Post on 04-Jan-2016
Enduring NTS Offtake Arrangements
Transmission Workstream
5th September 2006
Background
15 EOWG’s to discuss NTS Exit Reform
Objective today to walkthrough the details of National Grid NTS Business Rules
Opportunity to provide clarification Concerns / objections raised via Modification process
Modification to be raised and sent to Panel 21/9/2006
Request to proceed direct to consultation
Contents
Introduction High Level Definitions Part I: NTS Exit (Flat) Capacity Overview Part II: NTS Exit (Flexibility) Capacity Product Overview Part III: Initialisation of NTS Exit (Flat) Capacity Regime Section 1: Long Term NTS Exit (Flat) Capacity Sales Section 2: Medium Term NTS Exit (Flat) Capacity Sales Section 3: Daily Release Short Term (Firm) NTS Exit (Flat) Capacity Sales Section 4: Daily Ahead Interruptible NTS System Exit Capacity Sales Section 5: Transfers and Assignment of NTS Exit (Flat) Capacity Section 6: Long and medium term NTS Exit (Flexibility) Capacity Sales Section 7: Daily NTS Exit (Flexibility) Capacity Sales Section 8: Transfers and Assignment of NTS Exit (Flexibility) Capacity Section 9: NTS Exit Capacity Constraint Management Section 10: Exit Capacity Neutrality Arrangements Section 11: Charging Arrangements Section 12: Credit Checks & Termination Rules Section 13: Liability Arrangements and User Obligations Section 14: Further references in UNC affected by Exit Reform APPENDIX 1: NTS Exit Zones APPENDIX 2: Area and NTS Exit Zone Maximas
Introduction
High Level Definitions
2 Separate Products
Defines NTS Exit Points, Zones & Areas
Capacity Products
Offtake
Rate
Time 22:00 06:00
Average
Flow Rate
Actual
Flow Rate
Flexibility Utilisation
End of day quantity
NTS Exit (Flat) Capacity provides right to offtake daily quantity of gas with implied rights to flow at uniform rate at an NTS Exit Point
NTS Exit (Flex) Capacity provides right to flow at a non-even flow rate in an NTS Exit Zone
06:00
Products
Types of capacity
• NTS Exit (Flat) Capacity
• NTS Exit (Flex) Capacity
Bundles
Prevailing rights (3 years+)
Annual (1-3 years)
Daily (day ahead and on the day)
Daily Interruptible (day ahead)
Annual (1-5 years)
Daily (day ahead and on the day)
Part I: NTS Exit (Flat) Capacity Overview
“Ticket to Ride” principleEnd of Day Quantity
By NTS Exit PointVarious types of NTS Exit (Flat) Capacity
Prevailing NTS Exit (Flat) Capacity (Firm) Annual NTS Exit (Flat) Capacity (Firm) Daily NTS Exit (Flat) Capacity (Firm) Daily Interruptible NTS Exit (Flat) Capacity
National Grid NTS can acquire a Users rights if; User doesn’t maintain appropriate credit NTS SO utilises NTS Exit (Flat) Capacity
management tools Required to ensure safety of the system
Part I: NTS Exit (Flat) Capacity Overview – cont.
Users holding made up of quantities bought & sold both from National Grid NTS & Other Users
Release Mechanism Long Term release (Y4 onwards) Medium Term release (Y1 to Y3) Short Term release (D-1 & D) Interruptible Short Term (D-1)
Flat Capacity Overrun By Day Aggregate flows exceed aggregate holdings at NTS
Exit pointIncludes –ve overrun
Individual Users overrun applied
NTS Exit Capacity - Overrun charge
A User’s NTS Exit Capacity flat/flex overrun charge will be determined as the “User's NTS Exit (Flat/Flex) Capacity Overrun” amount multiplied by the highest of:
8 times the highest price paid by Users at the NTS Exit Point/ Zone for any class of firm NTS Exit (Flat/Flex) Capacity for that day
8 times the highest reserve price at the NTS Exit Point or zone for any capacity auctions (NB. This is to cover scenario where no capacity is booked at an NTS Exit Point/Zone, but Users still flows)
1.1 times the highest price paid by National Grid for NTS Exit (Flat/Flex) Capacity for any NTS Exit Point/Zone for that day for capacity buy back through any constraint management action
Part I: NTS Exit (Flat) Capacity Overview – cont. (OVERRUN EXAMPLE)
NTS Exit Point A 3 Users
NTS Exit Point UDQO Flat holdings User Individual Overrun User Overrun
User 1 0 0 0 0
User 2 0 0 0 0
User 3 0 0 0 0
Sum of Users 0 0 0 0
Aggregate 0 0 0
Part I: NTS Exit (Flat) Capacity Overview – cont. (OVERRUN EXAMPLE)
NTS Exit Point A Add in EOD Flows
NTS Exit Point UDQO Flat holdings User Individual Overrun User Overrun
User 1 12 0 0 0
User 2 11 0 0 0
User 3 26 0 0 0
Sum of Users 49 0 0 0
Aggregate 49 0 0
Part I: NTS Exit (Flat) Capacity Overview – cont. (OVERRUN EXAMPLE)
NTS Exit Point A Add in Flat Holdings
NTS Exit Point UDQO Flat holdings User Individual Overrun User Overrun
User 1 12 10 0 0
User 2 11 15 0 0
User 3 26 18 0 0
Sum of Users 49 43 0 0
Aggregate 49 43 6
Part I: NTS Exit (Flat) Capacity Overview – cont. (OVERRUN EXAMPLE)
NTS Exit Point A
NTS Exit Point UDQO Flat holdings User Individual Overrun User Overrun
User 1 12 10 2 0
User 2 11 15 0 0
User 3 26 18 8 0
Sum of Users 49 43 10 0
Aggregate 49 43 6
Part I: NTS Exit (Flat) Capacity Overview – cont. (OVERRUN EXAMPLE)
NTS Exit Point A
NTS Exit Point UDQO Flat holdings User Individual Overrun User Overrun
User 1 12 10 2 1.2
User 2 11 15 0 0
User 3 26 18 8 4.8
Sum of Users 49 43 10 6
Aggregate 49 43 6
Part I: NTS Exit (Flat) Capacity Overview – Reductions
Notice to reduce Prevailing NTS Exit (Flat) Capacity rights from 08.00 1st July to 17.00 31st July of Gas Year (YN)
The reduction cannot be earlier than the later of: Gas Year YN+2 (i.e. 15 month notice)
Gas Year YA+4 Gas Year YA is the Gas Year with effect from which the
User was most recently allocated Prevailing NTS Exit (Flat) Capacity (i.e. if requested and allocated additional prevailing need to be through 4 year commitment before the User can make any reductions).
