Gas Ten Year Statement 2016
UK gas transmission
NOVEMBER 2016 Gas Ten Year Statement November 2016
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We are in the midst of an energy revolution. The economic landscape, developments in technology and consumer behaviour are changing at an unprecedented rate, creating more opportunities than ever for our industry.
Our 2016 Gas Ten Year we enhance our approach to how Statement, along with our other we foresee the network evolving System Operator publications, to ensure we have the tools and aims to encourage and inform capability in place ahead of need. debate, leading to changes that ensure a secure, sustainable Complementing 2016’s GTYS and and affordable energy future. FES (Future Energy Scenarios) publications, National Grid will also GTYS 2016 continues to be an be producing for the first time the important part of how we engage Gas Future Operability Planning with you to understand the drivers (GFOP) document. With the ambition of change influencing your business, to look out to 2050, GFOP will begin so that we can continue to develop the first steps at articulating how the National Transmission System changing customer requirements and market framework in line with will affect the capability of the those needs. gas transmission system for both operations and its associated Although the key themes have processes. Alongside GTYS we remained unchanged over the are keen to get your views on the past 12 months, their importance inaugural GFOP publication, and remain crucial to us, in particular engagement activities are being how we respond to changing arranged to facilitate this. customer requirements, the impact of EU legislation on the market and I hope that you find both these infrastructure, and of course the documents, along with our other effect of Great Britain’s evolving System Operator publications, and dynamic gas market on useful as a catalyst for wider debate. system operations and planning For more information about all our into the future. publications, please see page 14.
Our latest Future Energy Scenarios Please share your views with us; (FES) further emphasises the you can find details of how to importance of gas in GB’s energy contact us on our website http:// mix, continuing to play a key role www.nationalgrid.com/gtys by providing flexible generation to enable the growth of renewable sources of generation; and providing Andy Malins top-up heating in the longer term. Head of Network Capability It is fundamentally important that and Operations, Gas Gas Ten Year Statement November 2016 02
Contents
Executive summary...... 03 Asset development...... 116 Overview...... 03 5.1 Introduction...... 117 Key messages...... 05 5.2 Industrial emissions directive...... 118 Future GTYS editions and feedback...... 06 5.3 Integrated pollution prevention Introduction...... 08 and control (IPPC) directive...... 119 1.1 What do we do?...... 08 5.4 Large combustion plant directive...... 122 1.2 Future Energy Scenarios...... 09 5.5 Medium combustion plant directive.....123 1.3 Key themes...... 10 5.6 Asset health review...... 123 1.4 Network development process...... 11 5.7 Meeting future flow patterns...... 124 1.5 GTYS chapter structure...... 12 1.6 How does the Gas Ten Year Statement publication fit in?...... 14 1.7 How to use this document...... 16
Way forward...... 126 6.1 Continuous development of GTYS...... 127 6.2 2015/16 stakeholder feedback and engagement...... 128 Network development inputs...... 18 2.1 Introduction...... 19 2.2 Customer requirements...... 21 2.3 Future energy scenarios...... 38 2.4 Legislative change...... 52 Appendix 1 – National Transmission System (NTS) maps ...... 130 Appendix 2 – Customer connections and capacity, and the PARCA framework process...... 142 Appendix 3 – Meet the teams...... 152 Appendix 4 – Actual flows 2015/16...... 154 System capability...... 66 Appendix 5 – Gas demand and supply volume 3.1 Introduction...... 67 scenarios...... 159 3.2 NDP – defining the need case...... 68 Appendix 6 – EU activity...... 189 3.3 Customer capacity – exit...... 69 Appendix 7 – Network development process...... 192 3.4 Customer capacity – entry...... 86 Appendix 8 – Conversion matrix...... 194 3.5 Impact of legislative change...... 92 Appendix 9 – Glossary...... 195
System operation...... 96 4.1 Introduction...... 97 4.2 What are system operator capabilities?...... 98 4.3 Deciding between system operator capabilities and assets...... 99 4.4 Investing in our system operator capabilities...... 101 4.5 Needs case review...... 110 Gas Ten Year Statement November 2016 03
Executive summary
Overview
The 2016 Gas Ten Year Statement (GTYS) In partnership with the 2016 GTYS, National provides an update on the current and future Grid will also be publishing the inaugural Gas challenges which impact the way we plan and Future Operability Planning (GFOP) document. operate the National Transmission System This will describe how changing customer (NTS). It also outlines what we are doing to requirements may affect the future capability address these challenges in our roles as the of NTS out to 2050, and the challenges these System Operator (SO) and Transmission may pose to NTS operation and processes. Owner (TO). The GFOP publication will enhance the way we respond to you and other market signals, Three themes continue to be a priority for us: leading to modifications in our decision customer requirements, legislative change and making and operational processes to ensure asset health. This year’s publication will again we continue to maintain a resilient, safe focus on these against the backdrop of the and secure NTS. current Future Energy Scenarios. Gas Future Operability Planning 2016 Future Energy Scenarios Gas Ten Year Statement 2015
Gas Gas Ten Year Future Energy Future Operability Statement 2015 Scenarios Planning 2016
UK gas transmission UK gas and electricity transmission UK gas transmission
National Grid plc National Grid plc National Grid plc National Grid House, National Grid House, National Grid House, Warwick Technology Park, Warwick Technology Park, Warwick Technology Park, Gallows Hill, Warwick. Gallows Hill, Warwick. Gallows Hill, Warwick. CV34 6DA United Kingdom CV34 6DA United Kingdom CV34 6DA United Kingdom Registered in England and Wales Registered in England and Wales Registered in England and Wales No. 4031152 No. 4031152 No. 4031152 www.nationalgrid.com NOVEMBER 2015 www.nationalgrid.com JULY 2015 www.nationalgrid.com NOVEMBER 2016 Gas Ten Year Future Energy Gas Future Statement Scenarios Operability Planning November 2016 July 2016 November 2016 Gas Ten Year Statement November 2016 04
Executive summary
Continuing with the revised format used for requirements, future energy scenarios, last year’s document, GTYS 2016 is presented legislative change, and asset health bridging across the following sections (see Figure 0.1) the central three chapters of System Capability, with the aforementioned themes of customer System Operation and Asset Development.
Figure 0.1 2016 GTYS structure
1. Introduction
2. NDP Triggers Customer Future Energy Legislative Asset Requirements Scenarios Change Health
3. System Capability Connections (new/existing) Entry and Exit Capacity System Flexibility Historic Evolution of Supply & Demand Current Supply & Demand Future Energy Scenarios IED (IPPC, LCP, MCP & BREF) Maintenance & Replacment Do nothing/impact on current network and SO capabilities
Options to respond
4. System Operation SO Tool/ Capability Development
5. Asset Development Network/Asset option development
6. Way Forward Gas Ten Year Statement November 2016 05
Key messages
Changing energy landscape – over the EU legislation in relation to asset past year the volume of renewable electricity operation on the NTS – in January 2013 sources has increased substantially (with solar the Industrial Emissions Directives (IED) came and onshore wind contributing approximately into force. This restricts the use of 16 of our 64 0.2 GW of generation capacity in 2000, which compressor units on the NTS. Combined with increased to 17.8 GW in 2015) representing the Medium Combustion Plant (MCP) directive 30% of installed capacity. In line with the which will come into force by January 2018, November 2015 energy policy announcement this is anticipated to affect the availability of from the government, higher levels of gas-fired a further 26 units in our compressor fleet. generation are anticipated with enhanced importance on gas being used for both flexible Following the result of the 2016 referendum electricity generation, as well as supporting National Grid notes that alongside other renewable sources of electricity. Changes to requirements, EU rules and regulations will gas demand, with customers using gas more continue to apply until the terms of the future flexibly, will create new operability challenges. UK relationship with the EU (including the These challenges will be discussed in more Internal Energy Market) are defined. detail in our new Gas Future Operability Planning document which is also being published at the end of November 2016.
