Code Modification Forum Ashling Hotel, Dublin Wednesday, 11 th - - PowerPoint PPT Presentation

Code Modification Forum

Ashling Hotel, Dublin Wednesday, 11th October 2017

Agenda (1 of 2)

1. Review of minutes from last meeting 2. Review of Action Items from last meeting 3. Natural Gas Emergency at Corrib 4. General Items Update 5. GNI Scheduled Maintenance Update 6. Code Modification Proposal

‒ A071 Alternative Capacity Arrangements in event of GNI Interruptions to Flows

7. Code Modification Proposal

‒ A080 Option to Provide Monthly Settlement from Disbursements Account

8. Code Modification Proposal

‒ A083 Interruptible Capacity at Non IP Entry Points

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Agenda (2 of 2)

9. Code Modification Proposal

‒ A084 Replace the NTS SO & TO exit Commodity cost element in the Balancing Transportation Cost formula with the Optional Commodity Charge

• 10. Intra-day Nomination Patterns and Profiles
• 11. Balancing
• 12. VRF Tariffing Structure
• 13. Gas Electricity Interaction
• 14. BrExit and ROI Gas Market
• 15. Transparency Data
• 16. AOB

Next Code Modification Forum Meeting

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1. Review of minutes from last meeting

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2. Review of Action Items from last meeting

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ID Action Responsibility Status Priority C483 Transporter is to investigate adding further enhancements to the VRF product: 1. Notification if additional VRF capacity available. 2. Within-day auctions 3. Interruption time-stamping Transporter Open High C530 Release revision Version 5.02 of the Code of Operations which reflects any outstanding Code Modifications approved by the CRU subsequent to the 1st of October 2015 Transporter Open High C538 Transporter to consult with each shipper about issues surrounding their nomination patterns and profiles. Transporter to provide an overview on the outcomes of such industry consultation at the August CMF Meeting. Transporter Propose to close High C539 Transporter to further provide timelines of next steps to further review and consult on potential amendments to cashout prices and tolerances, after finalisation of the tender process to secure a Trading Platform Service Provider. Transporter Open Medium C541 Regulator to look into Entry Point Procedures at domestic entry points, and revert back to industry Regulator Propose to close High C542 Transporter to look at the applicability of CMP measures at IP Entry Points to domestic entry points, and revert back to industry Transporter Propose to close High

Code Modification Forum – Open Actions (Slide 1 of 2)

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ID Action Responsibility Status Priority C543 Upstream Operator(s) asked to look into Entry Point Procedures and contractual arrangements at domestic entry points, and revert back to the Regulator/CMF regarding same Upstream Operator(s) Open High C544 Regulator to issue a Commission Instruction regarding Code Mod A078 Regulator Propose to close Medium C545 Regulator to issue a Commission Instruction regarding Code Mod A084 Regulator Propose to close Medium C546 Industry to provide views as to whether it considers it necessary to extend the current Financial Security Policy to Trading Platform trades involving the TSO and counterparties Industry Propose to close High C547 Transporter to issue a Gantt chart of provisional expected timelines in terms of the

• utstanding steps to be completed, prior to the TSO participating on an IBP Trading

Platform Transporter Propose to close Medium C548 Industry to provide its views on potentially amending the 2nd Tier imbalance multipliers (75% and 125%), previously introduced via Code Mod A074 Industry Propose to close High C549 Regulator to review potential amendments to the current VRF registration fee, as an interim VRF pricing solution Regulator Propose to close High C550 Transporter to circulate a proposed model to calculate an amended VRF interruption algorithm for industry review and input Transporter Propose to close High

Code Modification Forum – Open Actions (Slide 2 of 2)

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3. Natural Gas Emergency at Corrib

Code Modification Forum

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4. General Items Update

Code Modification Forum

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Code of Operations 5.02

• Version 5.02 will be released in due course, to reflect:

‒ Code Mods A071, A079, A080, A081 and A082 (all of which have been approved by the CRU).