“Prevailing Flat Capacity” - Reduction
Capacity
10
20
July 2008
Oct 2010
1.5 year reduction notice period
Baseline
30
If User wishes to reduce prevailing rights, must provide at least 1.5 years notice
Initial Prevailing Level
Investments: Unconstrained Period “Prevailing Flat Capacity” - Increase
Capacity
10
20
July 2007
Oct 2010
Baseline
30
In July 2007, Users will also be able to request additional prevailing rights for use from Oct 2010
Require commitment to pay 4 years charges, irrespective of baseline
Initial Prevailing Capacity
Additional Prevailing Capacity
Commit to pay [4] years of charges for 30 units
Revised
Prevailing
Level
Oct 2014
Investments: Unconstrained Period “Prevailing Flat Capacity” - Decrease
Capacity
10
20
Oct 2010
Baseline
30
After User has committed to an increase, only able to decrease from when commitment met
Prevailing Capacity
Oct 2014
July 2013
1.5 year
notice period
Part II – NTS Exit (Flexibility) Capacity Product Overview
A high level review of NTS Exit (Flexibility) Capacity
High Level Overview of ProposalNon-Peak Day Example (EOD < Capacity Holding)
22.0006.00
MDQ/24
Capacity booked
= 7200
= 300 per hour
End of Day
Measurement
= 2400100
110
300
80
Flex utilised = 160
High Level Overview of Non-Peak Day Example (EOD < Capacity Holding)
22.0006.00
MDQ/24
Capacity booked
= 7200
= 300 per hour
End of Day
Measurement
= 2400100
110
300
User wishes to flow at 110 for 12 hours and 90 for 12 hours
90
18.00
Flex Utilised = 80
High Level Overview of Peak Day Example (EOD = Capacity Holding)
22.0006.00
Wish to flow at 305 for 12 hours and then reduce flow to 295 for 12 hours.
300
305
1800
295
Flex Utilised = 40
Actual max EOD
Flow = 7200
Booking = 7320
(305 MHQ*24)
Part II: NTS Exit (Flexibility) CapacityProduct Overview
Entitles Users to offtake at a non-even rate NTS Exit Zone
2 types of NTS Exit (Flexibility) Capacity Annual Daily
No Interruptible NTS SO can acquire a Users rights as per NTS
Exit (Flat) Capacity rules Release mechanisms
Annual Auction (Y1 to Y5) Short Term (D-1 and D)
Part II: NTS Exit (Flexibility) CapacityProduct Overview – cont.
Flex Capacity Overrun By Day Aggregate Flex utilised exceeds Flex Holdings at an NTS
Exit Zone Flex utilised = 22:00 deemed flow – 22:00 measured flow
Deemed flow = EOD measured flow/(24x16)1.5% tolerance applied
Part II: NTS Exit (Flexibility) CapacityProduct Overview – cont.
Individual User overrun applied Utilises the same principles as above Agree 22:00 default rules with User or 22:00 value provided by
Agent If the sum of all of the Users individual NTS Exit (Flexibility)
Capacity Overruns is greater than the than Aggregate NTS Exit (Flexibility) Overrun then the Individual User’s Overrun is scaled in proportion to their percentage of the sum of all the Individual User Overruns.
In the event that a User has agreed to reduce its intended end of day flow or flexibility utilisation by acceptance of a constraint management action undertaken by National Grid NTS, the User will not incur any resulting increase in its overrun charge.
Part II: NTS Exit (Flexibility) CapacityProduct Overview – cont.
A User’s NTS Exit (Flexibility) Capacity overrun charge will be determined as the User's NTS Exit (Flexibility) Capacity Overrun amount multiplied by the highest of:
8 times the highest price paid by Users at the relevant NTS Exit Zone to National Grid NTS for any class of firm NTS Exit (Flexibility) Capacity for that day;
8 times the highest reserve price at the relevant NTS Exit Zone for any capacity auctions (NB. This is to cover scenario where no capacity is booked at an NTS Exit Zone, but Users still utilise system flexibility);
1.1 times the highest price paid by National Grid for NTS Exit (Flexibility) Capacity at the relevant NTS Exit Zone for that day for capacity buy back through any constraint management action.