Impact of changing customer requirements – in February 2016 we initiated an innovation project (Project CLoCC; Customer Low Cost Connections) funded through the Ofgem Network Innovation Competition (NIC). Project CLoCC is aimed at achieving the key objectives of reducing connection costs to the NTS to less than £1 million, and the time it takes to do this to less than one year. Project CLoCC aims to provide greater choice for our customers to connect to the gas transmission network. Gas Ten Year Statement November 2016 06
Executive summary
Future GTYS editions and feedback
We are always keen to hear your comments If you have any feedback to help us shape to help shape the structure and content of GTYS 2017, please contact us via the future Gas Ten Year Statements. We also seek mailbox (.Box.SystemOpertor.GTYS@ your views on the following areas of our gas nationalgrid.com) and of course any transmission business: other opportunities where we get to meet Asset Health. over the coming year. Industrial Emissions Directive. Network Development Policy. Chapter one 07 08
Introduction
one Chapter Chapter 2016 November Statement Year Ten Gas Chapter one Introduction to 94 up of pressures 7,600of anetwork We have market. gas competitive transportation of gas and facilitation of the secure the in part avital plays NTS The network Our flowing. gas the to keep schedules maintenance plans and asset replacement effective implement and We develop operate. to safe and purpose for fit are NTS the on assets our of all sure make must we standards are met. As Transmission Owner quality gas ensuring and pressures system balancing supply and demand, maintaining day-to-day operation of the network including the manage We reliably. and efficiently safely, points offtake to exit points supply from gas is to responsibility our transport primary Operator System As Britain. Great in (NTS) Owner of the gas National Transmission System Transmission and Operator System the We are Our role doWhat we do? 1.1 it. we’re how doing and we’re what doing on feedback your to get you with to engage keen We (TO). are Owner Transmission and (SO) Operator System as them to address doing we’re what discuss We also NTS. the operate challenges which impact the way we plan and future and current on you We update Transmission (NTS) System over the ten next years. of how we intend the National to operate and plan We write the Welcome to our 2016 Ten Gas Year (GTYS) Statement 1 Gas Ten Year StatementNovember2016 http://www.talkingnetworkstx.com/general-performance.aspx
km pipelines, presently operated at at operated presently pipelines, km GTYS bar, which transports gas transports bar, which to provide you with a better understanding to provide you understanding with a better
please see Our Performance see please our stakeholders (for more information, set outputs which have been agreed with have we (2013–21); framework this under RIIO-T1 the period within currently We are develop and deliver more sustainable energy. uses incentives to drive innovation to 2013/14. in by Ofgem RIIO implemented + Outputs) regulatory framework was Innovation =Incentives+ (Revenue RIIO The framework regulatory Our countries). to other (pipelines industrial consumers and interconnectors large stations, power sites, storage including customers connected to directly or customers, transportation to domestic and industrial onward for (DNs) Networks Distribution to eight transferred is gas points, 1). offtake exit At the (Appendix system the from points offtake exit to facilities storage and terminals coastal from agreed revenue allowance from Ofgem. from allowance revenue agreed an for return in outputs these We deliver Operator activities. Operator System our on information further provide which keypublications other and you, impact changes to our internal processes that may keyprojects, We summarise NTS. the on identify connection and capacity opportunities to you to help basis annual an on information planning cycle. We use GTYS GTYS is published at the end of the annual annual the of end the at published is publication to provide provide to .
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08 Chapter one 09
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is a world where economic expands on the FES is a world where policy publication gives details of of details gives publication on long-term environmental goals, goals, environmental long-term on interventions and innovation are both reducing in effective and ambitious focus The emissions. gas greenhouse high levels of prosperity and advanced the that ensure harmonisation European Progression Slow ProgressionSlow transition to ability society’s limit conditions consumers residential for Choices, world. develop. do policies and technologies new of This results in some progress towards decarbonisation but at a slower pace. Gone Green Gone Green Gone 2050 carbon reduction target is achieved. as quickly as desired a low-emissions to and businesses, are restricted, yet a range annual and peak gas supply for each of our four scenarios. The GTYS highlighting and information locational adding and planning future the for implications NTS. the of operation Our 2016 FES Our 2016
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. We have. We created 2 is a market-driven is a world where business where world a is Less focus focus Less
energy is used. is energy as usual activities prevail. Society is focused security on concentrating short-term, the on of supply and affordability over and above green ambition. Traditional sources of gas dominate, to electricityand continue how altering innovation little with world. High levels of prosperity allow for limited with innovation, and investment high technologies New intervention. government are prevalent and focus on the desires of consumers over and above emissions reductions. Progression No Progression No Consumer Power Consumer Consumer Power Consumer
available money publication in July 2016 Prosperity
Less money money Less More More http://fes.nationalgrid.com/ 2016 November Statement Year Ten Gas Figure 1.1 and environmentalHere are the political, economic, social, technological factors accounted for in our four 2016 Future Energy Scenariosfactors accounted for in our four 2016 Future We publishedWe our latest Energy Scenarios Future (FES) 1.2 EnergyFuture Scenarios 2 a credible range of scenarios, developed the on focus which feedback, industry following affordability and (sustainability, trilemma energy security of supply). The figure below (Figure1.1) scenarios. 2016 four the summarises Chapter one Introduction Future Operability Gas anew published also have we year This manage within-day customer requirements. developing our internal systems to better we’re how outlined have 4we 4. Chapter In 2, 3and Chapters in detail more in discussed is NTS the of requirements customers’ ofThe importance understanding our system. the operate and plan to challenging more ever it makes This time. customer behaviours, occurring at the same it’s the combined impact of multiple changing customer changing how they use the system, one of acase it’s not way. Often dynamic amore in to respond able to be has NTS The Customer behaviour is continually changing. Customer requirements Process (NDP). Development Network our of stage each at and impact on our day-to-day network operation their to show chapter each through run and (FES) Scenarios Energy Future the of backdrop a against considered all are themes These years. ten next the over network our develop and operate we how on have will they impact what outlines and GTYS year’s This years: ten next the over us for apriority to be continue keythemes Three Key themes 1.3 3 Gas Ten Year StatementNovember2016 publication going forward. collaborative amore to develop block building a as this use cover. We and will like look could document this what demonstrate to draft first a is This area. important to this focus greater www.nationalgrid.com/gfop Asset health. change. Legislative Customer requirements.
focuses on these key themes keythemes these on focuses ( GFOP 3 ) document to give to give ) document
is covered in Chapters 2 and 5. 2and Chapters in covered is network our on health asset of impact The network. our on needs changing the with this to balance have we but maintenance more needs network ageing An issue. health asset agrowing have we ageing, are that many including system, the on assets many so With through maintenance and replacement. risk network of level current the maintaining also while NTS the to operating applies that legislation safety all with comply we that It’s vital installations (AGIs). above-ground 530 and valves 20 control units, 24 compressor sites with 75 compressor 7,600 pipeline, of km comprises NTS The Asset health including IED, in Chapters 2, 3, 4 and 5. change, legislative of impact the We discuss be affected. Directive (IED) and how our network could the key elements of the Industrial Emissions GTYS of versions previous In network. our operate and plan we how on impact abig has change Legislative Legislative change we have outlined
10 Chapter one 11 Review and Close Project Execute Project Least regrets option or options? Chapter 5 Develop and Sanction Value fordelivered customers and end consumers under different options? The NDP defines the method for decision sanction, development, optioneering, making, delivery and closure for all our projects (Figure 1.2). The goal is deliver to projects that have the lowest whole-life cost, are fit for purpose and requirements. RIIO and stakeholder meet Select Option Invest in assets, develop commercial options or wider network options?
