UNC Modifications 061

1
UNC Modifications 061 062 An Overview

• Transmission Workstream 03/11/2005

2
Background

• Winter Outlook Report identified the potential
  requirement for increased demand response for
  this winter.
• Demand Side Working Group has identified areas of
  development to facilitate greater demand side
  response being offered
• Clear signal needed from National Grid NTS that
  demand response is likely to be required.
• Ability to offer demand response for multiple
  days (unable to turndown for short periods)
• Provision of a route for the residual balancer to
  get access to non-OCM gas

3
Gas Balancing Alert (UNC mod 062)

• GBA will be issued on D-1 where forecast demand
  is in excess of anticipated available supplies.
• Delivery effect of particular storage types will
  be removed from the anticipated available
  supplies assessment when stock levels are within
  2 days of the Safety Monitor levels (at max
  export rates).
• GBA, once issued, shall remain in force for the
  duration of the Day.

4
Gas Balancing Alert (UNC mod 062)

• GBA within day option.
• Implementing the option would give National Grid
  NTS the ability to issue a GBA within the Day
  where
• There is an event that National Grid NTS
  anticipated will lead to an end of day supply
  loss in excess of 25 mcm and
• The anticipated supply loss subsequently results
  in the remaining anticipated available supplies
  being less than or equal to forecast demand.
• Views are invited on this option..

5
Facilitating further demand response (UNC mod 061)

• Where a GBA is issued, Eligible Balancing Actions
  by National Grid NTS may include
• Offers taken from OCM with Trading Participants.
• Offers taken OTC with non Trading Participants.
• Offers taken from either source that are
  effective for up to 7 consecutive days including
  D.

6
Effect on SAP and SMPs

• SAP
• Continue to include all OCM trades (except
  Locational)
• Also includes Eligible Balancing Actions taken by
  NG NTS through OTC contracts
• Publication via National Grid systems as now plus
  working with OCM operator to investigate other
  options.
• SMP
• Set by Eligible Balancing Actions either on OCM
  or OTC
• Inc. multiple day trades

7
Effect on SMPs

• Where a multi-day trade is accepted, each
  component Day will contribute into SAP, SMPs and
  Balancing Neutrality based upon the Residual
  Balancer assessed probability of the gas being
  required by the Total System on the subsequent
  days.
• of price applied Preq x (Preq / Sum(Preq))
• Effective Price (used in SMPB) of price
  applied x p/kWh x No Days
• Examples are set out in the Proposal and on next
  slide.

8
Example

• National Grid NTS accepts a six day, multi-day
  offer (buy) for 200 kWh per day at 10p kWh,
  Total Cost 12000p, Total Volume 1200 kWh.

D1 D2 D3 D4 D5 D6
Probability of Requirement 100 20 5 0 0 0
of price applied 80 16 4 0 0 0
Effective Price (used in greater of SMPB calculation) 48p 10p 2p 0 0 0
Effective Volume (used in SAP, volume defined in this row original trade price (10p) 960 kWh 192 kWh 48 kWh 0 0 0
Balancing Neutrality Charge 9600p 1920p 480p 0 0 0
9
Timetable

• Sent to Ofgem requesting Urgency 01/11/2005
• Ofgem grant Urgent status 02/11/2005
• Proposal issued for consultation 07/11/2005
• Closeout for representations 21/11/2005
• FMR issued to Joint Office 24/11/2005
• Panel Recommendation 01/12/2005
• Ofgem decision expected 05/12/2005
• Is a special Workstream meeting required?