Ofgem Information Request on availability of NTS Exit Flexibility Capacity Ritchard Hewitt Gas Code Development Manager National Grid Transmission 7 th February 2008

Background  Development of 0116v – extensive analysis of Flat and Flex products.  Analysis in 2006 presented to EOWG in June confirms 22mcm available flexibility.  Physically Firm product suitable for DNO demonstration in their Safety Case.  Ofgem Information Request received 1 st Nov 07  Extensive analysis (175 man days) focussed on Flex  Information Request asks eight questions  Subsequent slides look at the answers given to each question in turn.

Core assumptions  Size of Network  Based on current 10YS  Gas Days - peak, Day 1, and Day 68  Gas Years – 2007/8, 2010/11, and 2016/17  Distribution of Supplies  Balanced  Varying levels of IOG supplies  Heavy East Coast Supplies  Delivery Profile  Front and backloading  Geographic distribution of Demand  Balanced

Ofgem Question One  How much flexibility capacity there will be on the NTS based on National Grid Transmission’s current investment plans?  Answer – Depends on the assumptions made. However scenarios currently indicate 22mcm.

Ofgem Question Two  How this level of flexibility capacity would change if there are any changes in these plans?  Answer:  Changes to Core assumptions including:  Changes in IOG flows in proportion to demand level  High East Coast Flows relative to demand level would reduce available flex

Ofgem Question Three  National Grid Transmission’s assessment of the demand for flexibility capacity from the DNs, storage sites and large Users  Answer: GDNs:  Flexibility Capacity Request from GDNs – 2007 OCS Process  Final Flexibility Capacity Allocation to GDNs – 2007 OCS Process * = The allocation for 2011/12 is indicative only and at this stage only reflects NGG’s commitment for 2010/11

Ofgem Question Three  National Grid Transmission’s assessment of the demand for flexibility capacity from the DNs, storage sites and large Users  Answer: Other Loads  Increasing trend at CCGTs due to increase in offtakes over next 10 years (12GW) and increase in trend of usage.  Potential effect of Renewables on Gas plant load profiles  Storage effect could be both positive and negative  Recent trends in Flex usage give an indication of increased use.

Ofgem Question Four  National Grid Transmission’s assessment of what would reduce or increase NTS flexibility capacity  Answer:  The geographic balance of Demand and of Supply  Uniformity of flows at entry  Change to pressure commitments

Ofgem Question Five  The likely development of the availability of flexibility capacity on a regional and zonal basis.  Answer:  Milford Haven pipeline should release more flex capability in South Wales.  Reduced Flows from St Fergus could release more flex in Scotland  Net position of approximately 2mcm between 2007 and 2016/17

Ofgem Question Six  The potential causes, if any, of future scarcity of flexibility capacity  GDN OCS Bookings  Aggregate 2007 OCS requests for 2011/12 are beyond current assessment of available Flexibility.

Ofgem Question Seven  The probability, location and potential timing of any such scarcity developing in practice.  Answer:  Most recent OCS process would indicate scarcity in 2011/12.

Ofgem Question Eight  What Actions would National Grid Transmission take... were a flexibility capacity constraint to arise …... In particular, what would the magnitude of the consequences for end users …. be should the risk(s) materialise?  Answer:  In Planning timescales  Scale back requests by an equal proportion  In Operational timeframe  Require adherence to NExA terms  Interruption of loads  OCM “locational” actions  Emergency Interruption/load shedding

Questions