1. National Grid: Gas Transmission System Operator
Paul Gallagher
NTS Optimisation Manager
National Grid

2. Gas Transmission in Great Britain
~8,200km pipeline
Operating pressure bar
7 Beach Reception Terminals
3 LNG Importation Terminals
3 Interconnectors
10 storage sites
23 compressor stations
200+ Exit Points
Highest Demand Day : 465 mcm
Lowest Demand Day : 117 mcm
Annual Throughput : bcm
St. Fergus
Teesside
Barrow
Easington
Burton Point
Theddlethorpe
Bacton
Milford Haven
Isle of Grain

3. Gas Technical Supply Maximum vs. 1 in 20 Peak Demand

4. Changing Network Flows
2013 on…

5. Role of NG as Transmission System Operator

6. Key roles of the System Operator
Residual Energy Balancing of the Gas Market
Safe, reliable and efficient operation of the National Transmission System (NTS)
Facilitation of efficient market operation
Response to events and emergencies

7. Statutary / Commercial Framework
RULES
Legislation, e.g. Gas Act, GS(M)R, Pipeline Regs, HASAW etc
Safety Case (PGT and NEC)
Uniform Network Code / Offtake Arrangement Document
Transmission Licence
EU Regulations and codes (new and increasing)
CONTRACTS
NEXAs, NEAs, SCAs etc
INCENTIVES
Balancing, Shrinkage, Capacity, Demand forecast etc
Customer Satisfaction

8. Commercial Frameworks
HSE
Ofgem
UNC
Safety Cases
GT Licence
Incentives
Network Entry
Agreement (NEA)
Network Exit
Agreement (NEXA)
Entry Facilities
National Grid NTS
Directly Connected
Consumers
Uniform Network
Code (UNC)
Offtake Arrangements
Document (OAD)
Storage
Connection
Agreement
(SCA)
Distribution
Networks
Shippers
Storage

9. System Operator Incentives
Incentives play a key role in defining how we operate our business
Obligations define what we should do, whereas incentives define how we should carry them out to align with customer requirements
Incentives change over time and are reviewed regularly based on customer feedback.
The RIIO regulatory framework created three categories of incentive:
Cost Incentives – These are schemes where if we reduce costs to below the target level then we can share a proportion of savings or conversely share a proportion of the overspend with users
Performance incentives – Stakeholders have specific performance requirements. We recover additional income if we meet/beat them and vice versa
Reputational incentives - These set out areas where we have obligations to carry out activities including reporting on them to our customers and stakeholders 9 9

10. Balancing

11. Balancing Responsibilities
Shippers Role
Obliged to provide commercial input and output nominations to National Grid before the day (forecasts)
Can chose to re-nominate throughout the gas day
Incentivised to ensure nominations / re-nominations are accurate
Incentivised rather than obliged to physically balance portfolio
NTS Connected Sites
Obliged to provide physical entry profiles (DFN’s)
NTS Connected Sites
Obliged to provide physical exit profiles (OPN’s)
Gas Supply
Gas demand

12. Shipper Balances by Gas Supply Gas demand Supply Nominations
Shippers send nominations to National Grid via Gemini what gas they propose to input into the NTS for the gas day
Beach / Imports / LNG
Storage Withdrawals
Trades - NBP Buys
Demand Nominations
Shippers send nominations to National Grid via Gemini what gas they propose to take out of the NTS for the gas day
DM Load Nominations
NDM Load Nominations
Storage Injections
Exports
Trades - NBP Sells
Gas Supply
Gas demand

13. Imbalance Cashout Shipper paid the SMP(S) for ‘excess’ gas
Shippers incentivised to nominate accurately through Scheduling charges.
Shippers Incentivised to balance through Imbalance Cashout – it is based on physical allocations not nominations and is faced by ‘out of balance’ shippers.
Lesser of:
Lowest Priced National Grid Gas Action OR SAP p/therm
Shipper
Over-delivery
Shipper paid the SMP(S) for ‘excess’ gas
Shipper penalised for overdelivery as the SMP(S) is a “poor” price.
Shipper penalised for underdelivery as the SMP(B) is a “high” price.
Shipper
Balanced
Shipper pays the SMP(B) for its ‘deficit’ gas
Greater of:
Highest Priced National Grid Gas Action OR SAP p/therm
Shipper
Underdelivery

