EU Developments

August Update European Network Code Workshop held 15th July Slides have been published on JO website Draft Vision European Gas Target Model Council of European Energy Regulators (CEER) Public Consultation launched 5th July Consultation deadline: 20th September 2011 Ofgem Workshop planned 1st September 2011 ACER Framework Guidelines on interoperability rules Scoping consultation to be published 4th August 2011 Consultation deadline: 15th September 2011 Speaker Notes: National Grid held a workshop on 15th July on European Network Codes with DECC and Ofgem. Over 60 people attended and feedback obtained was that attendees found the session useful and informative. On 5 July, the Council of European Energy Regulators (CEER) published its consultation on a “Vision for a European gas target model”. We encourage GB stakeholders to participate in CEER’s consultation process. Ofgem Workshop to be held on 1 September 2011 (14:15 to 17:00), Venue: Ofgem premises, London. Ofgem hope the event with generate debate around the recommendations and their impact on GB. It is anticipated that the Interoperability Scoping Consultation to be published 4th August 2011 (today). National Grid intend to share their views on this consultation at a future Transmission workgroup EU Update. In September NTS will provide a timetable of EU development topics that we expect to provide further details on over the next 6 months.

Moffat Physical Reverse Flow (PRF): Market Assessment EU Regulation 994/2010 to ‘Safeguard Security of Gas Supply’ includes an infrastructure obligation, that states that all European cross border points should have bi-directional flow capability, or for an exemption to be granted As part of the process to either gain an exemption or agree a viable proposal for PRF at Moffat, National Grid, along with Gaslink and Mutual Energy are undertaking a Market Assessment to assess the market demand for PRF at Moffat The Market Assessment includes a supply and demand outlook, a high level technical feasibility study, along with a questionnaire that allows market participants to express their interest in a non-binding manner The Market Assessment is expected to be published imminently, and will be available for a 2 month window on both the National Grid and Gaslink websites Speaker Notes: The regulation states that bi-directional capability must be installed by 2013 – unrealistic The Market Assessment will have a 5 years outlook The Supply/Demand analysis shows that it is extremely unlikely (within the 5 years) that there will be an over supply of indigenous Irish gas to supply the GB market It is our expectation that there will be no market demand for PRF (due to the lack of available gas on the island of Ireland), and thus we will be expecting to apply for an exemption from the Competent Authorities (DECC and CEER) The Market Assessment is designed to either confirm or challenge our analysis on the subject The TSOs have agreed to repeat the market assessment every 2 years as it is acknowledged that over time the supply picture in the island of Ireland could become very different from what it is today