Part II: NTS Exit (Flex) Capacity Product Overview – cont. (OVERRUN EXAMPLE) NTS Exit Point A
(UDQO – EOD Flows), (22:00 2/3) and (Flex Holding) figures for 3 Users inserted
Aggregate 16 11.7 0 0 0.6 0
User 1 10 7 0 0 0.2 0 0
User 2 3 2.5 0 0 0.2 0 0
User 3 3 2.2 0 0 0.2 0 0
Sum of Users 16 11.7 0 0.6 0 0
NTS Exit Point UDQO Q2200AVG
(Q2200) UDFU
Flex Holding
User Individual Overrun
User Overrun
Part II: NTS Exit (Flex) Capacity Product Overview – cont. (OVERRUN EXAMPLE) NTS Exit Point A
Aggregate 22:00 figures calculated
Aggregate 16 11.7 10.67 0 0.6 0
User 1 10 7 6.67 0 0.2 0 0
User 2 3 2.5 2.00 0 0.2 0 0
User 3 3 2.2 2.00 0 0.2 0 0
Sum of Users 16 11.7 0 0.6 0 0
NTS Exit Point UDQO Q2200AVG
(Q2200) UDFU
Flex Holding
User Individual Overrun
User Overrun
Part II: NTS Exit (Flex) Capacity Product Overview – cont. (OVERRUN EXAMPLE)
NTS Exit Point A User Daily Flexibility Utilisation figures calculated (includes adjustment for 1.5% tolerance)
Aggregate 16 11.7 10.67 0.86 0.6 0
User 1 10 7 6.67 0.23 0.2 0 0
User 2 3 2.5 2.00 0.46 0.2 0 0
User 3 3 2.2 2.00 0.17 0.2 0 0
Sum of Users 16 11.7 0.86 0.6 0 0
NTS Exit Point UDQO Q2200AVG
(Q2200) UDFU
Flex Holding
User Individual Overrun
User Overrun
Part II: NTS Exit (Flex) Capacity Product Overview – cont. (OVERRUN EXAMPLE) NTS Exit Point A
User Individual Overruns calculated
Aggregate 16 11.7 10.67 0.86 0.6 0.26
User 1 10 7 6.67 0.23 0.2 0.03 0
User 2 3 2.5 2.00 0.46 0.2 0.26 0
User 3 3 2.2 2.00 0.17 0.2 0.00 0
Sum of Users 16 11.7 0.86 0.6 0.29 0
NTS Exit Point UDQO Q2200AVG
(Q2200) UDFU
Flex Holding
User Individual Overrun
User Overrun
Part II: NTS Exit (Flex) Capacity Product Overview – cont. (OVERRUN EXAMPLE) NTS Exit Point A
User Overruns calculated from User Individual Overrun Aggregate
Aggregate 16 11.7 10.67 0.86 0.6 0.26
User 1 10 7 6.67 0.23 0.2 0.03 0.03
User 2 3 2.5 2.00 0.46 0.2 0.26 0.23
User 3 3 2.2 2.00 0.17 0.2 0.00 0.00
Sum of Users 16 11.7 0.86 0.6 0.29 0.26
NTS Exit Point UDQO Q2200AVG
(Q2200) UDFU
Flex Holding
User Individual Overrun
User Overrun
Part II: NTS Exit (Flexibility) CapacityProduct Overview – cont.
Bi-Directional Site Current IUK certification rules removed Establish direction of flow to determine whether NTS
Exit (Flexibility) capacity required
Net Entry to NTS from 06.00 to 22.00
Net Entry to NTS by end of day Treatment
Y Y Entry Point i.e. no NTS Exit (Flexibility) Capacity deemed to
have been used Y N Entry Point i.e. no NTS Exit
(Flexibility) Capacity deemed to have been used
N Y Exit Point
N N Exit Point
Part III: Initialisation of NTS Exit (Flat) Capacity Regime
DC’s can book up to Maximum Exit Capacity Booking for Winter 2005/06
Interruptible
DN’s book up to OCS booking for 2009/10 (specified in 2006 statement)
Part III: Initialisation of NTS Exit (Flat) Capacity Regime – Transitional Timetable
Date Held Product (Flat/Flex) Auction/ Application
Annual / Long / Medium / Short Term
Period
July 2007 (Confirmations by 15th July 2007)
Flat Application Long Term (Increase and confirmation of Initial
Prevailing rights)
Oct-2010 Onwards
July 2007 Flexibility Auction Annual Oct-2010 to Sep-2012
July 2008 (reductions by 15th July 2008)
Flat Application Long Term (increase and reductions)
Oct-2011 Onwards
July 2008 Flexibility Auction Annual Oct-2010 to Sep-2013
August 2008 Flat Auction Medium term Oct-2010 to Sep-2011
July 2009 (reductions by 15th July 2009)
Flat Application Long Term (increase and reductions)
Oct-2012 Onwards
July 2009 Flexibility Auction Annual Oct-2010 to Sep-2014August 2009 Flat Auction Medium term Oct-2010 to Sep-2012
August 2009 Flat and Flexibility Trading and Transfers Oct-2010 onwards
October 2009 Flat and Flexibility Holdings considered in Security and Indebtedness Oct-2010
July 2010 (reductions by 15th July 2010)
Flat Application Long Term (increase and reductions)
Oct-2013 Onwards
July 2010 Flexibility Auction Annual Oct-2010 to Sep-2015
August 2010 Flat Auction Medium term Oct-2010 to Sep-2013
24th September 2010 Flat and Flexibility Bidding Short Term 01-Oct-2010
30th September 2010 Flat and Flexibility
(Firm and Flat Interruptible day ahead)
Auction Short Term 01-Oct-2010
01st October 2010 Flat and Flexibility (within day)
Auction Short Term 01-Oct-2010
Nov-2010 Flat and Flexibility Invoices Issued For Oct-2010
Section 1: Long Term NTS Exit (Flat) Capacity Sales
Application for Additional Prevailing NTS Exit (Flat) Capacity
Held once a year 1st July to 31st July Open between 08.00 to 17.00 every day Users can modify and withdraw throughout bid window Minimum Eligible Quantity 100,000 kWh Applications not accepted (also rejected at acceptance) if
Credit Sanction in place
Users will need to book a continuous [4] years of capacity to satisfy the requirements test
Section 1: Long Term NTS Exit (Flat) Capacity Sales
National Grid NTS will have up to 2 months after the last application window has closed, to complete the allocation process, including any credit checks
If the potential results identify that Prevailing NTS Exit (Flat) Capacity at an NTS Exit Point is greater than the Baseline Quantity for that NTS Exit Point, National Grid NTS will apply to the Authority and request release of additional incremental.