Stakeholder Engagement Establish Portfolio Risks of ‘Do Nothing’ option. Consider ‘rules’, ‘tools’ and ‘assets’. Chapters 4 & 5 we have continued with a Required system capability over the short/ medium/ long term Need Case Chapter 3
, we focus on the first three stages of
GTYS Trigger A change in the network, legislation, market or customer requirements. Chapter 2 The network development process Figure 1.2 1.4 process Network development 2016 November Statement Year Ten Gas In the NDP (Trigger, Need Case and Establish decision- internal our outline these as Portfolio) making process. The final three stages relateto solutions non-physical and build asset physical such as commercial options. These are briefly 5. Chapter in discussed In this year’s GTYS decision investment our makes that structure document the with transparent, more process Network our of stages initial the outlining (NDP). Process Development Chapter one Introduction cost-effective solution(s). robust, most the to provide together link stages the how and NDP the of stage each at happens what of overview aclearer you gives The chapter structure provided in Figure 1.3 2016 GTYSstructure Figure 1.3 GTYS 1.5 Gas Ten Year StatementNovember2016 6. Way Forward option development Network/Asset 5. AssetDevelopment Capability Development SO Tool/ 4. SystemOperation Options torespond network andSOcapabilities Do nothing/impactoncurrent 3. SystemCapability 2. NDPTriggers 1. Introduction
chapter structure
Requirements Connections (new/existing) Connections
Customer Entry and Exit Capacity Exit and Entry
System Flexibility System
Future Energy Future Energy
Historic Evolution of Supply & Demand & Supply of Evolution Historic year’s this throughout discussed are key themes three the of impact the FES our with Along
Scenarios
Current Supply & Demand & Supply Current
GTYS Future Energy Scenarios Energy Future .
Legislative Legislative
Change IED (IPPC, LCP, MCP & BREF) & MCP LCP, (IPPC, IED
Health Asset Asset Maintenance & Replacment & Maintenance
12 Chapter one 13
and NDP. NDP. and publication. These developments make sure that we can keep planning operate to a fit-for-purpose network safely and efficiently,to deliver value stakeholders. and customers our for development Asset 5. Chapter Here we consider the ‘Establish Portfolio’ stage solutions. asset our with It sets out NTS reinforcement projects that have construction under projects sanctioned, been and potential investmentin 2016/17 options for later years as a result of the It IED. also covers assessed all are These review. health asset our against the scenarios and sensitivities in our FES Chapter 6. Way forward and needs your meeting to committed We’re want you help to shape our GTYS This chapter discusses our plans over the coming year and tells you how you can get involved.
530 Number of above- installations ground in theNTS network , legislation and asset asset and legislation , Chapter 2. Network development inputs development 2. Network Chapter There are many inputs that ‘trigger’ our NDP. For every trigger we assess the needs of our network ensure to it remains fit for purpose. in a periodWe’re of great change, which may result in significant modifications to the way we currently plan and operate the NTS. We anticipate that we will have a wider range of triggers our to NDP in future. This chapter covers four key triggers: customer FES the requirements, health. discuss We these triggers and how they impact the current and future use of the NTS. capability System 3. Chapter This section outlines the current system capability of the NTS. System capability defines the maximum and minimum ability of transport to infrastructure network current our gas safely and effectively. explore We the Need Case This stage is of our where NDP. we capability requirements. system assess our provideWe information about entry and exit capacity, pressures, and the impact of the IED. operation System 4. Chapter This chapter explores part of the ‘Establish Portfolio’ develop We stage of the a NDP. solutions asset and non-asset portfolio of meetto the Need Case requirements. In this chapter we detail the specific ongoing and planned developments our to System tools). and (rules capabilities Operator 2016 November Statement Year Ten Gas Chapter one Introduction our customers. planning, which will benefit are we investment the about network analysis and industry energy the to inform scenarios these We use 2050. to out projections demand and provide supply and and affordability) sustainability (security of supply, on the energy trilemma are scenarios These based industry. energy the across from stakeholders from input involves and year every publication fit in? (FES). Scenarios Energy Future the is publications flagship The point starting for our for change. debate, and making decision intended to yearthat we are every beacatalyst produce enabler, an as facilitator. and informer SO publications The (SO), placed Operator System future. As we perfectly are to energy make that together sure we our shared secure working with you and our industry debate across energy to role play in leading the important an has Grid National How Ten the does Gas Year Statement 1.6 Gas Ten Year StatementNovember2016 JULY 2015 Scenarios Future Energy UK gasandelectricitytransmission
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Reports Summer operability inoperability our and transmission capability of the gas and electricity view long-term our We build Consultations Summer by complemented are and business planning activities and informsupport your publications are designed to winter. These or summer coming the for demand and supply electricity and gas of aview to provide season each of ahead them We publish transmission, we produce the around gas and electricity For short-term challenges Report Outlook Winter 2 015/16 every six months. months. six every and and Winter Winter Outlook and reports. reports. and 7 April2016 Report Outlook Summer 2 016
Future Energy Future Energy
(GTYS) (GTYS) The thatindustry can inform debate. information across the energy your views and share these publications, we seek publications. To help shape FrameworkOperability (SOF) and (GFOP) Planning (NOA), Gas Future Operability Network Options Assessment Statements and (ETYS Scenarios (FES), Ten Year also It on. working currently are we projects on update GTYS The (NTS). National Transmission System capacity is available on the gas exit and entry where and what NOVEMBER 2015 Statement 2015 Gas Ten Year UK gastransmission Gas Ten Year Statement Ten Year Statement Gas
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14 Chapter one 15
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publications. System Operability System System Operability System UK electricity transmission System Operability Framework 2015 NOVEMBER 2015 Framework (SOF) Future Energy Scenarios Scenarios Energy Future requirements future examine to for the operability of GB describes It networks. electricity operational in developments information provides and needs that can help towards technology, new developing that solutions and codes operability. system improve If you are interested in finding consider please more, out our reading Network Options Assessment Assessment Options Network (NOA) requirements across the across requirements transmission electricity GB network. If you are interested in finding out more about and capability electricity consider please operability, our reading The Scenarios (FES), Electricity Electricity (FES), Scenarios (ETYS) Statement Year Ten and Framework (SOF) Ten Electricity (FES), Scenarios (ETYS) Statement Year
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Network Options Options Network publications. publications. and presents the Network Options Options Network Electricity Ten Year Year Electricity Ten UK electricity transmission UK gas electricity transmission Network Options Assessment 2015 Electricity Ten Year Year Electricity Ten Statement 2015 FEBRUARY 2016 FEBRUARY NOVEMBER 2015 Assessment (NOA) Statement (ETYS)Statement to Scenarios Energy Future highlights and models network shortfalls capacity on the Electricity National GB the (NETS) System Transmission over the next ten years. If you are interested in finding out investment network the about recommendations that we these meet will believe the across requirements transmission electricity GB consider please network, reading Assessment (NOA) find out more about the electricity of view longer-term capability operability and by our reading The The Operability Framework (SOF) upon the future capacity future the upon described inrequirements ETYS network investment recommendations that we believe will meet these Scenarios (FES) (FES) Scenarios
