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Agenda Item 6: Gas ENC Approach Overview

RfG Workgroup Meeting 5 20 November 2014 Colin Hamilton

NG NTS Approach for Engagement

• Dedicated NG workshops were held to lay out the

implications of the 3rd package and outline code concepts & developments. Led to:

• Ofgem/DECC EU Stakeholder Group
• Concept of a dedicated JESG type group was

considered.

• Consensus view was that existing updates within

existing Transmission WG were sufficient.

• Standing agenda item for the past 3 years

2

NG NTS Approach for Engagement

• European WG created January 2014
• Separate group required to allow
• fullest industry involvement
• Consideration of all issues affecting UNC
• Held same day as monthly Transmission WG
• Additional EU WG meetings now occur for

detailed consideration of each Code.

3

EU Updates to GB Stakeholders

 Regular updates are provided by NG NTS to GB stakeholders via DECC/OFGEM stakeholder meetings, Transmission/EU Workgroup Updates (monthly), Industry Fora (where requested), NG open meetings (ad hoc), Bilateral meetings, etc.  The updates have covered the following:

 Development of the European Framework Guidelines or Code – highlighting emerging concepts, rules, encouraging involvement in and detailing EU engagement opportunities, phase completion dates and implementation dates  National Grid Impact Assessments (IAs) – highlighting areas of change for GB regime  Comitology Updates – highlighting changes made by the EC following discussion with member states  Pre Modification Updates – providing further detail on the changes identified and/or how they maybe implemented

 Details on high level implementation roadmap are communicated

Additional support for stakeholders

 NG Web page created Dedicated web page to provide a comprehensive resource for all EU code implementation issues.  Future updates…..  Code mod proposals….

Programme Road Map showing Phased Implementation

Notes: 1) Short term UIOLI may not be required for NTS 2) Long term capacity auctions may need to be delivered in conjunction with short term auctions

Coordination with neighbours

 In order to facilitate the implementation of the EU regulations on CAM at GB IPs, the Regulators requested that the adjacent TSOs develop a ‘Concept Document’  Concept document aimed to outline the key principles all the TSOs need to adopt in order for the EU Codes to be successfully implemented  Therefore an element of parallel working is required…..  How NRAs coordinate has also to be considered.  This process has facilitated dialogue between connected parties

Approach to UNC Modification Plans for Phase 2

 Phase 2 of programme required the implementation of several codes

 NG NTS provided initial views on the number and types of Mods required to deliver the phase 2 changes  Stakeholder views were sought on these initial plans

 NG NTS considered whether to develop a series of mods

• r one “super mod”

Approach to UNC Modification Plans for Phase 2

 One “super” modification ensures coordinated implementation and coherent legal text change  NG NTS concluded that it was not appropriate to raise

• ne “super” Mod, as this was likely to be very complex

and delay timelines  Proposal that it was easier and more flexible to develop several modifications

 Requires some degree of parallel working  Risks arise if some changes are approved and others delayed  Legal text must be individually implementable

Industry was asked to respond on this approach

Approach to UNC Modification Plans for Phase 2

 Stakeholder feedback supported the multiple modification approach  Each Code Lead was tasked to indicated how best to implement their respective code – whether this be 1 Mod

• r a Mod per area of change

Stakeholders consulted on approach

 Modifications proposed to go to Workgroup for development/discussion with UNC parties and not straight to consultation

 Small proposals should take up to 6 months to develop  Larger proposals could take around 6-9 months to develop

Phase 2 UNC Modifications Potential Timescales

EU Network Code Area of change Panel Submission Workgroup Development UNC Consultation Gas Balancing (BAL) Information Provision March 2014 2 Months July 2014 Nomination Process at IP’s April 2014 6 - 9 Months Nov 2014 Capacity Allocation (CAM) CAM / CMP Compliant Capacity Auctions May 2014 6 - 9 Months Q4 - 2014 Interoperability & Data Exchange (INT) OBAs / allocations August 2014 6 Months Q1 - 2015 Interconnection Agreements/Contract Changes (facilitating Modification ) Q1 - 2015 3 Months Q2 - 2015 Ancillary Agreements December 2014 3 Months Q2 - 2015 Units (reference conditions) November 2014 3 months Q1 - 2015