this may involve National Grid NTS requesting baseline reductions at other NTS Exit Points (to be detailed in IExCR)
Section 1: Long Term NTS Exit (Flat) Capacity Sales
Post Application Information Provision Not later than 24 hours after each User has been
notified of their allocation, National Grid NTS will publish the following information by NTS Exit Point by Gas Year:
Aggregate quantity of Prevailing NTS Exit (Flat) Capacity allocated
Aggregate quantity of reductions accepted and from when such reductions apply
(Revised) Baseline Quantity (i.e. including any reductions accepted by the Authority)
Incremental Quantity (where applicable) Number of Users applying for additional prevailing rights
Investments: Unconstrained Period “Prevailing Flat Capacity” - Increase
Capacity
10
20
July 2007
Oct 2010
Baseline
30
In July 2007, Users will also be able to request additional prevailing rights for use from Oct 2010
Require commitment to pay 4 years charges, irrespective of baseline
Initial Prevailing Capacity
Additional Prevailing Capacity
Commit to pay [4] years of charges for 30 units
Revised
Prevailing
Level
Oct 2014
Investment Process - Incremental “Prevailing Flat Capacity”
Users able to apply in July to signal additional “prevailing” requirements for 3 years ahead
Each User commits to pay for [4] years of charges, irrespective of baseline (but may only reduce thereafter subsequent to [1.5] years
notice period)
National Grid NTS considers whether transfer of unsold capacity from other nodes would avoid investment and request permanent baseline
reductions via application to release incremental capacity
If aggregate of user requirements at a node above baseline then National Grid NTS consider need for investment
Allocations and transfers published by October
ARCAs
Allows non-UNC parties to reserve Prevailing NTS Exit (Flat) Capacity
Counter party commits to pay [4] years of exit capacity charges on any amount of reserved capacity not booked by Users under UNC
National Grid NTS commitment to allow users to book reserved capacity
Section 2: Medium Term NTS Exit (Flat) Capacity Sales
Held once a year August for Y1, Y2 and Y3
Over 2 business days, 3 business days apart Open between 08.00 and 17.00 Bids can be modifies/withdrawn between these times Bids must be greater than or equal reserve price Bids must be greater than or equal to Minimum Eligible
Quantity 100,000kWh 10 bids per User, per NTS Exit Point, per round If Credit Sanction in place User will be unable to bid (bids
also rejected at Allocation)
Section 2: Medium Term NTS Exit (Flat) Capacity Sales
Unsold baseline made available
50% of quantity to be offered in each round 1 and 2 & the unsold quantity from the first round is made available in the second round
Bids will be ranked in order of price
National Grid will allocate within [48]hrs for round 1&2
Section 2: Medium Term NTS Exit (Flat) Capacity Sales – cont.
Standard pay-as-bid allocation rules
Not later than 24 hours after each User has been notified of their allocation in the final round National Grid NTS will publish the following information per NTS Exit Point per Year:
Weighted Average Price of all successful bids Aggregate Volume Allocated Any remaining unsold baseline NTS Exit (Flat) Capacity (including any
NTS Exit Capacity that the National Grid NTS is obligated to release). Number of Users who submitted bids Number of successful Users The highest price accepted The volume accepted associated to the highest price The lowest price accepted The volume accepted associated to the lowest price
Section 3: Daily Release Short Term (Firm) NTS Exit (Flat) Capacity Sales
Held D-1and D 15.00 D-1 With a minimum of 60 minutes notice, by National Grid
NTS, after the D-1 auction.
Bid window open D-7 06.00 – D0 00.00
Users can place evergreen or reducing bids Can modify/withdraw evergreen at any time unless in
period between gate closure and allocation. Reducing bids can be withdrawn subject to the above but
cannot be modified once reduced.
Section 3: Daily Release Short Term (Firm) NTS Exit (Flat) Capacity Sales
Bids must be greater than or equal to reserve price
10 bids per Exit Point, per User, per day (excludes withdrawn and allocated bids)
Bids must be greater than or equal the Minimum eligible quantity (100,000 kWh).
If a credit sanction is in place Users will be unable to place bids (would also be rejected at allocation)
Section 3: Daily Release Short Term (Firm) NTS Exit (Flat) Capacity Sales
Bids ranked in price order (Pay-as-bid)
NTS SO will allocate 1 hour after closure
Quantity made available on D-1, based on unsold baseline plus NTS SO discretion.
