Code Modification Forum Clayton Hotel, Cork Wednesday, 13 June - - PowerPoint PPT Presentation

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Code Modification Forum Clayton Hotel, Cork Wednesday, 13 June - - PowerPoint PPT Presentation

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Code Modification Forum Clayton Hotel, Cork Wednesday, 13 June 2018 Agenda (1 of 2) 1. Review of minutes from last meeting 2. Review of Action Items from last meeting 3. GNI Scheduled Maintenance Update 4. Biogas/CNG Update 5.

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SLIDE 1

Code Modification Forum

Clayton Hotel, Cork Wednesday, 13 June 2018

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SLIDE 2

Agenda (1 of 2)

1. Review of minutes from last meeting 2. Review of Action Items from last meeting 3. GNI Scheduled Maintenance Update 4. Biogas/CNG Update 5. Intra-day Nomination Patterns and Profiles / Cod Mod Proposal A086-Incentives for Intra-day Balancing 6. Code Modification Proposal A087- Implementing a new framework for Suppliers to contract their payment channels for PPM customers 7. Code Modification Proposal A090- Proposed new Invoice Dispute Procedure

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Agenda (2 of 3)

  • 8. Code Modification Proposal A092- Adjustment of Daily Shipper Imbalance Charges
  • 9. Code Modification Proposal A094 – Changes to Shipper Portfolio Tolerances
  • 10. Update on GNI participation on EBI Trading Platform
  • 11. Modification Rules for IBP 15 Terms
  • 12. Gas /Electricity Interaction interaction
  • 13. Brexit and ROI Gas Market
  • 14. Transparency Data Update
  • 15. 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 C538 Transporter to continue consultation process surrounding intra-day nomination patterns and profiles Transporter Open High C559 Transporter to circulate to the CMF Mailing List a work document in relation to Website Transporter Open High C560 Transporter to draft and circulate and circulate to Industry worked examples on capacity charging Transporter Propose to close High C561 Transporter to issue a Code Modification Proposal to obtain approval of amendments to Cade of Operations enabling GNI trade on a Gas Trading Platform. Subsequently, the Transporter will arrange a telco with Industry and CRU, 7 days after issuing Code Modification Proposal Transporter Propose to close High

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

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3. 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

NOTHING TO REPORT

  • 1. Upstream Operator Maintenance

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

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SLIDE 9

2017/ 2018 GNI Proposed Maintenance Days

Maintenance Programme Gas Year 2017/2018 Date Duration Entry Points Commentary 7th Feb 2018 1 day Corrib Not required 1 day Inch Not required 31 May-1June 9 May 1 day Corrib SCADA signal validation testing . Now postponed due to deferment of SEPIL transition date 1 day Inch Odorant tank refill at Inch. 4th Jul 2018 1 day Corrib Fuel gas skid connection at Cappagh South. May not affect flow. Now postponed, was scheduled to tie-in with maintenance which is now deferred 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

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SLIDE 10

2018/ 2019 Maintenance Days

Maintenance Programme Gas Year 2018/2019

Date Duration Entry Points Commentary 8th November 2018 1 Inch Deferred in line inspection. Risk to flow during intelligent pigging run 7th March 2019 1 Bellanaboy Station testing, valve check and validations at Cappagh South. 9th May 2019 1 Inch Odourant injection system planned maintenance 4th Jul 2019 1 Moffat Station testing, valve checks and validations at Beattock and Brighouse Bay compressor station 12th Sep 2019 1 Bellanaboy ESD testing at the Corrib Terminal

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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

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SLIDE 12
  • 4. Biogas/CNG Update

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Code Modification Forum

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SLIDE 13

The Causeway Project

Reducing emissions and increasing renewables.

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SLIDE 14

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SLIDE 15

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Learn more at www.causewaystudy.eu

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Cush RNG Injection Project

Code Modification Forum Update 13 June 2018

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Agenda

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  • Biomethane Potential in Ireland
  • The Cush RNG Injection Project
  • Production site
  • Injection site
  • Legal, Safety, Regulatory & Market Development
  • Next Steps
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Biomethane Potential in Ireland

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Policy Background

  • Ireland’s renewable energy sources (RES) target is

16% RES by 2020.

  • Ireland’s Greenhouse Gas (GHG) emissions target is

20% less CO2 by 2020 relative to 2005.

  • Road and rail transport contributes ~ 29% of non-ETS

GHG emissions.

  • Agriculture contributes ~ 46% non-ETS GHG

emissions.

  • Ireland is set to miss both RES and GHG 2020 targets.

Fig.1 EPA non-ETS GHG emissions forecast for 2020

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Renewable Gas Potential in Ireland

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  • “The Member States with the largest

potential growth of biogas production between 2014 and 2030 are Ireland and Romania”,

(European Commission Report1).

