Kevin Shiels Gas Section Ofreg

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Kevin ShielsGas SectionOfreg

• Energy Forum
• 12 March 2004

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Todays Topics

• 1. Background
• 2. Current Developments in NI
• 3. All-island gas issues

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Irish gas transmission network
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1. Background

• ROI NI
• 1850 km -135 km SNIP
  -34 km Phoenix
• -112 km BGE NW
• -140 km BGE SN
• -IC 1 2 -SNIP
• -Inch -(BGE SN Pipe 06)
• -(Corrib)

• High Pressure Pipelines
• Entry Points

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1. Background Gas Distribution/Supply in NI
to date

• Phoenix - Sole active downstream supplier in NI
  (Greater Belfast area).
• Grown from zero customers in 1996 to 66,000 now.
• Licence issued by Government in 1996 allowing
  exclusive rights in gas distribution and supply.
• Gas supply full market opening under existing
  licence arrangements on 1 January 2005.
• Other licence holder in Greater Belfast -
  Energia.

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2. Current Developments in NI Transmission

• 1. Postalisation of gas transmission charges
  from October 04
• - One single set of exit charges for taking gas
  from the NI Transmission network.
• - Postalised cost base includes all NI
  Transmission related costs.
• 2. NW Pipeline (BGE NI) - complete in Oct 2004.
• 3. SN Pipeline (BGE NI) - complete in 2006.
  Greater opportunity for all-island synergies.
• 4. Asset refinancing - lower costs for both gas
  and electricity customers.

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2. Current Developments in NI Distribution

• 1. - Ongoing development in Greater Belfast area
  (increasing market share for gas).
• - Full opening to competition in January 2005.
• 2. - New Distribution and Supply licence
  negotiation with BGE (NI) at advanced stage.
• - Distribution/Supply in the major towns along
  the routes of the NW and SN pipelines.

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3. All-island All-island Gas Issues

• Some common issues for NI RoI
• Desire by policymakers to consider all-island
  gas issues.
• Security of Supply considerations.
• Price!
• At the end of a lengthening supply chain.
• EU Legislation/Directives.

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3. All-island But many differences

• Transmission structures
• ownership structures.
• charging- ROI entry/postalised exit
• NI fully postalised
• Capacity/commodity
• network rules.
• Maturity of development (distribution supply) -
  450,000 customers vs 66,000.
• Legislative, regulatory, operational, safety,
  financial, etc.

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3. All-island Harmonised Transmission
tariffs

• Joint Steering Group - Request to Regulators
• consider and report back on the cost and benefits
  of harmonising gas transmission tariff
  structures.
• CER/NIAER Joint Study
• Options, costs and benefits of harmonising gas
  transmission tariff structures on an all-island
  basis having regard to any legal, regulatory or
  operational obstacles to achieving an optimum
  solution.
• Completion May 2004.
• Time Horizon 2007/08 - 10 years.

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3. All-island Some Good Questions

• Does having different gas tariff structures
  matter?
• If so
• What type of tariffs are optimal in an all-island
  regime entry/exit, fully postalised, zonal?
• How should tariffs be calculated? - time horizon
  capacity/commodity.
• How should flows through the new SN pipe be
  tariffed?
• To what degree is an optimal harmonised regime
  deliverable on the ground?
  
  

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3. All islandStudy into transmission tariff
structures

• Identify existing commonalities and differences.
• Identify benefits of harmonisation and their
  distribution.
• Identify obstacles to harmonisation.
• Identify any costs of harmonisation and their
  distribution.
• Identify options for or alternatives to
  harmonisation.