Quantity made available on D, based on National Grid NTS discretion and/or Unsold baseline (subject to National Grid NTS Licence conditions)
Section 3: Daily Release Short Term (Firm) NTS Exit (Flat) Capacity Sales
Not later than 1 hour after each User has been notified of their allocation the National Grid NTS will publish the following information per NTS Exit Point per day:
Weighted Average Price of all successful bids Aggregate Volume Allocated Number of Users who submitted bids Number of successful Users The highest price accepted The volume accepted associated to the highest price The lowest price accepted The volume accepted associated to the lowest price
Section 4: Day Ahead Interruptible NTS Exit Capacity Sales
No ‘Firm’ right to offtake gas
Auction held D-1 15:00
Bid window open D-7 06.00 – D-1 14.00 Must be greater than or equal to reserve price No more than 10 bids per NTS Exit Point, per User, per Day (not including
withdrawn bids) Quantity must be greater than Minimum Eligible amount 100,000 kWh Bids rejected if Credit Sanction in place at time of bid being placed or
allocation
Amount made available based on UIOLI principles plus discretionary release
UIOLI based on Firm holdings minus average quantity offtaken. Difference calculated for each day over 30 days, excluding last 7 days. Average difference gives UIOLI quantity
Section 4: Day Ahead Interruptible NTS Exit Capacity Sales
Bids ranked in price order (Pay-as-bid auction)
National Grid NTS will allocate 1 hour after closure
NTS SO ability to scale back if constraint
Not later than 1 hour after each User has been notified of their allocation the National Grid NTS will publish the following information per NTS Exit Point per day:
Weighted Average Price of all successful bids Aggregate Volume Allocated Number of Users who submitted bids Number of successful Users The highest price accepted The volume accepted associated to the highest price The lowest price accepted The volume accepted associated to the lowest price
Section 5: Transfers and Assignment of NTS Exit (Flat) Capacity
A trade registration system to facilitate trading
Users can trade ahead of the day (unlimited days in advance) and within day (upto 04.00)
Trading may not take place between NTS Exit Points
National Grid NTS may reject a trade within 60 minutes of the trade being confirmed if it causes a negative holding.
Section 5: Transfers and Assignment of NTS Exit (Flat) Capacity
User unable to buy via trading if Credit Sanction in place
Holdings adjusted for trade buys and/or sells
Original holder of capacity remains liable for NTS Exit Capacity charges.
National Grid NTS will facilitate primary transfer (assignment) of a User’s total amount of capacity holding to another User at an NTS Exit Point with 5 days notice
User able to assign its total amount of capacity holdings at an NTS Exit Point to another User at the same NTS Exit Point, subject to credit checks, including the liability to pay for capacity charges
Section 6: Long and medium term NTS Exit (Flexibility) Capacity Sales
No incremental investment
Annual NTS Exit Flexibility Auction By NTS Exit Zone Y1 – Y5 (annual strips) Held over 2 business days with 3 business days in between
Open 08.00 to 17.00 on each day Release 50% in each round and unsold from 1 in round 2 10 bids per NTS Exit Zone, per User, per round Bids must be greater than or equal to reserve price Bids must be greater than Minimum Eligible Quantity (50,000 kWh) Pay-as-bid auction Information provided pre and post auction
Section 6: Long and medium term NTS Exit (Flexibility) Capacity Sales
National Grid NTS shall allocate within 48 hours of closure of the window.
Between each round. Not later than 48 hours following the closure of each auction round, the National Grid NTS will notify Users of the following information by NTS Exit Zone and Gas Year:
Aggregate Volume Requested Aggregate Volume Allocated Highest Price Bid Allocated Volume Allocated at highest price Lowest Price Bid Allocated Volume Allocated at lowest price Number of Users who placed bids Number of successful Users Maximum Available NTS Exit (Flexibility) Capacity for future
auctions.
Section 6: Long and medium term NTS Exit (Flexibility) Capacity Sales
After Final Allocation. Not later than 24 hours after each User is notified of their allocation, National Grid NTS will publish the following information by NTS Exit Zone and by Gas Year:
Aggregate Volume Requested Aggregate Volume Allocated Maximum Available NTS Exit (Flexibility) Capacity Highest Price Bid Allocated Volume Allocated at highest price Lowest Price Bid Allocated Volume Allocated at lowest price Number of Users who submitted bids Number of successful Users
Allocation Process is Key 22 MCM national release Subject to area & zonal maxima
Complexity in Allocation Process
Section 6: Long and Medium term NTS Exit (Flex) Capacity Sales – cont. (EXAMPLE)
National Release 22
Area X limit 13
Area Y limit 17
Zone A limit 10
Zone B limit 12
Zone C limit 14
Zone D limit 6
Section 6: Long and Medium term NTS Exit (Flex) Capacity Sales – cont. (EXAMPLE)
NTS Exit
PointQuantityPriceZone Allocate to?
National Allocation
Area X Allocation
Area Y Allocation
Zone A Allocation
Zone B Allocation
Zone C Allocation
Zone D Allocation
User 1 7 5.0 A
User 1 5 4.5 D
User 2 6 4.5 A
User 1 2 4.0 B
User 4 6 3.5 B
User 3 4 3.0 C
User 2 8 2.5 A
User 3 2 2.5 B
User 4 5 2.5 C
User 1 9 2.0 A
User 2 4 2.0 D
User 3 12 2.0 C
Section 6: Long and Medium term NTS Exit (Flex) Capacity Sales – cont. (EXAMPLE)
NTS Exit
PointQuantityPriceZone Allocate to?