1Kampman et al. 2016. “Optimal use of biogas from waste streams; An assessment of the potential of biogas from digestion in the EU beyond

2020”. Available at: https://ec.europa.eu/energy/sites/ener/files/documents/ce_delft_3g84_biogas_beyond_2020_final_report.pdf

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Biogas Potential in Ireland

  • Assessment of Costs and Benefits of Biogas and

Biomethane;

  • 28% of 2015 natural gas demand can be supplied from

biogas.

  • Additional grass is the largest bio-resource in Ireland

(35 PJ).

  • Levelised Cost Of Energy (LCOE) biomethane range

(€24 - €124/MWh) depending on feedstock, scale and discount rate.

SEAI, 2017. “Assessment of Costs and Benefits of Biogas and Biomethane”. Available at: https://www.seai.ie/resources/publications/Assessment-of-Cost-and-Benefits-of-Biogas-and-Biomethane-in-Ireland.pdf

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 Reduce carbon footprint of network through development of Renewable Gas.  20% renewable gas on network by 2030.  20% renewable gas will deliver;

  • 2 million tonnes less CO2 p.a.
  • 7.4% of Ireland’s Final Energy

Consumption.

  • €200 million euro p.a. avoided energy

imports.

Gas Networks Ireland’s Vision for Renewable Gas

GNI, 2017. Network Development Plan 2017. Available at https://www.gasnetworks.ie/corporate/gas-regulation/system-operator/publications/GNI-Network- Development-Plan-2017.pdf

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Cush RNG Injection Project

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Gas to Grid Project Process Overview

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Biogas Production Biogas Pre- treatment

Meets Biogas Quality Requirements?

Biogas Upgrading Process Biomethane Network Entry Facility

Meets Natural Gas Quality Specification?

Natural Gas Distribution Network Biomethane Flare

Yes No Yes No

Biogas Quality Monitoring Biomethane Compressor & Dispenser Location: Existing AD facility at Gorteen Lower, Nurney, Co. Kildare

Location: Cush Biomethane Network Entry Facility

Pressure Reduction Station

Meets Biogas Quality Requirements?

Yes No

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Production Site

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Biomethane Production

  • AD Site; Green Generation, Nurney, Co. Kildare

‒ EPA licence to take in 25,000 t/annum of biodegradable waste plus 25,000 t/annum of pig slurry from farm

  • Biogas Pre-treatment Process

‒ O2 dosing control system ‒ Additional activated carbon to control VOCs

  • Biogas Upgrading Process

‒ Oxygen < 1% ‒ Moisture – 60 0 C at 4 bar ‒ Methane concentration > 98%

  • Compressor Station & Disperser
  • Transportation Trailers - ADR compliant

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Injection Site

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Cush Injection Site

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  • The Network Entry Facility will contain;
  • Propane Injection System
  • Non-Fiscal & Fiscal Flow Meters
  • Pressure & Temperature Sensors
  • Gas Analysers (C6 GC + sensors)
  • Diverter Valves
  • Pressure Regulators
  • Odorant Injection System
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Biomethane Network Entry Facility

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GNI will own the following assets;  Remote Operated Valve.  Remote Telemetry Unit.  Connecting pipe to the network Delivery Facility Operator will own and

  • perate other assets within the Biomethane

Network Entry Facility

Image curtesy of Thyson Technology UK

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Legal, Safety, Regulatory and Market Development

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Key GNI Deliverables

  • Contracts
  • Connected Systems Agreement
  • Connection Agreement
  • Property Arrangements
  • Code of Operations Modifications
  • General
  • Oxygen Content
  • Tariffs
  • Interim
  • Enduring
  • Staff Training

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  • Safety
  • Measurement Risk Assessment
  • Safety Integrity Level Assessment
  • Layer of Protection Analysis
  • Impact Evaluation & Risk Assessment
  • Material Change Notice
  • Technical Specification Document
  • Local Operating Procedures
  • Communications Plan
  • Deployment & Commissioning Plan
  • Systemisation
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Key GNI Deliverables cont’d

  • Code Modification Proposal A091: Modification of oxygen content limit for biomethane
  • Proposal:
  • Increase the current oxygen limit of ≤ 0.2mol% to ≤ 1mol%
  • Applicable to biomethane entry points and to exit points only
  • All other gas specification parameters will apply at these points
  • Relevant entry points will be subject to continuous monitoring of both dew point and oxygen content
  • Rationale:
  • Some biomethane sources will not be able to meet the current oxygen limit
  • Benefits
  • Modification will enable biomethane producers to meet GNI’s quality specifications
  • Biomethane production is to be encouraged as it supports, inter alia, the reduction of carbon footprint of

the gas network and the reduction of carbon emissions, thereby helping to future proof the gas network in Ireland