Future publication publication publications. publications. publications. publications. Gas Future Operability Gas Future Operability Operability Future Gas UK gas transmission Future Operability Future Planning 2016 NOVEMBER 2016 Energy Scenarios (FES) and (FES) Scenarios Energy Statement Year Ten Gas (GTYS) Our Planning (GFOP) Future Energy Scenarios (FES), (FES), Scenarios Energy Future and (GFOP) Planning ten years. If you are interested in finding out more about provides our viewof the andcapability requirements development network required be will decisions that for the NTS over the next the longer-term view of gas of view longer-term the capability operability, and our reading consider please 2016 November Statement Year Ten Gas may highlight a need to respond we way the change our processes. The GFOP youto or other market signals. This, in turn, may lead us operational modify our to decisionand processes helps publication This making. maketo sure we continue to maintain a resilient, safe and secure NTS now and into the future. If you are interested in please more, out finding our reading consider describes how changing describes how requirements affect the future capability of the NTS out to 2050. It also considers how may requirements these and operation NTS affect Chapter one Introduction and case studies. case and breakout boxes relevant as well as response, in doing are we what and system the of requirements the changing of descriptions Including rich Narrative How tousethisdocument Figure 1.4 Year Statement 2016 our in Electricity Ten approach same the 1.4). Figure (see We’ll use section each of start the at messages main the we’ve highlighted And easily. and quickly content relevant find you to chapter, help each coded We’ve colour How to this use document 1.7 Gas Ten Year StatementNovember2016
. trends to be quickly identified. quickly be to trends enabling analysis, and data the support to charts Provides Figure with on a particular page. aparticular on with dealt topic main the introduce headings defined Clearly Main heading [email protected] .Box. at us email please touch, in to get like 2016 the of GTYS structure and content on views We’d your to hear love locate a particular piece of information. of piece aparticular locate can you that so headings identifiable easily by sections into divided is text main The Subheadings further commentary. and citations for Used Footnotes . If you’d. If
information. key provide analysis and the support to data Provides Table 16 . Chapter one Network development inputs Network two Chapter Gas Ten Year StatementNovember2016
18 17 Chapter two Network development inputs Network network requirements and future system future and operability. requirements network they because affect triggers to particular these respond (FES)Scenarios Energy Future customer requirements, focus four on triggers: (NDP). In this year’s Ten Gas Year (GTYS) Statement we Development our Network Several Process inputs trigger Gas Ten Year StatementNovember2016 Future EnergyScenarios Customer requirements Key insights back-up whenwindgenerationislow. has lowerutilisationbutstillprovides lot ofrenewable generationgas-fired plant as annualdemand.Inscenarioswitha Peak demanddoesnotdeclineassharply than peakdemand. Peak supplycapacityismuchhigher and couldreach 93%by2040. considerably sincetheearly2000s Import dependencyhasgrown decisions intheirprojects. before makingfinalinvestment can usethemtoreserve capacity arrangements are inplace.Customers of CapacityAgreement (PARCA) The PlanningandAdvancedReservation connecting totheNTS. solutions toreduce thetimeandcostof project, Project CLoCC,usinginnovative Innovation Competition(NIC)funded In February2016webeganaNetwork unconventional gassources. experience andtohelpfacilitate processes toimprove thecustomer We are reviewing ourconnections , legislative change and asset health. We health. asset , legislative and change
Asset health Legislative change maintenance andreduce costs. within theNDPtoavoidunnecessary We willconsider theremoval ofassets four tosix(2017–19). identified whichwillcoverRIIOyears Output Measures (NOMs)havebeen Approximately 3,500Network equating toover400assethealthchanges. health ofover2,000assetsontheNTS, £75 milliononimprovements tothe In 2015/16wehaveinvestedover compressor units. Directive (MCP)affects 26ofour64 The draftMediumCombustionPlant LCP affects 16ofourcompressor units IPPC affects 8ofour24compressor sites. Combustion PlantDirective (LCP). Control Directive (IPPC)andLarge the IntegratedPollutionPrevention and came intoforce inJanuary2013combining The IndustrialEmissionsDirective (IED)
18
Chapter two 19
Flexible Operation These triggers are interlinked (see Figure 2.1) so a change in one trigger will affect another. knowWe thatcustomers’ gas requirements introduced. is legislation new when change may has which legislation, emissions is example An resulted in generators closing or reducing their Combined more using and plant coal of use Cycle Gas Turbine (CCGT) plant instead. This patterns demand and supply the changed has on the network, which feeds into our FES.
Future Energy Scenarios Future
Capacity
Connections Evolving Supply and Demand è NTS Asset Health Customer Requirements Legislative Change Figure 2.1 Key NDP triggers As we outlined in our Chapter NDP defines 1, project and optioneering decision-making, our Certain projects. all for processes development triggers initiate Over the to the last NDP. 12 months,24 three triggers key have emerged requirements, customer work: NDP our from FES The health. asset and change, legislative 2.1 Introduction also influence the NDP. 2016 November Statement Year Ten Gas Chapter two Network development inputs Network needs might change under the four scenarios. and demand to show how our customers’ this chapter we outline the evolution of supply In NTS. the on patterns demand and supply of future the of view a stakeholder-influenced provide they as analysis system our of all of basis the as FES the We use happen. might energy landscape is changing and what Our FES explore how the increasingly complex Future EnergyScenarios information. more find to where you tells and processes capacity This chapter outlines our connections and our customers’ project development timelines. with align closely to more and needs changing customers’ our to meet processes capacity We have updated our connections and Customer requirements Gas Ten Year StatementNovember2016 maintained or replaced. to be need they if to establish network our health campaign prioritises key assets on need maintaining or replacing. Our asset and ageing are assets NTS our of Many Asset health chapter. this in outlined are changes keylegislative The network. our operate we how affect might run is market energy European the that way to the Changes requirements. capability future meet can we that sure be also We must one is in maintaining our network capability. new legislation and establish how critical each by affected compressor every at to look need NDP. our for We triggers main the of one is Legislation years. ten next the over network our operate and plan we how affect significantly will Recent legislative changes, such as the IED, Legislative change
20
Chapter two 21
Our Gas Transporter Licence stipulates stipulates Licence Transporter Gas Our that capacity can only be made available theseto parties. We canWe only enter into transportation Gas and shippers with arrangements (DNO). Operators Network Distribution
. We haveWe produced a high-level overview of our processes application capacity and connection and chapter included have We 2.1. Table in section numbers help to you navigate to to the relevant section of this year’s GTYS 2.2.1 Our connection and capacity application processes This section outlines how our customers’ customers’ our how outlines section This have We NDP. our trigger can requirements connections, customer on information provided entry capacity and exit capacity. Anyone wishing connect to the to NTS can arrange for a connection directly with us. 2.2 Customer requirements In addition we can reserve capacity for you; youhowever, must be aware that a shipper must buy and hold your capacity. 2016 November Statement Year Ten Gas Customer requirements Customer Chapter two Customer requirements Our connectionandcapacityapplicationprocesses Table 2.1 Gas Ten Year StatementNovember2016 requirements service key their and customers Our system. the from gas offtake and onto gas to flow have Capacity Rights connected customers currently and new Both customers. currently connected or and UNC) to the signatory not are (that New Site Developers Customers system the from gas toofftake Rights UNC) (DN) Distribution Network in information more Find long term) medium (short, system the onto gas to flow (UNC)) Capacity Rights Uniform Network Code tothe (signatory Gas Shipper GTYS (signatory to the tothe (signatory go to: go
and diversions modifications connections, new for (if required) NTS to the connections pipeline physical (A2O) Includes to offer Appliction Connections Our connection and capacity processes Appendix 2 2.2.2,Section 2– Chapter ✔ ✔ ✗
y+17) Auctions y+2 to years –gas (QSEC Capacity System Entry Quarterly Capacity Exit and Entry Section 2.2.3 Section 2– Chapter ✔ ✗ ✗ y+3) y+1 to years –gas capacity baseline (unsold within Windows Application Exit Appendix 2 2.2.4, Section 2– Chapter ✔ ✔ ✗ exit Capacity annual NTS Enduring Rights) – Evergreen –m+6 (Adhoc Rights) & Evergreen – to y+6 years y+4 –gas Annual (Enduring Window Application Exit Appendix 2 2.2.4, Section 2– Chapter ✔ ✔ ✗ flow changes flow for Capacity Flexible Appendix 2 2.2.4, 2.2.3, Sections 2– Chapter ✔ ✗ ✗
allocation) & capacity additional unsold/ – reserve (PARCA Agreement Capacity of Reservation Advanced Planning and Entry/Exit Appendix 2 2.2.5, Section 2– Chapter ✔ ✔ ✔ 22 Chapter two
23
