European Developments

Transmission Workgroup1 March 2012

Winter Outlook 2011-12

Further Information Requested

ENTSOG Winter Supply Outlook - Background

ENTSOG Winter Supply Outlook was published on 14th December

The Third package (Reg 715) defines the obligation for ENTSOG to publish a Winter and a Summer Supply Outlook every year

It provide a picture of the resilience of the European gas network during the forth coming season.

There was a dual approach to the 20112/12 Winter Outlook

The Outlook aims to evaluate system resilience through a scenario-based approach and not to forecast stakeholders’

behaviour

What Influence Gas Demand have on European UGS Stock Levels

ENTSOG investigated the impact of gas demand on UGS stock levels from October 2011 to March 2012

Sensitivity studies were produced around a Reference Case (1-in-2 Winter and supply being the average of last 2 years with UGS as last resort supply)

Stock level at the end of each month

Sept. 2011 Oct. 2011 Nov. 2011 Dec. 2011 Jan. 2012 Feb. 2012 Mar. 2012

Reference CA

91%

93% 86% 75% 60% 48% 42%

Cold Winter UGS only 88% 75% 56% 33% 14% 1%

Imports & UGS90% 78% 61% 41% 23% 13%

Warm Winter UGS only 98% 97% 94% 87% 83% 83%

Imports & UGS96% 94% 88% 79% 72% 71%

Gas in UGS storage is sufficient to cover on its own an additional demand of 10% upper the average winter (such increase is as high as the French winter demand)

UGS decreased deliverability due to low stock level in the end of the winter has no negative impact on system flexibility

ENTSOG investigated a high daily level of demand (statistically occurring once every 20 years) for January and March.

Reference supplies were defined as the highest daily levels reached in last 2 winters per supply type, with UGS as last resort supply

Peak in January 2012

Peak in March 2012

Remaining Flexibility when Facing Peak Demand

North West – Gas Regional Investment Plan

Post Consultation Response

Gas Regional Investment Plan

The North West European TSOs produced their Gas Regional Investment Plan 2011-2020 (NW GRIP). It is the first edition of this regional statement on long-term gas infrastructure development.

The core focus of the NW GRIP 2011-2020 was to highlight how TSO infrastructure projects impact the Interconnection Points within the NW region, along with the entry points into the region from countries where gas is directly imported from outside the EU.

It therefore provides an insight to shippers on potential new capacities.

Consultation Response

The NW TSOs ran a consultation on the published GRIP from 21st November 2011 to 31st January

The NW TSOs received only 1 consultation response (from EFET)

Requesting further incremental capacity information at cross border points

The TSO are discussion about the next steps for the GRIP

Present the consultation result at the GRI meeting in March

Interoperability Update

Transmission Workgroup

1st March 2012

Interoperability Update

ACER published a ‘Problem Identification Analysis’ paper on 13th February

The purpose was to:

Solicit views about what the genuine technical barriers are to the efficient functioning of the EU gas market

Inform ACER’s thinking about the scope of the Interoperability Framework Guideline

The primary audience was the 10 person ‘Expert Group’ appointed by ACER although it has gone wider

The Expert Group met and discussed the document in Vienna on 16th February

Problem Identification Analysis:The Topics Covered

Nominations

Interconnection Agreements

Capacity calculation

Gas quality

Odourisation

Units

Data Exchange

Feedback from the Experts Group Meeting

Interoperability is still viewed by ACER as fundamental to facilitating cross border flows

However, it is proving difficult to identify EU wide issues that require addressing in an EU Code

Some regulators appeared to be in favour of minimising the content of the Interoperability FG / Code

Gas Quality was viewed as a local problem

The inclusion of Capacity Calculation was challenged

Nominations has largely moved to the Balancing Code

Lack of common units is not really a barrier to trade

Next Steps

ACER still plan to release the Framework Guideline and Impact Assessment in March

The topics discussed so far are all likely to appear

However, there may be a more ‘local’ agenda – i.e. greater emphasis on TSO to TSO cooperation on solutions and NRA involvement to determine appropriate cost allocation

We will report to the Workgroup again in April

EU CAM Network Code and CMP Guideline Proposal Update

Transmission Workgroup

1st March 2012

Capacity Allocation Mechanism (CAM) - Update

30th January 2012, ENTSOG launched the Stakeholder Support Process – in which users were asked whether they were able to support the Network Code (NC) and the process undertaken to develop it

The Stakeholder Support Process closed 13th February 2012

Respondents indicated a high level of support for the process undertaken and the NC

The one exception relates to cross border capacity. A high proportion of stakeholders said they were unable to support the sunset clause nor accept the mandatory bundling of new capacity

Frontier Economics appointed by ACER to evaluate ENTSOG auction design and assessment against current models

Network Code to be formally issued to ACER 6th March 2012.

Congestion Management Procedures (CMP) Guidelines - Update

The Commission published previous version of the Draft Guidelines – 19th December 2011

GB Stakeholder meeting held with DECC 13th January 2012

Written views provided to DECC

The first Comitology meeting for Member States held 26th January 2012

Constructive meeting

Expect only one more meeting in April

Some issues – but minor expect no significant change?

DECC / Ofgem GB industry meeting held 3rd February 2012.

Congestion Management Procedures (CMP) Guidelines - Update

New version received 7th Feb via Ofgem from the 1st Comitology meeting:

CMP now applicable to entry / exit from 3rd countries

Not in line with CAM

Firm UIOLI (RoRR) text included to consider opinion of NRA on the other side of the IP

Secondary market not included

Implementation 1st Oct 13

Single transparency platform 1st July 13?

DECC & OFGEM requested further Industry comments on new version by 9th February 2012.

EU Updates Timetable

Timetable aims to highlight the key items (consultations, workshops, decisions, etc.) National Grid NTS expect to cover via this agenda item in the forthcoming months

Topic TX Workgroup

• Balancing update – where available, information on the forthcoming consultation

• Interoperability update

April 2012

• CAM update• Balancing Consultation update - Provide further details of

consultation and initial views of issues for consideration by GB stakeholders

May 2012

• Balancing update - Provide update on our views and response

• CAM update

June 2012