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5. GNI Scheduled Maintenance Update

Code Modification Forum

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Network Maintenance Update

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Location Nature of Works Planned Timings (Subject to change) Duration (days) Entry/Exit Points Affected Impact on flows at entry/exit points affected

• 1. Upstream Operator Maintenance

GNI have been advised of the following scheduled Maintenance Upstream of Entry Points:

2017/ 2018 GNI Proposed Maintenance Days

Maintenance Programme Gas Year 2017/2018

Date Duration Entry Points Commentary 8th Nov 2017 1 day Corrib May be required for meter upgrade works at Cappagh. Depends on if all works are completed during the Corrib initiated shut-down in September Note: Maintenance day no longer needed 1 day Inch Will be required to install a new UPS at Middleton. May not affect flow. 7th Feb 2018 1 day Corrib Not scoped yet. 1 day Inch ILI run between Inch, Lochcarrig Lodge and Caherlag. Date to be finalised with the pigging contractor. 9th May 2018 1 day Corrib Not scoped yet. 1 day Inch Odorant tank refill at Inch. Zero flow whilst this takes place. 4th Jul 2018 1 day Corrib Fuel gas skid connection at Cappagh South. May not affect flow 1 day Inch Not scoped yet 12th Sep 2018 1 day Corrib Not scoped yet 1 day Inch Not scoped yet

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Note: Dates and maintenance programme may be subject to change

IT Maintenance Update

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Nature of Works Planned Timings (Subject to change) Duration (days) Systems Affected Nothing to report

Please note the above works/timings/duration are subject to change

6. Code Modification Proposal A071: ‘Alternative Capacity Arrangements in event of GNI Interruptions to Flows’

Code Modification Forum

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A071: Update

• Legal Drafting circulated for Industry Consultation.
• Following discussions with an industry respondent, proposed amended Legal Text has been agreed.
• Provisions of Code Mod A071, which is now effective:

1. Maintenance Plan published on/before 31 May, in advance of Gas Year. 2. Maximum Maintenance Day limits for IP Entry Points/Entry Points is 5 days. 3. Minimum Notice Period for variation of scheduled Maintenance Days in Maintenance Plan is 7 days. 4. Capacity Charge Rebate payable to affected Shippers at IP Entry Points/Entry Points for days where Restricted Capacity Days are declared for Maintenance at IP Entry Points/Entry Points which are in excess of 5 day limit (or where variation from scheduled date has not been notified within Notice Period). 5. Capacity Charge Rebate is payable on the basis of the difference between Shippers’ Active (IP) Entry Capacity and Shippers’ Available (IP) Entry Capacity at the Affected (IP) Entry Point on the Day at the applicable Tariff. 6. Capacity Charge Rebates will be included in the invoice, in respect of the Month following the Month in which the relevant Restricted Capacity Day occurs.

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7. Code Modification Proposal A080: ‘Option to Provide Monthly Settlement from Disbursements Account’

Code Modification Forum

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Update on A080

• Commission Instruction circulated, approving A080 and directing GNI to proceed to legal drafting.
• Legal Drafting is currently being finalised.
• Transporter has established the Oracle and IT interface requirements to implement A080.
• A080 has been implemented since 1st October 2017.

8. Code Modification Proposal A083: ‘Interruptible Capacity at Non IP Entry Points’

Code Modification Forum

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A078 and A083: Update from Regulator

Re Action Item C544: The Regulator has issued a Commission Instruction and Rationale re Code Mod A078.

• The Commission has decided to reject Code Modification A078 on the basis that A083 is now a proposed

alternative to Code Modification A078 which the Commission is currently reviewing.

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A083: Update from Regulator

Action Item: C541: Regulator to look into Entry Point Procedures at domestic entry points, and revert back to industry. Following this review, the Regulator notes the following:

• Entry Point Procedures are referenced in Section 3.2 Part C of the Code of Operations and where such

procedures have been adopted at an entry point, they can impose conditions and/or restrictions on shippers who wish to reserve capacity at that entry point.

• The CRU has been advised by GNI that Entry Point Procedures are not in existence at any domestic entry point.
• Furthermore the CRU understands that no request has been made for their introduction.
• The CRU understands that all shippers who requested capacity at domestic entry points have been allocated such

capacity, and hence the CRU is satisfied that the capacity market is working effectively.

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Action Items: C542: Transporter to look at the applicability of CMP measures at IP Entry Points to domestic Entry Points, and revert back to industry.