We needWe assess to what impact a connection (new or modified) or a capacity change(supply or demand increase/decrease) will have on our operational capability our network and current strategies. In some cases we may need reinforceto our system ensure to we can capacity or connection customers’ our meet requirements. This was one of the key drivers for implementing the new process PARCA as we can now align any works we need The connection and capacity processes processes capacity and connection The NDP. our trigger customers our by initiated projects. customers’ our with complete to If you have any queries about our connections or capacity processes please contact the gas customer team directly. See Appendix 3 for our details. contact or retain ownership yourselves. ownership retain or summarises 2.2 Table the four different NTS available. currently are that connections gas on a chosen to System Operator/transporter, You can thenYou pass the connecting assets
. 1 http://www2.nationalgrid.com/uk/services/gas-transmission-connections/connect/ 1 We offerWe four types of connection the to 2.2.2 network our Connecting to NTS as well as modificationsexistingto connections NTS If you need a new connection or a modification anto existing NTS connection, you will need go to through the application offer to (A2O) process must (see section You 2.2.2). be aware that our connection (A2O) and Advanced and capacity (Planning processes Reservation of Capacity Agreement – PARCA) are separate. Our customers have theflexibility to initiate these two processes at their discretion; thehowever, two processes can become dependent on each The other. new PARCA process has been designedrun to in parallel with the A2O process prevent to the possibility of stranded capacity. will We only allocate reserved capacity if a full connection offer (FCO) has been progressed and accepted. itTypically, can months take up 12 to to progress and sign an This FCO. means that the A2O process (if required) needs to beto initiated at least months 12 before the capacity allocation date defined in the contractPARCA (see section and 2.2.5 Appendix 2 for more detail). 2016 November Statement Year Ten Gas To connectTo your facility the to NTS you will need initiate to the A2O process. can You either have other parties build the facility’s adopted connection the have or connection theby host gas transporter (depending circumstances). their upon Chapter two Customer requirements provides: UNC The an existing connection. customer connections and modifications to new for framework transparent and a robust The Uniform Network Code (UNC) Code Network Uniform The to Offer (A2O) Customer Connections–Application the same approach as a new NTS connection. using considered be will request this supply) gas in increase an (e.g. request arrangement connection to the achange to make need you If NTS gasconnections Table 2.2 3 2 Gas Ten Year StatementNovember2016 http://www2.nationalgrid.com/UK/Services/Gas-transmission-connections/Connect/Application-to-offer/ http://www.gasgovernance.co.uk/UNC Connections Interconnector International Storage Connections Exit Connections Connections Entry a formal connection application template connection offer full to a amodification to request how connection offer full of a content the of definition connection offer initial an of content the of definition to complete customers for
They can be for supply of gas from and/or delivery of gas to the NTS. tothe gas of delivery and/or from gas of supply for be can They These are connections to pipelines that connect Great later. Britain to back it other countries. delivering and NTS the from gas supplying for facilities, tostorage Connections – transporter gas another by operated system – Apipeline including: system connected of types (CSEPs). several points are exit There system connected at systems toconnected or (DN) network to point), (a supply a distribution premises tothe NTS the from supplied tobe gas allow connections These NTS. the into gas delivering of purpose the for facilities, Natural (importer) Liquefied or fields vaporisation (LNG) producing Gas gas from gas processing facilities todelivery Connections A pipeline operated by a party that is not a gas transporter, for transporting gas to premises topremises gas consuming more than 2,196 transporting for transporter, agas not is that aparty by operated A pipeline 2 NTS Gas Connections Categories provides provides
MWh per annum. can be found on our website our on found be can information on the A2O connections process The NTS connection application form and more the timescales associated with each stage. and process A2O the 2.2 summarises Figure – months to two –up offer connection – initial connection offer: timescales for National Grid to produce a connection offer (up to three months) to (up three offer connection initial/full to accept customers for timescales reconciled) and (variable offer connection full and (fixed) application fees for an initial connection offer application fees on an annual basis. the to review Grid National for a requirement (simple) or nine months (medium/complex) months nine or (simple) months to six –up offer connection full 3 .
24 Chapter two 25 2 Months 3 Months 3 Months 6 Months 3 Months 24 Months Offer Complex Full Connection Feasibility Study Applicant Decision Period Offer Medium Full Connection Feasibility Study Detailed Design, Applicant Decision Period Initial Connection Offer (Optional) Initial Connection Offer Construction and Commissioning
Offer Simple Not Required) Full Connection (Feasibility Study Figure 2.2 Process Application to Offer (A2O) 2016 November Statement Year Ten Gas Chapter two Customer requirements complies with Licence Condition 4B NTS: the on pressure defined of types primary four are There Connection pressures of the pipeline. connecting is responsible party for the costs of connecting pipelines. For all options, the other options for the installation and ownership Transmission Connection Charging describes The Statement and Methodology for Gas approach for connecting pipelines. preferred our is This you. with remain will pipe the of ownership facility, to your NTS the from If you want to lay your own connecting pipeline Connecting pipelines MOC. a for those than higher significantly be timescales for more complex connections can and costs The to deliver. years to three up take can and million £2 around generally is connection the of cost the site, agreenfield at (MOC) Connection Offtake aMinimum For activity. the to undertake used materials and time the on based calculated are costs When you connect to the NTS, the connection Transmission Connection Charging The Statement and Methodology for Gas connections is set out in the publication Our charging policy for all customer charges application Connection 5 4 Gas Ten Year StatementNovember2016 https://epr.ofgem.gov.uk//Content/Documents/Gas_transporter_SLCs_consolidated%20-%20Current%20Version.pdf http://www2.nationalgrid.com/UK/Services/Gas-transmission-connections/Connect/Application-to-offer/ operating conditions. normal under NTS the of sections most in 38 at set are pressures assured these of number Asignificant customers. DN to our supply pressures required to of maintain security – are These minimum UNC the in defined Assured Offtake Pressures (AOP) as Pressures. Offtake Assured Local Distribution Zone (LDZ) see offtakes NTS/ For offtakes. point meter supply NTS 25 of pressure –Aminimum UNC the in defined as Pressures Offtake Standard barg of gas will be made available at at available made be will gas of barg barg, the anticipated minimum pressure pressure minimum anticipated the barg, 4 , which 5 .
of operating an economic and efficient system. efficient and economic an operating of pressure management is a fundamental aspect as guaranteed be cannot pressures these 33 than lower no pressures plan normal NTS operations with start-of-day currently We year-to-year. and to-season throughout the day, from day-to-day, season- pressurecompressors. Offtake varies to operating inlets and extremities system the at lower and compressors, operating of outlets and points entry at higher to be tend pressures offtake NTS General connectionpressure information J2.2. Section UNC the with tier, accordance in pressure to any connected point, meter supply any for pressure’ a‘specified request also may Shippers pressures. operating torelate typical pressures and indicate how AOPs and ANOPs assess we how to understand you help regarding historical pressures which should information provide can we aNExA, revising connection you require. When agreeing or Agreements depending (NExA) on the Exit Network or (NEA) Agreement Entry Network the in stated be will pressures These 36 months’ notice. months’ 36 least at with ANOPs revised of notified be under normal operation, the customer will met be not will pressures these that likelihood If our analysis shows capability an increasing connection area under normal operation. their in NTS the on available to be likely connected customers the minimum pressure indicate and to our directly pressures Pressures (ANOP) Anticipated Normal Operating Maximum Operating Pressure (MOP) Entry Point/Terminals. NTS and Exit NTS to connected relevant is and at operate can NTS the of section each that pressure maximum the is This – These are advisory advisory are –These barg. Note that that Note barg.
