Rolling AQ

Review Group 177

Page 2Theme Date Department

Benefits

Increased accuracy in allocation Reduction in filter failures Reduces risk around RbD

Smoothing of workload through the year

Ability to react faster to consumer changes

Minimising step changes (1st October) helps reduce potential balancing costs

Reduces the differential between forecasts for balancing purposes and forecasts for total revenue

Page 3Theme Date Department

An example impact

Aggregate demand for a group of consumers

400420440460480500520540560580

01/0

9/20

04

01/1

1/20

04

01/0

1/20

05

01/0

3/20

05

01/0

5/20

05

01/0

7/20

05

01/0

9/20

05

01/1

1/20

05

01/0

1/20

06

01/0

3/20

06

01/0

5/20

06

01/0

7/20

06

01/0

9/20

06

01/1

1/20

06

01/0

1/20

07

01/0

3/20

07

Mil

lio

ns

Rolling annual demand Act AQ Calc 6mth AQ

Increased accuracy for allocation

Page 4Theme Date Department

What level of improvement would we see?

Assume current level of AQ with a scaling factor of 0.96% is overstating real AQ

Scaling factors away from 1 lead to a misallocation of energy between market sectors and increase RbD risk

1% reduction in AQ towards ‘actual consumption’ moves scaling factor towards 1 and leads to a 0.8% reduction in misallocation of energy

This would lead to improved initial commodity reduced reconciliation reduced RbD risk for Shippers faster Transportation certainty for Transporters