to support all “firm” demand in a severe (1 in 50) winter

It is published for information only

5

Why Change?

Gas Year 2011/12: all DN connected load classified as Firm

Subsequent increase in the level of storage

space to meet firm load

Increase in space requirement from 32% in 2010/11 to

94% in 2011/12

Change discussed at the Gas Forum, DSWG, the Small

Suppliers Forum, Transmission Workgroup and with

specific Shippers

6

Options

Do nothing

Firm Monitor space requirement will rise above 100% sometime (2012/13?)

Will be breached each year

Change calculation methodology

What demand do we use?

Remove requirement

Not used by majority of industry

Storage information is published on the web

7

Proposed Option

Remove requirement to publish firm monitor (in UNC).

Requirement for safety monitor will remain

Next Steps

Aim to have change in place for winter 2012/13

Raise modification in January 2012

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Development of GBA

Transmission Workgroup – 1 December 2011

9

What Is 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.

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)

10

D-1 and Within Day GBA specific issues within scope for review

Issues to be addressed in respect of specific GBA type :

Day Ahead GBA;

rename to a day ahead notification;

aligning UNC with the calculation methodology undertaken by National Grid NTS during the GBA;

ability for National Grid NTS to recall a GBA notice.

Within Day GBA;

ability for NGG to signal a within day issue;

review trigger methodology;

ability for National Grid NTS to recall a GBA notice.

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Ability to Signal Within Day Issue

Transmission Workgroup - 1 December 2011

12

Within Day Issue

-5

-4

-3

-2

-1

0

1

2

3

4

5

06:00

07:00

08:00

09:00

10:00

11:00

12:00

13:00

14:00

15:00

16:00

17:00

18:00

19:00

20:00

21:00

22:00

23:00

00:00

01:00

02:00

03:00

04:00

05:00

HV

OL

(m

cm)

315

320

325

330

335

340

345

350

355

Lin

epac

k (m

cm)

Interconnector Exports ldzofftake ntsindustrialntspowerstation Storage injection Interconnector ImportsStorage Withdrawal Terminal supplies Actual Linepack

?Safety Limit

13

Within-Day Linepack VarianceWithin day max-min range of NTS linepack (mcm)

0

2

4

6

8

10

12

14

16

18

20

Apr

-01

Aug

-01

Dec

-01

Apr

-02

Aug

-02

Dec

-02

Apr

-03

Aug

-03

Dec

-03

Apr

-04

Aug

-04

Dec

-04

Apr

-05

Aug

-05

Dec

-05

Apr

-06

Aug

-06

Dec

-06

Apr

-07

Aug

-07

Dec

-07

Apr

-08

Aug

-08

Dec

-08

Apr

-09

Aug

-09

Dec

-09

Apr

-10

Aug

-10

Dec

-10

Apr

-11

Aug

-11

In d

ay r

an

ge

of

linep

ack

(mcm

)

Rolling 30 day average

14

Yearly Profile Comparison

Comparison of within day max-min range of NTS linepack (mcm)

0

2

4

6

8

10

12

14

16

18

20

Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

In d

ay r

ange

of

linep

ack

(mcm

) .

Rolling 30 day average swing 2001/2 Rolling 30 day average swing 2010/11

15

Within Day Warning Conclusions

Increasing volatility in within day linepack variation

Market is not incentivised to manage within day issues

National Grid are best placed to manage within day issues

Could inform the industry that NGG will be taking action to resolve within day issue

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GBA Trigger Methodology

Transmission Workgroup - 1 December 2011

17

The GBA trigger level is National Grids view of total system supply for the winter periodConsists of NSS and Storage

Day Ahead GBA Trigger Level

1. Non Storage Supplies (NSS)

A view of likely NSS supplies are produced by National Grid in advance of the winter period and are published externally in the Winter Outlook document.

NSS supplies are assessed monthly throughout the winter period as actual supply data is recorded. Any significant deviations away from the prevailing NSS assumption can reduce or increase the NSS value, leading to changes in the GBA trigger level.

2. Storage Supplies

Any storage facility with two or more days deliverability, at assumed maximum rates, will be included in the GBA day ahead trigger level.Storage sites without GBA qualifying deliverability will not be included in the GBA trigger level, and the trigger level will be reduced by the maximum deliverability for those sites.

We believe this process is both Transparent & Predictable.

18

Maintain current methodology

Initial trigger is an incident that will reduce supplies by 25mcm/d, leading to an EOD supply demand imbalance

Issuing of a GBA is at NGG discretion

Supply trigger only, no demand shock trigger

Does not take into consideration start of day position

Within Day GBA Trigger Methodology - Options

19

Within Day GBA Revised Trigger Methodology – Options

Full NGG discretion

Pros

No restrictive trigger (25mcm loss of supply)

Additional information to the industry on ‘why’

Cons

Methodology for determining a GBA is opaque

20

Within Day GBA Revised Trigger Methodology – Options

Extend day ahead methodology to within day

Pros

No restrictive trigger (25mcm loss of supply)

Provides a more real-time view of supply

Common methodology across timescales

Cons

Difficulty in determining the level of supply

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Additional information provision

Transmission Workgroup - 1 December 2011

22

Additional information provision

Publication of NSS breakdown with supporting notes when changed

Publication of projected EOD supply deficit

Additional information via ANS message

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Next Steps

Transmission Workgroup - 1 December 2011

24

Day ahead & Within Day GBA

Proposed changes :

Day Ahead GBA;

rename to a notification;

aligning UNC with the calculation methodology undertaken by National Grid NTS during the GBA;

ability for National Grid NTS to recall a GBA notice;

Publication of additional information.

Within Day GBA;

propose new trigger methodology;

ability for National Grid NTS to recall a GBA notice;

no within day name change proposed.

Any industry

concerns?

25

Day ahead & Within Day GBA

Raise modification in January 2012

Aim to implement any changes for winter 2012/13