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Assured Offtake Pressures OAD Workgroup 25th September 2012

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Network Flexibility

Term that National Grid NTS has used in RIIO to identify the additional operational capability required for the NTS to accommodate the changing flow patterns and changing behaviours / requirements of NTS Users

NTS have proposed that this can be achieved through Rules, Tools or Assets Optimum solution likely being a combination of all three

Assured Offtake Pressures (AOPs) and associated pressure agreements are some of the existing Rules and Tools that are currently used to manage the NTS/LDZ interface Optimisation of NTS/DN system investment

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Assured Offtake Pressures (AOPs) AOPs provide DNOs with sufficiently high system input

pressures under which to plan, develop and operate their LDZs economically and efficiently

Each Exit Point’s AOPs are applicable for each Day within in a Gas Year and are not linked to demand

The agreed/significant pressures process can be used to agree lower/higher 06:00 operational pressures if required This process is used on the majority of days

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Why Propose Changes to AOPs

NTS investment / capability analysis assumes that AOPs are met at all demand levels No equivalent of the Agreed Pressures Process for planning

purposes

Majority of investment planning analysis for new supplies / storage sites is undertaken at medium to low demand levels

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Why do analysis at lower demand levels? Supply flows, mainly at importation facilities, do not

show a correlation with national demand levels

Source: National Grid NTS’ RIIO-T1 submission

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Entry Capability at lower demand levels As demand reduces, entry capability of the NTS also

reduces as gas needs to be transported further into the system

This results in larger pressure drops making it more difficult to meet AOPs whilst accommodating the level of supply at the terminal.

National Grid NTS may be proposing to invest to meet AOPs that are not required at a particular demand level, leading to potentially inefficient investment

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AOPs It is often difficult for National Grid NTS to agree to DNO requests

to increase existing AOPs as they are currently equally applicable to summer and winter demand conditions

If AOPs were linked to demand then National Grid NTS could be more confident of efficient

investment at off-peak demand levels National Grid NTS and DNOs may be able to agree increases

to AOPs at higher demand levels, as these would not apply for the entire gas year

We would not be required to agree appropriate pressures with each DNO, each Day via the Agreed Pressure Process

Would allow GNCC to make more efficient decisions when balancing the network and planning for system access

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Understanding AOPs NTS want to understand each DNOs requirement for high input

pressures to their LDZs so that we can consider potential changes to way AOPs are treated.

Source: NTS Demand Side Modelling - Design of Distribution Systems (GL Noble Denton)

65% of Peak

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Historical (aggregated) LDZ Demand

0

20

40

60

80

100

120

140

160

180

50-60

60-70

70-80

80-90

90-100

100-110

110-120

120-130

130-140

140-150

150-160

160-170

170-180

180-190

190-200

200-210

210-220

220-230

230-240

240-250

250-260

260-270

270-280

280-290

290-300

300-310

310-320

320-330

330-340

340-350

350-360

Aggregate LDZ Demand

Cou

nt

Sum of #

LDZ demand

10%

65%

of P

eak

Fore

cast

50%

of P

eak

Fore

cast

15%

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Proposal Proposal to introduce “Bands” of demand

Based on percentage of Peak LDZ demand forecast

For each demand band, DNOs and National Grid NTS would agree:

06:00 (SOD) Assured Offtake Pressure (by exit point)

22:00 (EOD) Assured Offtake Pressure (by exit point)

NTS Exit (Flexibility) Capacity (by exit point) given the associated AOPs

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Bands of Demand

0% 100%50%25% 75%

Current AOP at a DNO Exit Point

Actual DNO Pressure Requirement?

Demand Bands

Stepped AOPs in line with DNO Requirement

Inpu

t Pre

ssur

e at

Exi

t Poi

nt

Percentage of Forecast Peak Demand

Assumed that a minimum level is required below a certain demand threshold

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Next Steps? National Grid NTS has discussed this potential proposal with some DNOs

during its annual network planning meetings Not all DNOs took up National Grid NTS’ offer of a meeting this year

National Grid NTS is currently investigating the code, systems and process implications Operational timescales Agreed 06:00 Pressure process Low Demand Days

Will provide further updates at future OAD Workgroups

Draft Modification to be available for industry discussion in October / November