GRI NW Investment Cross border investment Dublin 19 May Bid Capture Process Adam Cooper & Mike Young

Purpose of this session Reminder of the project drivers Examine how shippers interact in the process –Bidder sheet structure –Bid mechanism –Interaction with other modules

Project drivers Reiterate project outline EFET position –Need for capacity –Market based solutions –Proper risk allocation between “developer” and rest of community –Efficient investment to meet gas demand and flexibility to enhance gas on gas competition

Bid Sheet (1) Structure is quite simple Based on shippers having an implied supply curve – the price schedule for a range of capacity levels derived from the economic test model Also an understanding of the economic test for triggering an investment – and remember this is only year one of a rolling annual process! Two rounds where a volume of capacity is bid for various periods

Bid Sheet (2) Aggregate bids made available between rounds, including an indicative clearing price Indicative clearing price is based on the price where capacity offered is greater or equal than that bid for Aggregate bids and revenues are exported to the economic test Shippers wait for investment and allocation decision following TSO assessment and confirmation of the investment signal

Screen Shots What a shipper sees in Round 1 Aggregate view of bids Round 2 rules Aggregate bids and revenues

Shipper Input Sheet (3 Routes over n years, 2 Rounds, 8+ Shipper) Belgium-France Round 1 Shipper A Exit Netherlands Entry Belgium Exit Belgium Entry France Capacit y Price level Year 1Year 2Year 3Year 4Year 5Year 6Year 7Year 8Year 9 Year 10 Baseline10P P P P P P

Bidding Aggregation Sheet Bringing all bidding sheets together to compare with the Economic Test

How to proceed Get final economic test parameters and tariff schedule Decide on whether to run an illustrative or interactive bid test

Illustrative Approach An illustrative test provides a step through of the entire process –this is less resource intensive as there is no system requirement –this could still use a number of shippers to determine a range of typical bidding profiles

Interactive Approach Closer to “Reality” An interactive bid test involves some type of system build Written scenarios may be needed to give reasons to bid Needs at least 8 shippers to agree to participate and help develop the system June start needed

Conclusions Views and / or Questions