– 26
Chapter two 27
tailored the to needs of Spotlight: Opening theup Network NTS connection. NTS A Web-based Connections Platform Connections Web-based A designed improve to the customer experience, this innovative tool will use geographical data and customer information so customers can compare and assess suitable options for an Innovative Physical Connection Physical Innovative Solutions at connections gas unconventional high pressure. of non-traditional customers. non-traditional of designed to meet the requirement requirement the meet to designed Optimised commercial process commercial Optimised
By considering the three areas above in was which project, this believe we unison, gas Ofgem’s through funding awarded provide will Competition, Innovation Network service, supporting the innovative truly a connections. gas future all of development can findYou out more at www.ProjectCLoCC.com Through Project CLoCC(Customer LOw Cost Connections), we are helping customers by minimising the time and cost to connect to the gasNational (NTS). System Transmission we’ve customers, our to listened Having about all is that initiative an launched hold that obstacles main the addressing entry and exit customers back from getting connected – the current cost £2 (up to million) and duration three (up to years). The goal of Project CLoCC is halve to the cost of a while million, £1 than less to connection reducing the time it takes from initial enquiry beingto connected less to than one year. every challenging fundamentally We’re that so process, connection the of aspect we can make life easier for customers and offer more choice – an NTS that can support connections. small and large both Project CLoCC is looking at three main areas:
. 6 MW/minute can be offered for http://www2.nationalgrid.com/uk/industry-information/gas-transmission-system-operations/capacity/constraint-management/ of the system location and/or the benefits of a higher pressure network. haveWe begun see to new types of connection biomethane and shale example for request, gas-powered natural and connections entry connections. exit stations refuelling vehicle connections these for requirements system The traditional more to different fundamentally are connections. project Many of you have told us that the existing connection regime does not meet your project’s connection NTS present our if and requirements, servicecontinues asit is,the majority of newand unconventional gas projects could be forced to try or networks, distribution to connections seek findto other ways of using the gas they produce. wantWe make to the NTS more accessible to these new gas sources, and are addressing this CLoCC. Project through challenge Evolving our connections process As a result of changes in the energy sector and development, gas unconventional in increase an we are seeing more connections the to NTS that were not viable or foreseen in the past. suppliers gas unconventional and new These see value in connecting the to NTS because 6 Ramp rates and notice periods Ramp rates and notice Directly connected offtakes restrictions have be can rates ramp Higher connection. simple a agreed subject completion to of a ramp rate study. Notice periods are typically defined as the number of hours’ notice for increases of up 50% and to greaterupto 25%, than 50% in terms of ramp rates and notice periods written into NExAs. A ramp rate (the rate at which the offtakeof gas can be increased at the offtake) of 50 of maximum offtake rate. These notice periods are required ensure to that pressures can be including stress system of times at maintained high demand. Notice periods will only be when circumstances these in enforced systemflexibility is limited. More detail regarding access system to flexibility can be found on our website in the Short Access Term System to Statement Methodology Flexibility 2016 November Statement Year Ten Gas Chapter two Customer requirements Aggregated System Entry Point (ASEP) Point Entry System Aggregated each at market to the available capacity entry NTS interruptible and firm make We can types capacity entry NTS UNC. the of terms the under NTS the of a‘User’ considered is shipper Alicensed capacity. entry obtain and for apply can shippers licensed Only NTS. the onto gas to flow right the shippers gives capacity Entry capacity NTS entry 2.2.3 construction lead-times. Therefore we need require significant planning, resourcing and may projects reinforcement scale, the on system pressures and capability. Depending require system reinforcement to maintain Connecting a new supply or demand may so”. to do it’s economic as long as premises, to connect request reasonable any with comply and system pipeline economical and efficient an maintain and develop “must we that states 1995) in 1986 amended (as Act Gas The andConnections capacity 7 Gas Ten Year StatementNovember2016 following: the of consists ASEP each at available made capacity firm of volume http://www2.nationalgrid.com/UK/Industry-information/Gas-transmission-system-operations/Capacity/Entry-capacity/ at an ASEP, over and above obligated levels. ASEP, obligated an at above and over capacity entry NTS firm additional release obligated) (non- Capacity Entry NTS Incremental commitment. by User backed and demand to market over and above baseline, in response (obligated Capacity Entry NTS Incremental Licence. Gas our Transporter by defined – as Baseline NTS Capacity (obligated) Entry ) – firm capacity made available available made capacity ) –firm – at our discretion, we can can we discretion, our –at
7 . The . The
accept or deliver capacity. to NTS the on required works reinforcement any and timeline project developer’s the both This new process allows alignment between project. their of stages initial the at us approach to developers to encourage designed was 2.2.5) section (see PARCA process The making. decision their inform help and NTS the on impact potential the assess can we that so projects their to discuss a position in are they as soon as us approach should as much notice as possible. Project developers parts: two of consists ASEP an at available capacity entry NTS Interruptible of volume The used. being not is capacity entry NTS firm that demonstrated be can it where ASEPs at market to the available made be can capacity entry NTS Interruptible for the Users affected. Users the for capacity rights, without any compensation entry NTS interruptible limit may we then If there is physical congestion on the network, as interruptible NTS entry capacity. entry NTS interruptible as market to the resold be can days of number a for unused been has that capacity firm entry NTS –any (UIOLI) it Lose or it Use to the market at our discretion. our at market to the interruptible NTS entry capacity available Discretionary – we can make additional additional make can –we
28 Chapter two 29
9
2016 incremental obligated capacity obligated incremental 2016 entry obligated incremental for order In capacity be to released, and therefore the obligated entry capacity level be to increased, enough bids for entry capacity must be received during the QSEC auctions pass to an economic test. If this capacity can be substitution capacity via available made then it will be increased. be will it then This involves moving unused capacity from one or more system points a point to where there is excess demand. If incremental capacity requires reinforcement works it can only be a into enters customer the when triggered (seePARCA section 2.2.5). If insufficient bids are received, capacity in excess of the obligated level can be released mean would which basis, non-obligated a on that the obligated capacity level does not auctions. future for increase Monday on opened auctions QSEC The 7 March 2016 and7 March closed 2016 on 8 March Tuesday No bids were2016. received for incremental capacity. entry Bids received at all ASEPs were satisfied from current unsold obligated levelsfor future entry obligated incremental no and quarters released. was capacity
. For long-term capacity shippers capacity long-term For . 8 Quarterly System Entry Capacity (QSEC). Annual Monthly System Entry Capacity (AMSEC). Rolling Monthly & Transfer Trade (RMTnTSEC). http://www2.nationalgrid.com/uk/industry-information/gas-transmission-system-operations/capacity/entry-capacity/ http://www2.nationalgrid.com/uk/industry-information/gas-transmission-system-operations/capacity/entry-capacity/ http://www2.nationalgrid.com/UK/Industry-information/Gas-capacity-methodologies/Entry-Capacity- Substitution-Methodology-Statement/ The QSEC auction is held every March and can be open for up ten to working days. NTS entry capacity is made available in quarterly (where strips Y+16 September to Y+2 October from Y is the current gas year). The AMSEC auction is run every February and NTS Entry Capacity is sold in monthly strips through September to from April Y+2. Y+1 This auction is as ‘pay bid’ andsubject a to minimum reserve price. The auction is open for four days from 8am 5pm. to Each auction window is separated two by business days as detailed in the UNC. The processing and allocation is completed after 5pm on each day. is heldThe on RMTnTSEC a monthly basis at the month ahead stage. Any unsold quantities fromAMSEC are made available in auctionthe RMTnTSEC andsold in monthly bundles. The auction and is as ‘pay bid’, subject the to same reserve price as AMSEC. can bid in three auctions: three in bid can 8 9 NTS entry capacity auctions obtain entryTo capacity a shipper can bid for capacity on the Gemini system through a series auctions of 2016 November Statement Year Ten Gas Chapter two Customer requirements point consists of the following: offtake each at available made capacity firm of volume The point. offtake each at market to the available capacity Peak Off and firm We make types capacity exit NTS UNC. the of terms the under NTS the of ‘User’ a considered is DNO or shipper A licensed capacity. exit obtain and for apply can DNOs and shippers licensed Only NTS. the off gas to take right the (DNO) Operators Network capacityExit gives shippers and Distribution NTS exit capacity 2.2.4 Gas Ten Year StatementNovember2016 above obligated levels. and over point offtake an at capacity firm at our discretion, we can release additional Incremental Capacity (non-obligated) – permanent. is capacity in increase This commitment. by User supported and demand to market response in baseline, above and over available made capacity firm Incremental Capacity (obligated) Licence. Gas our Transporter by defined Baseline Capacity (obligated) –as –