National Allocation
Area X Allocation
Area Y Allocation
Zone A Allocation
Zone B Allocation
Zone C Allocation
Zone D Allocation
User 1 7 5.0 A Allocate in Full 7 7 0 7 0 0 0
User 1 5 4.5 D
User 2 6 4.5 A
User 1 2 4.0 B
User 4 6 3.5 B
User 3 4 3.0 C
User 2 8 2.5 A
User 3 2 2.5 B
User 4 5 2.5 C
User 1 9 2.0 A
User 2 4 2.0 D
User 3 12 2.0 C
Section 6: Long and Medium term NTS Exit (Flex) Capacity Sales – cont. (EXAMPLE)
NTS Exit
PointQuantityPriceZone Allocate to?
National Allocation
Area X Allocation
Area Y Allocation
Zone A Allocation
Zone B Allocation
Zone C Allocation
Zone D Allocation
User 1 7 5.0 A Allocate in Full 7 7 0 7 0 0 0
User 1 5 4.5 D Allocate in Full 12 7 5 7 0 0 5
User 2 6 4.5 A
User 1 2 4.0 B
User 4 6 3.5 B
User 3 4 3.0 C
User 2 8 2.5 A
User 3 2 2.5 B
User 4 5 2.5 C
User 1 9 2.0 A
User 2 4 2.0 D
User 3 12 2.0 C
Section 6: Long and Medium term NTS Exit (Flex) Capacity Sales – cont. (EXAMPLE)NTS Exit
PointQuantityPriceZone Allocate to?
National Allocation
Area X Allocation
Area Y Allocation
Zone A Allocation
Zone B Allocation
Zone C Allocation
Zone D Allocation
User 1 7 5.0 A Allocate in Full 7 7 0 7 0 0 0
User 1 5 4.5 D Allocate in Full 12 7 5 7 0 0 5
User 2 6 4.5 AAllocate partially, 3, Zone A max hit
15 10 5 10 0 0 5
User 1 2 4.0 B
User 4 6 3.5 B
User 3 4 3.0 C
User 2 8 2.5 A
User 3 2 2.5 B
User 4 5 2.5 C
User 1 9 2.0 A
User 2 4 2.0 D
User 3 12 2.0 C
Section 6: Long and Medium term NTS Exit (Flex) Capacity Sales – cont. (EXAMPLE)NTS Exit
PointQuantityPriceZone Allocate to?
National Allocation
Area X Allocation
Area Y Allocation
Zone A Allocation
Zone B Allocation
Zone C Allocation
Zone D Allocation
User 1 7 5.0 A Allocate in Full 7 7 0 7 0 0 0
User 1 5 4.5 D Allocate in Full 12 7 5 7 0 0 5
User 2 6 4.5 AAllocate partially, 3, Zone A max hit
15 10 5 10 0 0 5
User 1 2 4.0 B Allocate in Full 17 12 5 2 0 5
User 4 6 3.5 B
User 3 4 3.0 C
User 2 8 2.5 A
User 3 2 2.5 B
User 4 5 2.5 C
User 1 9 2.0 A
User 2 4 2.0 D
User 3 12 2.0 C
Section 6: Long and Medium term NTS Exit (Flex) Capacity Sales – cont. (EXAMPLE)NTS Exit
PointQuantityPriceZone Allocate to?
National Allocation
Area X Allocation
Area Y Allocation
Zone A Allocation
Zone B Allocation
Zone C Allocation
Zone D Allocation
User 1 7 5.0 A Allocate in Full 7 7 0 7 0 0 0
User 1 5 4.5 D Allocate in Full 12 7 5 7 0 0 5
User 2 6 4.5 AAllocate partially, 3, Zone A max hit
15 10 5 10 0 0 5
User 1 2 4.0 B Allocate in Full 17 12 5 2 0 5
User 4 6 3.5 BAllocate partially, 1, Area X max hit
18 13 5 3 0 5
User 3 4 3.0 C
User 2 8 2.5 A
User 3 2 2.5 B
User 4 5 2.5 C
User 1 9 2.0 A
User 2 4 2.0 D
User 3 12 2.0 C
Section 6: Long and Medium term NTS Exit (Flex) Capacity Sales – cont. (EXAMPLE)NTS Exit
PointQuantityPriceZone Allocate to?
National Allocation
Area X Allocation
Area Y Allocation
Zone A Allocation
Zone B Allocation
Zone C Allocation
Zone D Allocation
User 1 7 5.0 A Allocate in Full 7 7 0 7 0 0 0
User 1 5 4.5 D Allocate in Full 12 7 5 7 0 0 5
User 2 6 4.5 AAllocate partially, 3, Zone A max hit
15 10 5 10 0 0 5
User 1 2 4.0 B Allocate in Full 17 12 5 2 0 5
User 4 6 3.5 BAllocate partially, 1, Area X max hit
18 13 5 3 0 5
User 3 4 3.0 C Allocate in Full 22 9 3 4 5
User 2 8 2.5 A
User 3 2 2.5 B
User 4 5 2.5 C
User 1 9 2.0 A
User 2 4 2.0 D
User 3 12 2.0 C
Section 6: Long and Medium term NTS Exit (Flex) Capacity Sales – cont. (EXAMPLE)NTS Exit
PointQuantityPriceZone Allocate to?
