CIPS Branch Event April 18 th 2013 About Me Just a few words - - PowerPoint PPT Presentation

CIPS Branch Event April 18th 2013

About Me

 Just a few words

WINGAS UK Limited 2

Disclaimer



This presentation (and any information which has been or may be supplied in writing

• r orally in connection with it, or in connection with any further enquiries in respect of

it) (the “Presentation”) may contain confidential information relating to WINGAS UK Limited (WINGAS) , its affiliated companies and/or its and their third party customers, suppliers, contractors, representatives, agents and partners. This Presentation may not be copied, reproduced or distributed without the prior consent

• f WINGAS.



The information within this presentation has been prepared in good faith by

• WINGAS. However no warranty or representation, express or implied, is made as to

the accuracy, correctness, fitness for purpose, completeness or adequacy of any statement, estimate or opinions contained within this Presentation



This Presentation is not intended to provide the basis for an investment decision Market price, commentary and information contained are for general information

• nly. Recipients must not rely on the information contained



The Presentation remains the property of WINGAS

WINGAS UK Limited 3

The perfect storm: Demand

WINGAS UK Limited Source National Grid 4

The Perfect storm: Storage Picture

WINGAS UK Limited Source National Grid 5

The Perfect storm: UK Gas Flows

WINGAS UK LIMITED Source National Grid 6

 March 22nd 2013  Prolonged low temps  Global gas  Interconnections  Norway  UK Storage

WINGAS UK Limited 7

CIPS: Objectives

 Understand the traded energy market in the UK  How this market links to the EU  Market Participants: Suppliers, Transporters, Regulators and

Consumers

 Typical contract structures

WINGAS GmbH, Kassel 8

CIPS

The traded energy market: UK

Traded Energy Market: UK History

WINGAS UK Limited 9



1986 Gas Act: Separation of supply and transportation



1989: Electricity Act - De-regulation and un-bundling foundations



1990: CEGB is dismantled: National Power, Nuclear Electric, National Grid



1995: Gas Act: Establishing framework for market participants Uniform Network Code



2001: New Electricity Trading Arrangements NETA – The commoditisation of electricity



2005: BETTA - UK wide trading framework for electricity

10

Metering 1% Climate change levy 12% Transportation 9% Margin 2% Commodity 76%

CIPS: Cost Breakdown Natural gas

11

CIPS : The cost of Electricity

Commodity 51% Obligations, Levies Green initiatives 18% Transportation And Metering 27/% Margin 4%

12 World Coal Market World LNG Market World Freight Market Henry Hub Gas Market Global

• il

Market UK Power Market UK Gas Market German Power Market EUETS EU Gas Market French Power Market Exchange rates Underlying economic trends Weather Emerging economies Nuclear Power turn downs

Energy Market drivers

TECHNICALS

UK Supply bulid up : Last 365 days

WINGAS UK Limited Source National Grid 13

UK Gas System

WINGAS UK Limited 14

UK Power Generation

WINGAS UK Limited 15

The National Transmission System

WINGAS UK Limited 16

 NTS  85bar operational pressure  2500 miles long  140 exit points  At least 60 to Generation and Major Industry  National Grid Owner and Operator  Transportation Charge:  NTS Exit Capacity  NTS Commodity

CIPS: Transportation and Delivery

WINGAS UK Limited Chart: National Grid 17

 Local Distribution Zone (LDZ)  3 pressure ranges HP, IP LP  12 Zones  North West, London, W Mids, E Anglia  Owned by the National Grid  South and Southeast- Scotia  Wales & South West – Wales and West  North & Yorks - Northern Gas Networks  Transportation charges:

 LDZ Commodity Charge  LDZ Capacity Charge

The Network Code

 The National Grid describes the codes as

“the hub around which the competitive gas industry revolves, comprising of a legal and contractual framework to supply gas and transport gas. It has a common set of rules for all industry players which ensure that competition can be facilitated on level terms” The code is over 450 pages and covers all aspects

• Health, Safety, Access, Consequences
• The UNC commitment is made by consumers within a supply agreement

WINGAS UK Limited 18

Procurement Best Practice

WINGAS UK Limited 19

 Start point: What is the goal of my organisation?  Energy Policy: The foundations on which delivery will be made  Energy Strategy: What is your risk appetite?  Market Approach: Direct or Consultant?  On going review: Budget control

CIPS Event: Consultant market

WINGAS UK Limited 20

 UK: OFGEM: Regulation  UK: Mergers and Acquisitions  EUROPE: Growth potential as markets change  UK and Europe: Carbon / Sustainable

agenda

 UK & EUROPE: Engineering support

services

Current Trends : Energy Procurement

 Payment Terms greater focus on longer terms from most industrial sectors  No surprises: Take or Pay levels, Transportation charges  Carbon: CFD, EUETS CRC & FITS  Nimble approach from smaller supply companies  Transparency, accountability and accesability

WINGAS UK Limited 21

Value Added Services

 Often requested, rarely utilised  What does value added mean?  Training and seminars  Advice and support  Equipment  All of these require Investment

WINGAS UK Limited 22

Procurement Strategy

WINGAS UK Limited 23

Procurement Best Practice: Summary

WINGAS UK Limited 24

 Start point: Set your course accordingly  Energy Policy: Involve all stakeholders  Energy Strategy: maintain focus  Market Approach: Test, Question & Consider the direct and indirect  On going review: Don’t limit yourself to the present – 5 years

European Markets: Open?

WINGAS UK Limited 25

 Transparency of Information

 UK has lead the way  EU still not fully, completely unbundled

 Gas and Pipeline Unbundling is a success though

 Access is simplified and standard for all participants  Recent UK shortfalls in storage combined with a price spike has resulted in draws for EU storage

and delivery into the UK market

 The expected scenario: Consolidation of Energy Companies  The current trend: Traditional transporters and re-sellers now looking to become

suppliers, and in some cases succeeding.

European hubs.

NBP

Physical point Virtual point

PEG N TTF ZBH GP NCG BG

More energy – together

Wintershall Holding GmbH Kassel WINGAS GmbH Kassel OAO Gazprom Moskow WINGAS UK Limited 27 GASCADE Gastransport GmbH Kassel OPAL Gastransport GmbH Kassel WINGAS Holding GmbH Kassel astora GmbH & Co. KG Kassel WINGAS Uk Ltd. Richmond WINGAS Storage Uk Ltd. London WINGAS Benelux s.p.r.l. Brussels NEL Gastransport GmbH Kassel W&G Beteiligungs-GmbH & Co. KG Kassel

More energy – together

WINGAS UK Limited 28



Customers in more than 200 countries and in virtually all industries



Top 3 market position in 75% of our businesses



Know-how 70 major R&D sites and >1,900 research cooperations’ with customers, science and partners



Strong R&D pipeline; No.1 in Patent Asset Index



Competency and skill based orientation



Success founded on innovation and a fresh approach

More energy – together

WINGAS UK Limited 29



16% of Global Gas Reserves



20% of Global Gas Production



28% of Europe supplied



Major Shareholder in Nord Stream



Fully integrated E&P, Transportation and Marketing

WINGAS GmbH, Kassel 30

THANK YOU

We are looking forward to your telephone call +44 (0) 20 8948 9685

SALES@WINGAS-UK.COM