parts: three of consists offtake an at available capacity Peak Off of volume The used. being not is capacity firm that demonstrated be can it where points offtake at market to the available made is capacity Peak Off storage requirements. diurnal their to meet as well as Standard 1-in-20 Security NTS their to meet DNO the allows day. agas This of course the over rate asteady from away NTS the from gas of aquantity of offtake the to vary DNO the allows This available. capacity (flexibility) exit NTS make also we Users DNO our For affected. Users the for compensation any without rights, capacity Peak Off curtail may we then network, the on pressures low are there If
interruptible capacity. as market to the resold be can days, recent over unused been has that capacity firm –any (UIOLI) it Lose or it Use level as Off Peak capacity. Peak Off as level MNEPOR to the up capacity remaining any to release obligated are we forecast, demand 1-in-20 peak annual the of 80% than less published. Where this demand forecast is is Forecast Demand 1:30pmat NTS the Rate (MNEPOR) Offtake Point Exit NTS Maximum Unused Discretionary at our discretion. at our market to the available capacity Peak Off – we can make additional make can –we – during D-1
30 Chapter two 31
GWh/day. the capacity request is accepted. Capacity capacity unused moving involves substitution from one or more offtakes a point to where there is excess demand. If incremental capacity will customer the substitution via met be cannot need enter to as into reinforcement a PARCA works may be required meet to the capacity request (see section 2.2.5). the in submitted applications Successful AFLEC window will be allocated within ten business days of the application window Successful submitted applications closing. in the EAFLEC window (both increases and decreases) will be allocated on or September. 30 before a User apply to between 1 October to 30 June for capacity The capacity fromY. Year release date must not be earlier than the 1st of the (where month M is M+7 the month in later no and made) is application the which than 1 October The User in (or Y+6. Users in aggregate) must hold equal or to more than of the Baseline125% NTS exit (flat) capacity Ad-hoc Enduring Annual Exit (Flat) (Flat) Exit Annual Enduring Ad-hoc Capacity allows window application – This for the year in which the application is received or the application must exceed 1 DNOs apply for NTS exit (flexibility) capacity during July the 31 1 to enduring annual exit (flat) capacity application window. All capacity requests are subject network to analysis assess to the impact on system can requested capacity the Where capability. substitution through accommodated be
NTS exit capacity application windows windows capacity application exit NTS To obtain exitTo capacity a shipper can apply for capacity through four exit capacity windows: application Annual NTS (Flat) Exit Capacity (AFLEC) – capacity covering for is window application This allocated capacity The Y+3. to Y+1 period the and enduring not is window application this in therefore cannotbe increased or decreased. application this for period application The window July. is 31 1 to Capacity (Flat) Exit Annual Enduring window application This – (EAFLEC) Increase is for capacity covering the Y+6 period to Y+4 (where Y is the current gas year). The capacity enduring is window application this in bought and can be increased or decreased in a later application window (subject User to for period application The commitment). this auction July. is 31 1 to Capacity (Flat) Exit Annual Enduring application This – (EAFLEC) Decrease window allows a User decrease to their Y+1 Year from capacityenduring holdings Further window). July the following (October decreases and increases can be requested windows. application subsequent in auction this for period application The Julyis 2016. 15 1 to 2016 November Statement Year Ten Gas Chapter two Customer requirements (flat) capacity and NTS entry capacity. entry NTS and capacity (flat) exit NTS enduring to reserve users allow that provisions application hoc ad UNC the extends and exit capacity release mechanisms and development of the long-term NTS entry a on based is PARCA framework The capacity. exit and entry NTS both for (PCA) Agreement Consent Planning the and capacity exit NTS for (ARCA) Agreement Capacity of Reservation Advanced the 2015. replaces It 2 February on The PARCA framework was implemented date. future agreed an at customer can buy the reserved capacity while they develop their own project. The acustomer for reserved to be capacity exit or and/ entry NTS long-term allows that contract abilateral is (PARCA) Agreement Capacity of Reservation Advanced and Planning The PARCAThe framework 2.2.5 Gas Ten Year StatementNovember2016 of customers compared to the existing annual NTS capacity auction and application processes. application and auction capacity NTS annual existing the to compared customers of range awider to available therefore and developers project and parties UNC both to available are They their project become uncertain. should points’, ‘drop-out these of advantage take to able be would customer the a result, As arrangements. previous under than day gas first customer’s the to closer be would allocation Capacity allocation. capacity before points’ ‘drop-out logical with flexible, is process The project. their for processes connection and capacity NTS the align can customer The together. progress can projects the so required, is reinforcement where important particularly is this timelines; project our and customers the aligns It should their project to progress completion. available made be can capacity when around certainty greater with customer the provides It users. NTS other to available not will and user) NTS nominated their (or PARCA applicant the to exclusive be will Capacity NTS Reserved development without project full financial their commitment in on to formally early booking capacity. capacity exit and/or entry NTS reserve to customers help to designed is It Customers PARCA for Benefits
NTS customers/Users and us. and customers/Users NTS other customers, for PARCA benefits of anumber provides PARCA framework The shipper). and DNO (both aUser or a developer and by us agreed been aPARCA has where via substitution is only guaranteed for release provided be cannot that capacity Incremental and shipper). DNO (both aUser or PARCA by adeveloper a through reserved be also can Capacity processes. capacity (flat) exit NTS annual enduring and (QSEC) Capacity Entry System through the annual auctions for Quarterly provided via substitution will be made available be can that capacity incremental and capacity Baseline capacity, non-obligated incremental
32 Chapter two 33
Benefits for Us Benefits for other NTS Customers and Users to the existing auction/application mechanisms) increasing transparency for other NTS users. NTS other for transparency increasing mechanisms) auction/application existing the to The entry PARCA capacity process includes an ad hoc QSEC auction mechanism to allow other NTS users to compete for unsold QSEC before it isreserved. The process PARCA includes application a PARCA window during which other NTS users can approach us to sign a PARCA. This provides a prompt for those customers considering entering into a PARCA. It would allow multiple PARCAs to be considered together. This way, we will make best use of unsold levels of NTS capacity and existing system capability when determining how to meet our customers’ requirements. This will enable the most economic and efficient investment decisions to be made. Throughout thelifecycle of a PARCA, each customer must provide us with regular project progress updates. If a customer fails to provide the required information in the appropriate timescales, their may PARCA be cancelled and any reserved NTS capacity would either be used for another live or PARCA returned to the market. This will ensure that NTS capacity is not unnecessarily withheld from other NTS users. customerA PARCA will be required to provide financial security to reserve NTS capacity. If the customer cancels their PARCA, a termination amount will be taken from the security provided. This would be credited to other NTS users through the existing charging mechanisms. The timescales for the release of incremental NTS capacity to the applicant PARCA will be aligned to our timescales for providing increased system capability. This will take into account the Planning Act requirements for a reinforcement project. As a result, the risk of constraint management actions taking place and any costs potentially being shared with end consumerswill be reduced. They are available to both UNC parties and project developers and therefore available to a wider range of customers compared to the existing annual NTS capacity auction and processes. application Throughout thelifecycle of a PARCA, we will publish more information externally (compared Throughout the lifecycle of a PARCA, the customer will be required to provide regular project progress updates. would We not begin construction on any investment projectsuntil the customer has received full planning permission for their project. This will allow our case for any requiredinvestment to be clearly linked to our customer requirements. 