National Allocation
Area X Allocation
Area Y Allocation
Zone A Allocation
Zone B Allocation
Zone C Allocation
Zone D Allocation
User 1 7 5.0 A Allocate in Full 7 7 0 7 0 0 0User 1 5 4.5 D Allocate in Full 12 7 5 7 0 0 5
User 2 6 4.5 AAllocate partially, 3, Zone A max hit
15 10 5 10 0 0 5
User 1 2 4.0 B Allocate in Full 17 12 5 10 2 0 5
User 4 6 3.5 BAllocate partially, 1, Area X max hit
18 13 5 10 3 0 5
User 3 4 3.0 C Allocate in Full 22 13 9 10 3 4 5
User 2 8 2.5 AReject as National Allocation Max Sold
22 13 9 10 3 4 5
User 3 2 2.5 BReject as National Allocation Max Sold
22 13 9 10 3 4 5
User 4 5 2.5 CReject as National Allocation Max Sold
22 13 9 10 3 4 5
User 1 9 2.0 AReject as National Allocation Max Sold
22 13 9 10 3 4 5
User 2 4 2.0 DReject as National Allocation Max Sold
22 13 9 10 3 4 5
User 3 12 2.0 CReject as National Allocation Max Sold
22 13 9 10 3 4 5
Flex Capacity – Increase (annual)
Capacity
5
July 2007
Oct 2010
Zonal
Baseline
Users able to book annual rights subject to national, area and zonal limits through “pay-as-bid” auction 5 years ahead
Annual right
Oct 2011
Annual right
Oct 2012
Allocate subject to national, area and zonal maxima
Reserve Price ~0 p/kWh
Invitation issued 28 days in advance
Section 7: Daily NTS Exit (Flexibility) Capacity Sales
Daily NTS Exit Flexibility OPN Process
OPN submitted at an NTS Exit Point level Needs to be detailed at a User level either by
Providing a User OPN orA default methodology to derive a User OPN
National Grid NTS calculate an implied NTS Exit (Flexibility) Capacity Usage from the OPN
If National Grid NTS can accommodate the requested OPN then the User’s NTS Exit (Flexibility) Capacity holding is increased (if required) by the User’s implied NTS Exit (Flexibility) Capacity usage.
Section 7: Daily NTS Exit (Flexibility) Capacity Sales
If National Grid NTS cannot accommodate the OPN then the OPN is rejected and User’s can re-submit
If the revised OPN still cannot be accommodated then an Auction is invoked (National Grid NTS may also have to invoke Constraint Management Tools)
Additional NTS Exit (Flexibility) Capacity allocated via OPN process is charged at the Daily NTS Exit (Flexibility) reserve price.
Section 7: Daily NTS Exit (Flexibility) Capacity Sales
Auction Process
Minimum of [30] minutes notice given by National Grid NTS, detailing
NTS Exit Zone Reserve Price
Volume released at National Grid NTS discretion
Users can place bids from 08.00 D-7 to 21.00 DMust be greater than or equal to reserve price10 bids per NTS Exit Zone, per User, per day (excludes withdrawn and allocated bids)Must be greater than or equal to Minimum Eligible Quantity
(50,000 kWh)Evergreen or reducing
Section 7: Daily NTS Exit (Flexibility) Capacity Sales
Pay as bid auction
Not later than 1 hour after each User has been notified of their allocation the National Grid NTS will publish the following information per NTS Exit Zone per day. Each one of the pieces of information detailed below will be provided:
Weighted Average Price of all successful bids Aggregate Volume Allocated Number of Users who submitted bids Number of successful Users The highest price accepted The volume accepted associated to the highest price The lowest price accepted The volume accepted associated to the lowest price
Flex Capacity – Increase (daily)
Capacity
5
Oct 2010
Zonal
Baseline
Annual right
Oct 2011
Annual right
Oct 2012
Daily rightsubject to new zonal maxima based on our assessment
Assessment of daily capability and unutilised flex
Consider release of additional flex (in accordance with incentive/obligation)
Allocate through OPN acceptance, if can meet all requests
If can’t meet all requests, allocate through “pay-as-bid”auction
Day ahead and within day
Current Notice Periods and Ramp Rates apply
Reserve Price ~0 p/kWh
Section 8: Transfers and Assignment of NTS Exit (Flexibility) Capacity
A trade registration system to facilitate trading (provided in 2009)
2 “types” of NTS Exit (Flexibility) Capacity Trading
Annual Trading Opens after first Annual auction for a Year has been allocated. Annual Block ONLY Can be traded at and between Zones Cannot be traded during Annual Auction (i.e. from first bid date
to allocation completed) Cannot trade annually after last Annual Auction for that Gas
Year
Section 8: Transfers and Assignment of NTS Exit (Flexibility) Capacity
Daily Trading Opens after last Annual auction for a Year has been allocated. Minimum for a day. Can be traded at and between Zones
Both Annual and Daily trading subject to Intra and Inter Zonal Rules:
Intra-Zonal Users can trade ahead of the day (subject to Annual and Daily
rules) and within day (upto 04.00) Facilitate trading between Users
Section 8: Transfers and Assignment of NTS Exit (Flexibility) Capacity
Inter-Zonal Can trade in advance (subject to Annual and Daily rules). Trading window open up to 12.00 D-1 Trades subject to
Area maximaZonal MaximaNTS SO taking Constraint Management Actions within an
NTS Exit Zone Can trade between Users and a User can trade with itself.
Either “type” of trade and intra/inter zonal results in an adjustment to both the buying and selling User’s NTS Exit (Flexibility) holding at the relevant NTS Exit Zones.