14. Balancing Responsibilities
National Grid’s Role – Residual Balancer
Ensure NTS balance is within safe operating limits
NG balancing trade actions at times of forecast imbalance
Cannot ‘instruct’ users
NG neutral to direct costs of system balancing, but
NG incentivised to ensure
Daily change in line pack < 2.5mcm
Impact of actions taken on price is minimised
Shippers Role
Obliged to provide commercial input and output nominations (forecasts)
No obligation to physically balance portfolio
Incentivised to balance portfolio
NTS Connected Sites
Obliged to provide physical entry profiles (DFN’s)
NTS Connected Sites
Obliged to provide physical exit profiles (OPN’s)
Gas Supply
Gas demand

15. Neutrality Costs
National Grid is neutral to any charges or credits

16. Allocations
In GB nominations are effectively a forecast of expected flow
Allocations are based on physical ‘metered’ flow at the site
Where > 1 shipper at a site, then a post event allocation process has to take place to allocate the gas between the shippers
At exit points this runs until D+5
At entry points this takes until M+15
Further complications at bi-directional sites such as storage and interconnectors

17. System Operator Actions Balancing
Operational tools (internal)
Operational tools (external)
Commercial tools
Network Integrity
Utilise Linepack
National Energy Actions
Physical Energy Actions
Margins Notice
Gas Deficit Warning
Operating Margins
Gas Deficit Emergency
Information Provision (MIPI / Website / Gemini) 17

18. Supply Loss and Response18

19. Linepack 19

20. Operation of the NTS

21. Drivers of system operation
Statutary
Pressure integrity
Gas Quality
Environmental
Commercial
Delivering obligated and purchased capacity rights to shippers
Meeting assured pressures at offtakes
Equalising CV across distribution zones
Minimising cost of compression
Miinimising impact of maintenance on customers

22. Capacity Release
Every Entry and Exit point on the NTS has an obligated capacity
Level defined within NGs transportation licence
NG must release capacity to this level every day,
irrespective of physical capability to allow flow
Range of auctions used to release capacity (> 50 run every day)
Shippers can buy long term for up to 17 years ahead at entry points, or wait and ‘buy’ capacity on the day
Firm and ‘interruptible’ products available
Shippers are incentivised to purchase Capacity rights to flow gas onto and off of the NTS
If a shipper flows more gas than they have purchased capacity for then they incur overrun charges
Total obligated capacity at both entry and exit from the NTS is approximately 2 X peak demand

23. Data flows into NG
To allow NG to operate the network effectively users are obliged to provide information in 2 ways :
Nominations / renominations
Provided by shippers
Define ‘commercial’ daily flow at entry and exit points
Provided from 30 days ahead, and updated on ad-hoc basis
Feed through to allocations, billing, scheduling charges
Very limited operational use
Notifications
Provided by site operators (subterminals / storage / interconnectors at entry, Distribution networks / power stations / storage / interconnectors at exit)
Define a ‘physical’ hourly profiled flow expectation at entry and exit points
Provided from day ahead, and updated hourly within day
NG use these for forecasting flows on the network, modelling pressure profiles and identifying capacity constraint risks
Feed into supply, demand and linepack forecast calculations etc
Wide range of operational uses. Basis of network configuration decisions.

24. Before the Day Day Ahead Gas Day After the Day
Network Analysis & Risk Envelope
Day-Ahead Off-peak Capacity
Incentive Performance
Long Term Capacity Sales
Day-Ahead Firm Capacity
Within-day Firm Capacity
Capacity Revenue
Rolling Capability Assessment
Post Event Analysis & Lessons Learnt
Initiates
Constraint Management / Balancing Strategy
Demand Forecasts
D-1 Initial OPN
OPN Revisions
Supply & Demand
After-the-day Analysis
Supply Forecasts
D-1 Initial DFN
DFN Revisions
Planned Maintenance
Post Event Analysis
Plant trips/failures
Unplanned Maintenance
Reliability Data
OCS Assured Pressures
Agreed Pressures
Pressure KPI
Contractual Obligations
Linepack & Pressure Monitoring

