DSR Workgroup 10 September 2014 www.energy-uk.org.uk t @energyukcomms

DSR Shipper / supplier contract issues DSR Workgroup 10th September 2014 DSR Shipper / supplier contract issues Shippers / suppliers are expected to be the contractual interface between DM customers and the DSR bidding platform to facilitate customers offering load for DSR purposes after a gas deficit warning has been issued. Where there is a demand from customers for this service, Shipper / Suppliers are happy to facilitate this, but we need to recognise they do have limited operational resources Under stressed supply / demand conditions resources will be focussed on managing the portfolio balance position and maintaining security of supply Therefore arrangements with customers need to be: Straightforward in application and execution (to avoid confusion in an emergency situation) Not increase shipper balancing risk Propose: Standard set of minimum terms that shippers could offer Variations (or enhancements) to these terms could be managed bilaterally, this may encourage more complex / innovative DSR arrangements.

DSR Standard Contractual Terms DSR Workgroup 10th September 2014 DSR Standard Contractual Terms Fixed volume, price, lead time at time of supply contract negotiation This strikes a balance between shippers providing a route to market for customer DSR whilst maintaining operational focus at times of system stress Performance assessed against day ahead nominations Expectation that at least fixed volume is delivered Non-delivery No DSR payment to customer if the fixed DSR volume is not delivered (no pro-rating of payments) Encourages customers to offer volumes they are confident in being able to deliver Avoids more complex arrangements Protects shipper balance positions Provides National Grid with some confidence in likely delivered volumes