Section 8: Transfers and Assignment of NTS Exit (Flexibility) Capacity
National Grid NTS will facilitate primary transfer (assignment) of a User’s total amount of capacity holding to another User at an NTS Exit Zone with 5 days notice
User able to assign its total amount of capacity holdings at an NTS Exit Zone to another User at the same NTS Exit Zone, subject to credit checks, including the liability to pay for capacity charges
Section 9 : NTS Exit Capacity Constraint Management NTS Exit (Flat) Capacity Constraint Management
Scaleback Of Interruptible Options & Forwards contracts NTS Exit (Flat) Capacity Buy Backs
NTS Exit (Flexibility) Capacity Constraint Management
D-1 Buy Back of Primary Product Bi-Lateral Contracts
Flow Swaps Forwards & Options Turn Up
Section 9 : NTS Exit Capacity Constraint Management
Scaling Back of NTS Exit (Flat) Interruptible Interrupt anytime after 15.00 D-1 Minimum of current hour +1 notice Takes account of “deemed flow” National Grid NTS shall determine the proportion of
Interruptible required to be scaled off. Users pay for original Interruptible (pre-scale).
Section 9 : NTS Exit Capacity Constraint Management
Buyback of NTS Exit (Flat and Flexibility)
Capacity Process same as daily release Pay as bid auction Limits to bids/offers (reserve price bids, minimum
eligible quantity and so on) Allocate lowest price first Potential for Flat buyback D-1 and D Potential for Flex buyback D-1 Information provided post auction
Section 9 : NTS Exit Capacity Constraint Management
Within Day Flow Reductions NTS SO notify Users of quantity and period Users submit offers
QuantityPrice
Pay as bid auction Price feeds into NTS Exit (Flexibility) Capacity
Overrun Flow reduction reduces a Users NTS Exit (Flexibility)
Capacity holding by 1/3 of the quantity accepted.
Section 10: Exit Capacity Neutrality Arrangements
Cost and revenues smeared on NTS Exit (Flat) Capacity holdings over all NTS Exit Points
Revenues D-1 and D NTS Exit (Flat) Capacity Sales Non-obligated NTS Exit (Flat) Capacity Sales D-1 and D NTS Exit (Flexibility) Capacity Sales NTS Exit (Flat) Capacity Overrun Charges NTS Exit (Flexibility) Capacity Overrun Charges
Costs NTS Exit Capacity Constraint Management tools
Section 11: Charging Arrangements
Users pay National Grid NTS NTS Exit Capacity Charges (Flat and Flexibility) NTS Exit Commodity Charges NTS Exit Capacity Overrun Charges NTS Exit Capacity Neutrality Charges
National Grid NTS pay Users NTS Exit Capacity Surrender Charges NTS Exit Capacity Neutrality Revenues Non compliant gas and liabilities
Invoiced in accordance with UNC Section S
Section 12: NTS SO Credit Checks & Termination Rules
Credit (subject to Credit Modifications raised)
Extension to current credit rules Notify Users if exceed 70% of their credit limit Sanction placed if exceed 85% of User’s credit limit Assessment of outstanding invoices plus next 12 months entry
capacity charges.
Considers 12 months Flat & Flex in security & credit assessment
DNs will need appropriate security
Section 12: NTS SO Credit Checks & Termination Rules
Termination
DNO terminates, new DNO takes over
Non DNO User terminates NTS Exit (Flat and Flexibility) Capacity revert to NTS SO Except where the User has traded the product onto another User
Non terminated user has option to “buy” the traded quantity and #accept the liabilities
the User has bought the product from another UserProduct reverts to non-terminated User
Section 13: Liability Arrangements and User Obligations
Liabilities – Direct Connects Principle applies to both Flat and Flexibility Amount of gas not made available for Offtake by National Grid
NTS Based on holdings (C), flows (X) and nominations (Y)
Flat Liability use Flat holdings, end of day flows/nominationsFlex Liability use Flex holdings, 22.00 flows and flex nominations
Rate for Flat = Prevailing Exit Capacity Price (P) Rate for Flexibility = WAP for Annual Auction bids for that Gas
Year for that NTS Exit Zone (P).
C * (1-X/Y) * P * F
F = multiplier of 10
DN’s as now
Section 13: Liability Arrangements and User Obligations
National Grid NTS obligations to make gas available for offtake
National Grid NTS shall not be obliged to make gas available for Offtake where :
Quantity flowed exceeds the User’s NTS Exit (Flat) Capacity
Holding.At any time where flows exceed the maximum permitted
rateOn any day that there is Planned Maintenance
Maximum Permitted RateApplies between 06.00 and 22.00Flex holding + 16/24ths of end of day Flow
Section 13: Liability Arrangements and User Obligations
User obligations at NTS Exit Points User not entitled to flow at a rate that exceeds the Maximum Permitted Rate
Flat holding / 24 + Flex holding / 4
Where National Grid NTS believe that this rate is being exceeded – National Grid NTS can take any steps to secure the required reduction
Section 13: Liability Arrangements and User Obligations
Pressure Obligations at NTS/LDZ Offtakes Commitments for 2009/10 (set this summer) rolled over going forward. National Grid NTS and DNO’s can request a :
Permanent increase / decrease in April each year, detailing new Assured Offtake Pressure and start of Gas year applies
Finite increase / decrease at any time, detailing the new Assured Offtake Pressure and the period that the pressure shall apply.
The counter party must accept within 2 months for permanent or 10 days for temporary unless it would prejudice the safe and economic operation of their system.
Section 14: Further References in UNC
Section G Interruptible Firm Allowance SOQ Capacity Booking Interruptible Supply Points Partnering Supply Points
CSEP Ancillary Agreements remain but UNC takes precedent
Section I OAD Various Sections to be removed as superseded by these
Business Rules