25. System Operator Actions Network Management
Operational tools (internal)
Operational tools (external)
Commercial tools
Network Integrity
Reconfigure Network
Redistribute Linepack
Utilise Compressors
Move / cancel Maintenance
Agree revised Pressures
Flow Swaps
Enforce Contractual Offtake Rules
Scaleback ‘Interruptible’ Capacity
Locational Energy Actions
Capacity Surrender
Offtake Flow Reductions
Constraint Management Agreements
Operating Margins
Terminal Flow Advice (Entry)
Shutdown sites
Critical Transportation Constraint
Information Provision (MIPI / Website / Gemini) 25

26. Incentives in NTS operation
Capacity (+£20m to -£60m / year)
Release > capacity than obligated if users want it
Deliver capacity that has been released
Shrinkage (+£7m to -£7M / year)
Minimise compressor usage
Minimise price paid for energy to power compressors
Environmental (+£0m to -£unlimited M / year)
Reduce compressor gas venting
Maintenance (+£1.5m to -£1.5M / year)
Reduce days that offtakes are shutdown to allow maintenance
Reduce number of plan changes

27. Facilitating efficient operation

28. Market facilitation
Provide range of services to facilitate efficient market operation, including
Information provision (incentivised)
Provision of trading and capacity platforms
Forecasting (incentivised)
Reconciliation
Meter assurance (incentivised)

29. Market Information Provision Initiative (MIPI) – Prevailing View

30. Market Information Provision Initiative (MIPI) - Entry Flow Data
Shows latest telemetered Flows into the NTS for all entry points that are
capable of flows greater that 10mcm/d or NG owned & operated
Data provided at 2 minute resolutions – delivered to the internet at 12 minute intervals
Publishes flows for
Individual Entry points
ASEPs
Total Instantaneous Supply
Graphs available for viewing trends
Manual Download of data available
API’s allow automated download of latest published data

31. Response to Emergencies

32. Network Gas Supply Emergencies (NGSE)
Emergency affecting the National Transmission System is classified as one of Three types:
Gas Deficit Emergency (GDE)
Could be caused by a shortage of beach or storage gas, failure of market arrangements, Supply shortage
National Supply < National Demand
Storage monitor Breach (SMB)
Not enough gas in store to safely isolate protected loads
Not enough gas in store to deliver the peak 1in50
Critical Transportation Constraint (CTC)
Could by caused by damage to a NTS pipeline or compressor station etc
A network issue that impedes gas transmission capability
Could affect the safe supply of gas to Distribution Networks, NTS power stations, storage facilities, interconnectors
Gas Deficit Emergency: Occurs whenever there is insufficient gas available on the NTS to maintain a national supply/demand balance (generally a short duration)
Safety Monitor Breach: Safety monitors are levels of storage calculated to protect the public in the event of a statically severe “1:50” winter (See Forecasting Methodology on nationalgrid.com for further information). A Safety Monitor breach could be caused by a far longer, colder winter than forecast. (likely to be a long duration)
Critical Transportation Constraint: Where there is sufficient gas on the NTS (supply=>demand) however the gas can’t get to where it is required due to a transportation constraint. (typically short duration)
Feedback on the last emergency exercise
DFO / SFO obligations in an emergency
Possible standalone National Grid emergency exercise in 2014
Request feedback on the new DECC portal

33. Network Emergency Co-ordinator (NEC)
national
grid
Role performed by National Grid but NEC independent of System Operator
Co-ordination of actions of gas industry to prevent or minimise safety consequences of a supply emergency
Independent from any commercial interests of industry
Industry parties have a duty to co-operate with the NEC

34. Emergency Actions available to the Network Emergency Co-ordinator
NTS Linepack Usage
Distribution Co-operation & Storage Usage
Gas Specification GS(M)R Rules
Stage 1
(Potential)
Maximise NTS Supplies
Firm Load Shedding
National Grid suspends participation in OCM
Stage 2
Stage 3
Distribution Network allocation & isolation
Public Appeals
Stage 4
Restoration of Supplies
Purge & Relight