• The Transporter has reviewed the applicability of the IP Congestion Management Procedures at IP Entry Points

to domestic Entry Points.

‒ The Transporter wishes to confirm that concerning capacity bookings, no Shipper has breached the ‘average 80% usage requirement’ at domestic Entry Points. ‒ The Transporter will continue to monitor capacity booking usage at domestic entry points and notify the Regulator immediately if any breaches of an 80% usage threshold occur.

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A083: Update from Transporter

Action Item C543: Upstream Operator(s) asked to look into Entry Point Procedures and contractual arrangements at domestic entry points, and revert back to the Regulator/CMF regarding same.

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A083: Update from Upstream Operator

9. Code Modification Proposal A084:

‘Replace the NTS SO & TO exit Commodity cost element in the Balancing Transportation Cost formula with the Optional Commodity Charge’

Code Modification Forum

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A084: CRU Decision

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C545: The Regulator has issued a Commission Instruction and Rationale re Code Mod A084.

• The Commission has decided to reject this A084 on based on the reasons outlined below:

1. The TSO has no visibility of the source/transportation route of gas imported via Moffat and is only aware that Shippers wish to nominate gas. Obtaining such accurate information would require the development and implementation of systems in this regard at a cost. 2. The proposed Code Mod would impact the Disbursements Account (i.e. if relevant Shippers are to pay less for their imbalance charges, this will result in other Shippers paying more).

• In light of these points, the Commission considers the conventional approach to calculating the

Imbalance Gas Transportation Cost to be appropriate, as it references the NBP to Moffat benchmark transportation costs in all instances.

Overview of Status of Active Code Modifications

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Code Mod No. Description of Code Modification Current Status A071 Alternative Capacity Arrangements in event of GNI Interruptions to Flows Following discussions with an industry respondent, proposed amended Legal Text has been agreed A078 Overrun Charges at Domestic Entry Points Commission Instruction and Rationale issued, rejecting A078 A079 Classification of CNG Exit Points as Daily Metered (DM) Legal text complete A080 Option to Provide Monthly Settlement from Disbursements Account Legal Drafting is currently being finalised A081 Amendments to Capacity Auction Timelines to Comply with EU Capacity Regulations (CAM NC) Legal text complete A082 Establishing Framework and Rules for the Acquisition and Release of Incremental Capacity at IPs Legal text complete A083 Interruptible Capacity at Non IP Entry Points Action Items C541 and C542: Propose to Close A084 Replace the NTS SO & TO exit Commodity cost element in the Balancing Transportation Cost formula with the Optional Commodity Charge Commission Instruction and Rationale issued, rejecting A084

• 10. Intra-day Nomination Patterns and Profiles

Code Modification Forum

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Industry Consultation re Intra-day Nomination Patterns and Profiles

• The Transporter has continued to have discussions with individual shippers re their intra-day nomination patterns and

profiles.

• Transporter also attended an EAI Workshop (4th October), related to intra-day issues in the context of i-SEM market

changes.

• Certain Shippers who are active at Moffat have informed the Transporter that the timing of their nominations is

dependent on instructions received from their offtaking Shipper, which they do not control and in certain instances do not have INFR type provisions in place.

• Other Shippers have similar issues in place with upstream counterparties, where they do not have full clarity on all

their Entry/IBP Buys until later in the Gas Day.

• There is a general consensus that Shippers with LDM offtakes should be nominating at least what has been metered.
• The Transporter is attending an ENTSOG Balancing Best Practices Workshop on 23rd October, at which Within-Day

Obligations and Line-pack Flexibility Services will be discussed.

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Notices of Potential Supply Deficits

Notification Sent Please be advised that for Gas Day XX/XX/XX, as of XX:XX, nominated Entry Flows into the network are below metered flow and aggregate end of day Exit nominations by XX GWh. GNI cannot flow gas at the Moffat Entry Point without the requisite Confirmed Quantities and if sufficient Moffat Entry Nominations are not received shortly, GNI will be required to take Balancing Buy actions and corresponding Balancing Sell actions later in the day. These Balancing Actions will result in considerable transactions being levied to the Disbursements Account with a consequent detrimental effect on all Shippers costs.