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Key GNI Deliverables cont’d

  • Code Modification Proposal A093: RNG Outline Code Modification
  • Proposal:
  • To amend the Code of Operations to provide for biomethane entry points on GNI’s network
  • Examples:
  • Part A Definitions: e.g. “Delivery Facility Operator”, “Renewable Gas”
  • Part E Balancing & Shrinkage: e.g. update formula to include biomethane
  • Part H Operations: e.g. introduction of RG Entry Points, allowing for their connection to Transmission and

Distribution Systems

  • Benefits
  • Enable compliant introduction of biomethane into GNI’s system
  • Support the promotion of renewable gas industry in ROI

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Gas Networks Ireland’s Safety Approach

  • Design review of Biomethane Network Entry.
  • GNI Impact Evaluation and Risk Assessment review.
  • Measurement Risk Assessment examined gas quality risks following UK GQ8 methodology.
  • Safety Integrity Level (SIL) assessment carried out on 5 key instrumentation loops.
  • Layer of Protection Analysis (LOPA) on odourisation equipment.
  • Hazop study conducted by DFO examined all process risks both upstream and within the injection

point.

  • Material Change Notice to be issued to Regulator.

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Next Steps

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Shipper Activities

  • Biomethane Producer / Shipper Agreement
  • Shipper Safety Case

‒ Shippers must be licenced to ship RNG ‒ CRU currently reviewing Safety Case guidelines

  • Will be circulated for consultation
  • Shipper Registration at Entry Point
  • Shipper Engagement with Green Gas Certification Scheme
  • Other Shipper relevant support schemes / initiatives TBD

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Green Gas Certification Scheme for Ireland

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Centralised Grid Injection – Supporting Agricultural AD

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Sustainable Agricultural Resources

1

On-farm and off-farm Anaerobic Digestion (AD)

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Gas Entry Hub Renewable Gas Injection

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Renewable Gas available for Industry, Residential, and Transport Markets

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Renewable Gas

Gas processing and transport

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Biogas Produced

  • Centralised Grid Injection

 Increase access to the gas network  Farmer & community owned ADs  High capacity Gas Entry Hub

 Large catchment area

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Summary

Ireland has:  Abundant resources for biomethane production.  Large demand from industry.  Proactive gas network operator.

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Ireland needs: Government policy support for biomethane. Appropriate regulatory processes. Affordable interest rates for developers.

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  • 5. Intra-day Nomination Patterns and Profiles /Code

Mod Proposal A086 –Incentives for intra-day Balancing

Code Modification Forum

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Outline of proposed GNI Modification A086

  • Modification Raised by GNI to address concerns that the aggregate system imbalance intra-day is creating
  • perational difficulties.
  • At times, there are large deviations between the prevailing exit nominations on the system and the prevailing

entry nominations. GNI wish to introduce an incentive to encourage more alignment of entry and exit

  • PROPOSAL: At check points during the gas day (11:00, 17:00, 23:00) a shippers portfolio Nomination Imbalance

position will be recorded.

  • A tolerance will be applied at each point
  • Worked Example:

A shipper has 24 units of Aggregate Exit Nomination at 11:00. ‒ Deemed flow at Exit = (24 units * 6hrs/24hrs) = 6 units ‒ Total Entry Nomination = 4 units ‒ Apply a [5%] tolerance: Adjusted Nomination Imbalance Position

  • Nomination Imbalance Position = (6 * 90 %) – 4 = 1.4 units

‒ The Adjusted Nomination Imbalance Position at the 3 time checks will be added ‒ The total for the day will be multiplied by [SAP] * [x%] ‒ The amounts for each day in a month will be invoiced at month end.

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Impact if Code Mod was applied in November 2017 –April 2018

  • There was a marked improvement in Shipper Nominations following discussions of the proposed modification at

recent code mod forums. The estimated monthly financial impact dropped from €334k (November) to €67k (January).

  • However, during February, March and April late day nominations have resulted in almost hourly batches late in the

gas day, causing operational difficulties once again for both GNI and National Grid.

  • Grid control, have recently, had to undertake aggressive selling actions to compensate for imbalances on the

system.

  • The financial Impact to Shippers in April, if the Code Mod was applied, has increased by 293% compared with

January 2018.

