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Shrinkage Forum. Tuesday 8 March 2011, 31 Homer Road. Agenda. 1.0 Introduction 2.0 Review of Minutes and Actions from previous meeting (08 March 2007) 3.0 Incentive Regimes – DN Presentation 4.0 Leakage Model – DN Presentation 5.0 Shrinkage Proposal Process – DN Presentation - PowerPoint PPT Presentation

Transcript of Shrinkage Forum

  • Shrinkage ForumTuesday 8 March 2011, 31 Homer Road

  • Agenda1.0 Introduction2.0 Review of Minutes and Actions from previous meeting (08 March 2007)3.0 Incentive Regimes DN Presentation4.0 Leakage Model DN Presentation5.0 Shrinkage Proposal Process DN Presentation6.0 Theft of Gas Open Discussion7.0 Any Other Business8.0 Diary PlanningAgree agenda items and actions for next meeting

  • Incentive Regimes

  • Incentive Regimes - ShrinkageShrinkage Incentive - Special Condition E8Target volume baselines by LDZIncentive reduce shrinkage volumesPerformance valued at day-ahead gas priceIncentive procure gas cheaper than day-ahead priceNo cap or collarPerformance has a direct impact on DN costs and leads to a better distribution of costs under RbD

  • Incentive Regimes - EnvironmentEnvironmental Emissions Incentive Special Condition E9Target volume baselines by LDZIncentive reduce leakage volumesPerformance valued at social cost of carbon10% cap and collar regimePerformance has a direct impact on DN revenue

  • Leakage Model

  • Leakage ModelMethodology developed in the early 1990sCurrently a spreadsheet modelControlled by Special Condition E9 in Gas Transporter LicencesFive main elements LP LeakageMP LeakageAGI LeakageAGI VentingInterference Damage

  • Leakage Model E9 ObligationsThe Leakage Model shall facilitate the achievement of the following objectives The accurate calculation and reporting of gas leakageBeing consistent with, and where reasonably practicable, identical to Leakage Models used by other DN Operators.Report the actual leakage volume (LVt,i) together with any new information obtained by the licensee regarding leakage rates, including data derived from leakage tests.Annually review the Leakage Model to ensure that it continues to achieve the objectives and Consult with shippers and other interested parties to seek their viewsPropose such modifications (if any) as are necessary for the purpose of better achieving the objectives.

  • Leakage Model E9 Modification ProcessPropose revised baselinesConsult with the industryAppoint an Independent Expert to review and report on the proposalSubmit report on the consultation to OfgemImplement the modification if approved by Ofgem

  • Leakage Model Elements & Main Input ParametersLP LeakagePipe AssetNo. Services & ReplacementAverage System PressureMEG SaturationMP LeakagePipe AssetAGI LeakageAsset NumbersAGI VentingFixedInterferenceNumber of incidentsReportable incidents

  • Low Pressure Leakage ModelApproximately 80% of all leakageLeakage rates for 11 diameter/material bands, based on a national survey carried out in 2002/03> 2000 low pressure networks nationallyAverage System Pressure - determined via recorded source pressure data and network analysisMEG Saturation (where used) determined from recorded data and network analysisPipe asset lengths (replacement of metallic mains has greatest impact)No. of services

  • Medium Pressure Leakage ModelApproximately 8% of all leakageCalculated at LDZ levelPipe asset lengths

  • AGI Leakage ModelApproximately 7% of all leakageCalculated at LDZ level5 leakage rates for AGI asset types, based on a national survey carried out in 2002/03:HoldersNTS OfftakesLTS OfftakesDistrict GovernorsService Governors

  • AGI Venting ModelApproximately 5% of all leakageFixed values based on a national value from the 2002/03 AGI leakage test report apportioned by relative number of venting AGI asset at time of Network Sales

  • Interference Damage ModelApproximately 500kg release incidentsActual release value where recorded/estimatedNumber other recorded incidentsSplit by LP/MP (95/5)Split by Puncture/Fracture (50/50)Assumed leakage rates and response/fix times

  • Shrinkage Proposal Process

  • Shrinkage Proposal Process

  • Theft of GasOpen Discussion