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Overview of Notices of Potential Supply Deficits issued and Balancing Actions taken on associated dates – last three months (Slide 1 of 2)

Date Notification Sent Time Sent Nominated Entry Flows below Exit Noms by (GWh): Notes Bal Buy Action Bal Sell Action

04/07/17 Notice of Potential Supply Deficit 12:19 59 05/07/17 Notice of Potential Supply Deficit 14:51 65 10/08/17 Notice of Potential Supply Deficit 14:32 39 01/09/17 Notice of Potential Supply Deficit 16:35 51 01/09/17 Notice of Potential Supply Deficit 19:14 36 01/09/17 Curtailment Notice Corrib Terminal Operator has issued a Curtailment Notice to GNI affecting the Bellanaboy Entry Point resulting in reduced flows from 11:00 to 15:00 13/09/17 Notice of Potential Supply Deficit 12:00 107 18/09/17 Notice of Potential Supply Deficit 11:18 126 18/09/17 Notice of Potential Supply Deficit 17:14 60 19/09/17 Notice of Potential Supply Deficit 11:24 65 19/09/17 Notice of Potential Supply Deficit 21:15 40 20/09/17 Notice of Potential Supply Deficit 10:07 92 5,000,000 2,500,000 21/09/17 Notice of Potential Supply Deficit 08:28 135 15,000,000

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Overview of Notices of Potential Supply Deficits issued and Balancing Actions taken on associated dates (Slide 2 of 2)

Date Notification Sent Time Sent Nom’d Entry Flows below Exit Noms by (GWh): Notes Bal Buy Action Bal Sell Action

22/09/17Notice of Potential Supply Deficit 10:13 89 5,000,000 22/09/17Restricted Capacity Day Notice Due to unavailability of Entry Flows from Bellanaboy 22/09/17Curtailment Notice Corrib Terminal Operator has issued a Curtailment Notice to GNI affecting the Bellanaboy Entry Point resulting in reduced flows from 05:00 to 04:59 24/09/17Notice of Potential Supply Deficit 17:43 71 5,000,000 25/09/17Notice of Potential Supply Deficit 10:19 134 29/09/17Notice of Potential Supply Deficit 12:36 76 5,000,000 01/10/17Notice of Potential Supply Deficit 07:53 84 02/10/17Notice of Potential Supply Deficit 09:09 90 5,000,000 03/10/17Notice of Potential Supply Deficit 20:08 34 04/10/17Notice of Potential Supply Deficit 07:44 80 04/10/17Notice of Potential Supply Deficit 21:47 30

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Overview of All Balancing Actions taken over last Three Months

2,000,000 4,000,000 6,000,000 8,000,000 10,000,000 12,000,000 14,000,000 16,000,000

01/07/2017 04/07/2017 07/07/2017 10/07/2017 13/07/2017 16/07/2017 19/07/2017 22/07/2017 25/07/2017 28/07/2017 31/07/2017 03/08/2017 06/08/2017 09/08/2017 12/08/2017 15/08/2017 18/08/2017 21/08/2017 24/08/2017 27/08/2017 30/08/2017 02/09/2017 05/09/2017 08/09/2017 11/09/2017 14/09/2017 17/09/2017 20/09/2017 23/09/2017 26/09/2017 29/09/2017 02/10/2017 05/10/2017

kWh

Balancing Buy and Sell Actions (1st Jul ‘17 - 6th Oct ‘17)

Balancing Buy Actions Balancing Sell Actions

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Code Modification Forum

• 11. Balancing

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Balancing: Financial Security (FS) and GNI Activity on TP: Industry

• Action Item C546: At the August CMF Meeting, the Transporter stated that it welcomed views from industry as to

whether it is considered necessary to extend the current Financial Security Policy to TP trades involving the TSO and counterparties.

• Two responses received from Industry.

Response from IOOA

• IOOA’s members suggest that no additional FS should be required between GNI and shippers for Trading Platform

transactions.

‒ IOOA believe that this would encourage a quick and simple approach to GNI becoming an active shipper on a Trading Platform.

Response from Vermilion

• Vermilion suggest that when GNI becomes active on the IBP Trading Platform, no additional FS will be put in place for

the bilateral relationships between GNI and the respective shipper.

