1. Optimisation ARODG Seminars Glasgow & London February 2007

2. Content  Outline of concept  What Does Optimisation Address  Optimisation Issues  Possible options  Process Going Forward

3. Optimisation - Concept  Maximise use of GB Transmission System  Facilitate Competition  Due regard to potential increased constraint costs  Economic coordinated GB Transmission System  Solution within existing framework

4. Optimisation Addresses  Resolving referred Offers  Confirmation of contracted background  Review of required reinforcements  Delaying works for consents (where relevant)  Scheduling of works  Backfilling any spaces  Moving Users forward  Moving Users backwards

5. Optimisation Issues  User Consent mismatch with contract  Increase in small generation  GB System Demand lower than Scottish Peak demand  Lack of space ahead of reinforcements  Limited Users withdrawing/reducing  Users uncertain over potential to move forward  2016 Offers  Optimum method to move users onto different works  NGET Licence Condition C8 “back of queue” uncertainty  Limited market information published  Uncertainty over TEC trading, capacity delaying

6. Optimisation Options  Restricting Users moving backwards  No limit  Within backstop date  6 months  Moving Users Forward  Managed based approach (sequential allocation)  Market based approach (willingness to pay)  Limiting changes to amount consented (or applied for)  Removing TEC/Capacity if not meeting milestones  More information published

7. Optimisation – Going forward  Open Letter – February  Review Code/Framework implications  Discussions with Authority  Responses Seminar – March  Earliest spaces identified - May