Lessons from developments in the past ten years – GB experience Alison Kay – National Grid, Transmission Commercial Director

2 Contents  Influential developments in the GB gas market  What changes have these developments brought?  Lessons from our experience to date

3 Influential Developments on the GB market Declining UK gas production Rising demand Establishment of competition Full ownership unbundling Globalisation of the gas market

4 Bacton Theddlethorpe Easington St Fergus Teesside recent projects & investment Isle of Grain BBL IUK Milford Haven Dragon South Hook New Southern Basin storage developments New Continental link Barrow New Norway West of Shetland future investment potential new projects GB market FLAGS Langeled

5 Base Case Annual Supply Forecast What physical changes have these developments brought?

6 Bacton Theddlethorpe Easington St Fergus Barrow Teesside Frigg (Norway) North-South Flow

7 Bacton Theddlethorpe Easington St Fergus Barrow Milford Haven New Norway New Southern Basin storage developments Teesside Isle of Grain Milford Haven Tampen Langeled BBL Dragon South Hook New Continental link West of Shetland IUK Multi-directional Flow

8 What commercial changes have these developments brought?  Approximately 70 shippers active on the system  Liquid hub for trading gas  Sophistication of commercial arrangements  Reform driven by market players  Market based planning, with long term user commitments key  High levels of transparency  Increasingly European-wide legislation  Increased focus on Security of Supply Uniform Network Code

9 Lessons learned from experience to date  An understanding of our role as market facilitator  Providing a reliable and accessible service, information required by the market, ensuring a level playing field  The need to work with market players to provide information and make improvements in our regime  The importance of making timely and appropriate investments  The importance of being up to date with, anticipate and influence developments  The requirement to foster relationships on both a national and international level However we need to be cautious of over complicating the commercial regime

10 Conclusion  There have been extensive changes in the past ten years to both commercial and physical aspects of the GB regime  We are likely to see as many, if not more, changes over the coming years The European dimension will be increasingly influential and important National Grid looks forward to working with the other European TSOs and stakeholders to further this in the most beneficial manner to the European market