‒ So effectively, if something would go wrong financially, this would become part of the disbursement accounts. ‒ We think the probability of such an event would be very low and so the attached risk. No additional Financial Securities will enable a much quicker and simpler implementation of GNI becoming active on the Balancing Platform.

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Balancing: Industry views on potentially amending the 2nd Tier imbalance multipliers (introduced via A074)

• Action Item C548: Industry to provide its views on potentially amending the 2nd Tier imbalance multipliers (75% and

125%), previously introduced via Code Mod A074.

• Two responses received from Industry.

Response from IOOA

• IOOA’s members support the changing of the 2nd Tier imbalance multipliers back to their original level (95% / 105%)

which were changed due to a commissioning event that has not occurred since Corrib went commercial.

• IOOA would encourage the CRU to implement such a change ASAP.

Response from Vermilion

• Vermilion urge GNI/CRU to have the 2nd Tier imbalance multipliers back to the original levels as before the Code Mod

A074 was introduced (i.e. 95% and 105% respectively), as soon as possible, preferably as per 1st October 2017.

‒ Vermilion state that the A074 was introduced as response to the one-off event on 9/10th of July 2016 when Corrib was still in commissioning phase. ‒ After Corrib becoming commercial (26 July 2016), such an event has not been seen again. ‒ Vermilion notes that with 2nd Tier imbalance multipliers back to the original levels, they furthermore expect that shippers will nominate proper values earlier in the day, than with current penal imbalance multipliers.

Provisional Expected Timeline for Outstanding Steps to be completed, prior to TSO participating on TP

2017 2018 Q2 Q3 Q4 Q1 Q2 Q3 Apr May June July Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul GNI CGI EBI

Go Live

FS Business Readiness - contingent on timelines above Trading Platform Tender Trading Platform TP Contract Training GTMS FDS Build & Test Close

Hypercare

Bi Lateral Contract

Requirem ents

• Action Item C547: Transporter to issue a Gantt chart of provisional expected timelines in terms of the
• utstanding steps to be completed, prior to the TSO participating on an IBP Trading Platform.

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Code Modification Forum

• 12. VRF Tariffing Structure

VRF Tariffing Structure

• Re Action Item C549: Regulator to review potential amendments to the current VRF registration fee, as an interim VRF

pricing solution.

• As per the email circulated on 19th September, the Regulator has decided that, as detailed on page 10 (Table 3.3) of the

Gas Networks Ireland Allowed Revenue and Transmission Tariffs 2017/18 publication (CER/17/275) included below, the Registration Fee for the VRF product will continue to prevail for the forthcoming Gas Year.

• However, the Regulator has decided to accelerate the depreciation profile in order to recover the remaining costs of the

initial implementation and any enhanced product costs over the next two years, in anticipation of the TAR Network Code. Therefore the Registration Fee for VRF for the 2017/18 Gas Year will be €26,253 (as detailed below). Table 3.3: VRF tariff calculation – Moffat

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Moffat € Total Implementation Cost (11/12) 177,000 Enhanced Implementation Cost (15/16) 108,000 Additional Enhanced Implementation Cost (16/17) 23,212 Total Cost including inflation (17/18) 312,889 Registration fees (15/16) 13,779 Registration fees (16/17) 36,580 Remaining VRF cost (17/18) 262,350 Total number of shippers forecast in 2017/18 5 Depreciation period 2 years Registration Fee for VRF in 2017/18 26,253

Proposed Amended VRF Business Rules

• Following Action Item C550, the Transporter has circulated a Model to illustrate Proposed Amended VRF

Business Rules for industry review and input.

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VRF – Main Features

• Interruptible VRF Capacity will only be offered as a daily product at the Moffat IP.
• Available via Day Ahead Daily Interruptible VRF Capacity Auction. The VRF auction will be of 30 minutes duration,

and will commence at 15:30 D-1.

• Renomination window will run from 16:00 D-1 to 02:00 D.
• The Bookable VRF Capacity to be made available at the Daily Interruptible VRF Capacity Auction will be equal to

the ROI Forward Flow Nominations excluding the TSO’s balancing buys, shrinkage and stock gas requirements.

• Timestamping – in an interruption Shippers’ VRF CQs will be scaled back, based on capacity booking timestamp as

applied in reverse order, i.e. last in first out. In an interruption, Shippers with the same timestamp will be reduced pro-rata to their booked capacity.