2016 November Statement Year Ten Gas Chapter two Customer requirements NTS interconnectors. and storage NTS points, exit and entry NTS to all apply PARCA arrangements The UNC. to the up signed aparty be not may or may and adeveloper, as such party, third other any or DNO shipper, agas be might A customer when the capacity requested can be delivered. and how to determine PARCA application the in provided information the use We will application requesting the capacity they need. Initially, a customer will submit a PARCA PARCA framework structure 2.2.6 Gas Ten Year StatementNovember2016 to proceed to the next phase of activities. of phase next to the to proceed decision points where they can choose whether phased structure gives the customer natural 2.3). This 3(Figure 0to Phase Phase phases: logical four into split is PARCA framework The ahead. go will project their that certain is customer the once capacity (allocation of capacity) is only required to the commitment later. it Financial to buy option the with reserved been has capacity that customer the assures also It parallel. in projects customer and us to progress our respective the helps it PARCA that is the of A keyaspect 34 Chapter two 35 National Grid will issue the customer with the Phase 1 Output Report and the PARCA contract National Grid formally allocate the capacity to the customer (Allocation Date)
Within ten business days National Grid may trigger a PARCA Window and an ad hoc QSEC capacity auction customerWhere is a non code nominates party, a User(s) at least one month prior to capacity allocation date
National Grid initiate Phase 1 Works Customer provides demonstration information and annual financial security Customer submits application PARCA and PARCA application fee . 10
Capacity is delivered (Registration Date) National Grid formalprovides acceptance of a competent application to the customer within six business days National Grid initiate the Phase 2 Works Informal assessment completed
business days will conduct We network reinforcement if this is required National Grid receiptconfirm of the application within two National Grid thewill reserve capacity on behalf of the customer (Reservation Date) Customer approaches National Grid for initial project discussions
http://www2.nationalgrid.com/UK/Services/Gas-transmission-connections/PARCA-Framework/ Phase 3 Up to 24 months Phase 2 Up to 60 months Up to 6 months Phase 1 Phase 0 More information on the PARCA process is process PARCA the on information More provided in Appendix 2 andon our website 10 Figure 2.3 framework phases PARCA 2016 November Statement Year Ten Gas Chapter two Customer requirements [email protected] us know what you think by emailing us at You let can landscape. energy future the of elements important most the are believe you what on focus and evolve can document this so views your to hear keen We are on the future NTS capability and operability. effect the to quantify us require will which changes highlight can parties interested all future editions to be more collaborative so for is aim Our comment. and review your for 2016The GFOP future. the into and now NTS secure and safe aresilient, to maintain continue we ensure decision making and operational processes to our in to modifications leading signals market other and to you respond we way the in change GFOP The processes. our and challenges these may pose to NTS operation what and to 2050 out NTS the of capability changing requirements may impact the future The The to this area. increasingly important (GFOP) Gas Future Planning Operability a separate GTYS the of part impact of changesin your requirements as the considered have we years, previous In Gas Future Operability Planning 2.2.7 Gas Ten Year StatementNovember2016 GFOP document to provide a clearer focus focus aclearer to provide document document outlines how your is a first draft of this document document this of draft afirst is . This year we have developed developed have we year . This may trigger a .
complement the GTYS uncertainties. The GFOP needs, future operational challenges and and quantify future gas transmission network vehicle in which all can discuss participants aclear have currently not does market The changes will be documented in the GTYS the in documented be will changes and impacts resulting Any NTS. the across physical investments (assets) are considered (rules), operational arrangements (tools) and make sure that the right commercial options to parties interested all with to work We need 2.4). (Figure documents of suite Energy of document and our other Future Future other our and will fill that gap and and gap that fill will .
36 Chapter two
37
UK gas transmission Gas Ten Year Year Gas Ten Statement 2016 NOVEMBER 2016 GTYS how we are toresponding these impacts what options takingwe are forward what changes makingwe are to our decision- making processes what changes makingwe are to our operational processes and what the consequences couldbe on service.our
In outline: will we Actions What action we need take to now in our investments or processes etc.
will GFOP what the the what consequences couldbe on service.our what capabilitywhat potential what options we are aware of when they are are they when occur to likely required is their extent – or localised national what operability what issues we have identified
The allow us to clearly more articulate: Network Impact Network then assess We and impact the document what this could mean network our for and our customers. problemsWhat we may encounter and what possible there solutions may be. Anything decidewe take to on further action in will detailed be the GTYS.
will will GFOP provide a forstarting point and innovation collaboration. discuss potential discuss (rules, options tools and assets) quantify capability requirements identify and quantify risk operability understand impact the
Analysis thenWe complete network our basedanalysis scenarios the on assumptionsand we have made. The then help us to:
on first e.g. areas of greatest uncertainty or impact on the future of gas, network our Assumptions needWe make to assumptions the about uncertainmore the of elements and which future areas focus to customers. and will allow you to: you allow will
GFOP explore options/opportunities for for options/opportunities explore working. collaborative we should look at challenge our assumptions our challenge provide evidence for other areas might change might tell us what you think might happen tell us how your use of the NTS
Scenarios useWe our Energy Future Scenarios as the starting point for all our network future planning. The Figure 2.4 Operability Planning documentThe role of the Gas Future 2016 November Statement Year Ten Gas Chapter two Future scenarios energy increase in demand for gas-fired power power gas-fired for demand in increase manufacturing was counteracted by an During this period, declining demand in relatively stable at around 1,080 around at stable relatively was 2010, and demand 2005 gas Between Changing GB gas demand challenges. new to these to adapt strategies we are developing our planning and operational how outline 4we 3and Chapters In Operator. System the as us for challenges of a number day-to-day and within-day basis. This presents a on both demand, NTS zonal and national of NTS have led to increasingly variable levels the of use customers’ our in seen have we changes The future. in look might it how and decade last the over changed has demand The following section explains how gas Evolution demand of gas 2.3.1 wasscenarios highly positive. Overwhelmingly, 2015 our on received we feedback Most stakeholders from across the energy industry. energy scenarios with the involvement of future credible of aset produce we year Every years. ten next the over to evolve continue could supply and demand how of view our establishes It 2005. since changed have NTS the of requirements demand and supply, and how our customers’ This section describes the evolution of Future scenarios energy 2.3 11 11 Gas Ten Year StatementNovember2016 http://www2.nationalgrid.com/uk/services/gas-transmission-connections/connect/ TWh/year. TWh/year.
A-rated boilers. efficient, new, more with boilers gas old improving levels of insulation and replacing consumer awareness have led to homeowners Government incentives and heightened 2004, year. 2% Since of per average an at 400 of apeak hit demand gas Residential gas. of usage the in increase to asharp led This fuel. generation thermal preferred the as returning to gas led coal of price the in 2015 arise until when sector marginal within the UK power generation over gas for power generation. Gas remained favoured was coal that meant prices coal lower as sharply fell 2010, In demand gas generation. 2016 publication (FES) inscenarios our Future Scenarios Energy out more information about each of the You find can Scenarios. Energy Future factors accounted for in our four 2016 political, economic, social and technological 1.1), 1(Figure Chapter In the showed we year. this changes big no are there and 2016 to the Future Scenarios Energy approach our reaffirmed year. on This year consistency to see want they that us told stakeholders our TWh/year in 2004 and has fallen steadily steadily fallen has and 2004 in TWh/year 11 .
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Chapter two 39