• A Shipper requesting additional capacity when there is none available will no longer cause an interruption and

will be given a Partial Interruptible Capacity Allocation (PICA) if the request is partially met.

• A shipper should be billed for the total of their Active Capacity i.e. their Booked VRF Capacity, whether that

Capacity is booked via the Daily Interruptible Capacity Auction or via an Overnomination and whether it is utilized

• r unutilized on a Day.

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VRF Example - Part 1 PICA

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Aggregate Forward Flow (FF) CQs = 48 units Aggregate VRF CQ at 05:00 = 24 units (Flow of 1 unit per hour) At 14.50 VRF Shipper C re-nominates to 36 units Interruption Check is as follows:

• Agg. FF CQs – FF Deemed Flow < Agg. VRF provisional CQs

In the case of this Example at 17:00: 48 – 12 < 60 which is TRUE and implies interruption/PICA of VRF Provisional CQs is necessary.

VRF Example - Part 1 PICA

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Interruption Check (after Shipper C has been scaled back by 24 units)

• Agg. FF CQs – FF Deemed Flow < Agg. VRF provisional CQs

48 – 12 < 36 which is FALSE and implies further interruption/PICA of VRF Provisional CQs is no longer necessary After Shipper C has been scaled back from 36 units to 12, he is assigned a CQ of 12 units. As Shipper C was never given a capacity contract above 12 units, this is a Partial Interruptible Capacity Allocation (PICA); it is not an Interruption.

VRF Example - Part 2 Interruption

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At 20.50, VRF Shipper A renominates to 20 units Interruption Check is as follows:

• Agg. FF CQs – FF Deemed Flow < Agg. VRF provisional CQs

= 48 – 12 < 44 which is TRUE and implies interruption/PICA of VRF Provisional CQs is necessary Nomination Overflow Quantity = Agg. FF CQs – Agg. VRF provisional CQs – FF Deemed Flow = 48 – 44 – 12 = –8 units

VRF Example - Part 2 Interruption (Slide 1 of 2)

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In the Interruption calculation, scaling back Provisional VRF CQs in reverse order i.e. last in, first out:

• In Column 1, Shipper A is first reduced by 2 units. Nom Overflow Quantity is now 6.
• In Column 2, Shipper B is the next affected. As his deemed flow to 23:00 is 9 units he can only be reduced from 12 units to 9. Nom

Overflow Quantity is now 3.

• The next capacity contracts affected are those of Shipper A (18 units) and Shipper C (12 units) that were booked via the Auction

and have the same timestamp. Therefore, a pro rata reduction takes place in Column 4.

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Pro-rata calculation: Interruption Check (after pro-rata reduction)

• Agg. FF CQs – FF Deemed Flow < Agg. VRF provisional CQs

= 48 – 12 < 16.8 + 9 + 10.2 = 36 < 36 which is FALSE and implies further interruption/PICA of VRF Provisional CQs is no longer necessary At 23:00 in this scenario, all three Shippers are interrupted. Shipper A gets a VRF CQ of 16.8 units, Shipper B gets 9 units and Shipper C gets 10.2 units.

VRF Example - Part 2 Interruption (Slide 2 of 2)

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Code Modification Forum

• 13. Gas and Electricity Interaction

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Code Modification Forum

• 14. BrExit and ROI Gas Market

• 15. Transparency Data

Code Modification Forum

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Data Transparency Portal: Example of Propose Chart Display Options - Hourly data for Physical Flows (Slide 1 of 2)

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Data Transparency Portal: Example of Propose Chart Display - Hourly data for Physical Flows (Slide 2 of 2)

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• 16. Any Other Business

Code Modification Forum

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18. Upcoming Code Modification Forum Meetings

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CMF Dates 2017 Location 18th January 2017 (Wednesday) Dublin 22nd February 2017 (Wednesday) Cork 3rd May 2017 (Wednesday) Cork 5th July 2017 (Wednesday) Dublin 23rd August 2017 (Wednesday) Cork 11th October 2017 (Wednesday) Dublin 6th December 2017 (Wednesday) Cork

Next CMF Meeting:

Thank you for your participation