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Impact if Code Mod was applied in November 2017 –April 2018

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Impact if Code Mod was applied in November 2017 –April 2018

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NOVEMBER, €334,187.70 DECEMBER, €161,895.41 JANUARY, €67,255.77 FEBRUARY, €115,850.34 MARCH, €252,503.70 APRIL, €264,125.36 50000 100000 150000 200000 250000 300000 350000 400000 NOVEMBER DECEMBER JANUARY FEBRUARY MARCH APRIL

Intraday Imbalance Nov 2017 - April 2018

Total

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Impact if Code Mod was applied in November 2017 –March 2018

  • Assume 5% Exit Tolerance and charging of 5% of SAP
  • November 2017

‒ 8 shippers would have received charges ranging from €365 to €148k ‒ Total charges: €334k ‒ 92% of charges attributable to 3 shippers

  • December 2017

‒ 5 shippers would have received charges ranging from €17 to €124k ‒ Total charges: €162k ‒ 96% of charges attributable to the same 3 shippers

  • January 2018

‒ 5 shippers would have received charges ranging from €18 to €30k ‒ Total charges: €67k ‒ 96% of charges attributable to 3 shippers

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Impact if Code Mod was applied in November 2017 –March 2018

  • February 2018

‒ 7 shippers would have received charges ranging from €15.20 to €72k ‒ Total charges: €116k ‒ 93% of charges attributable to 3 shippers

  • March 2018

‒ 6 Shippers would have received charges ranging from €86 to €149k ‒ Total charges: €252k ‒ 96% of charges attributable to 3 shippers

  • April 2018

‒ 5 Shippers would have received charges ranging from €23k to €114k ‒ Total charges: €264k ‒ 91% of charges attributable to 4 shippers

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  • 6. Code Modification Proposal A087-Implementing a

new framework for Suppliers to contract their own payment channels for PPM customers

Code Modification Forum

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Code Mod 87 – Front Office PAYG Contracts

  • Recap of Code Modification:

‒ Raised by GNI, this modification seeks to revise the provisions in the Code of Operations related to Prepayment Metering so that Suppliers contract their own payment channels for gas prepayment meter customers rather than be required to be a party to a Front Office Services agreement agreed by the Transporter with third party service providers.

  • Status of Code Modification:

‒ This code modification is fundamentally a retail issue and it has been agreed that it should be further discussed at the retail (GMARG) forum

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  • 7. Code Modification Proposal A090 Proposal

from BGE for New Invoice Dispute Resolution Procedure

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Code Modification Forum

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8.Code Modification Proposal A092- Adjustment of Daily Imbalance Charges

Code Modification Forum

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  • 8. Code Modification Proposal A092- Adjustment of Daily Imbalance

Charges

  • 1st June marked the commencement of GNI’s participation in the Irish balancing point (IBP) trading platform
  • perated by EBI. As trading at the Irish Balancing Point (“IBP”) develops GNI intends to begin using the IBP traded

prices as the basis for cashing out Shipper imbalances under the Code of Operations. The relevant Articles of the BAL NC are Art. 22 and Art. 23.

  • GNI will publish First Tier and Second Tier Cash-out Prices on 21st of each month until October 1st.
  • From October 1st , First Tier and Second Tier Cash-out Prices will be published Daily.
  • Following the most recent Code Mod Forum (2nd May) GNI circulated:

‒ Worked examples of Daily Imbalance charges, for Shipper review

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Proposed First Tier Imbalance Cash-out Prices to apply in different scenarios

Scenario

First Tier Imbalance Cash-out Buy Price to Apply to Shippers’ Short Positions First Tier Imbalance Cash-out Sell Price to apply to Shippers’ Long Positions

  • A. GNI has no balancing (buy or sell) requirements, but there are trades
  • n an IBP Trading Platform

SAP (IBP) plus 2% differential SAP (IBP) minus 2%

  • B. GNI has no balancing requirements, and there are no trades on an IBP

Trading Platform SAP (NBP) plus] 2% differential (Default Rule) SAP (NBP) minus 2% differential (Default Rule)

  • C1. GNI has balancing buy requirements, and it has to utilise the

balancing services contract, and other parties trades with each other on an IBP Trading Platform SAP (IBP) plus 2% differential SAP (IBP) minus 2% differential

  • C2. GNI has balancing buy requirements, and has to utilise the balancing

services contract, and there are no trades on an IBP Trading Platform SAP (NBP) plus 2% differential (Default Rule) SAP (NBP) minus 2% differential (as per Default Rule - see Section 3.2.8)

  • D1. GNI has balancing sell requirements, and it has to utilise the

balancing services contract, and other parties trades with each other on an IBP Trading Platform SAP (IBP) plus 2%differential SAP (IBP) minus 2%differential

  • D2. GNI has balancing sell requirements, and has to utilise the balancing

services contract, and there are no trades on an IBP Trading Platform SAP (NBP) plus 2%differential (Default Rule) SAP (NBP) minus 2% differential (Default Rule)

  • E. GNI has balancing buy requirements, and trades these out on an IBP

Trading Platform SAP (IBP) plus 2% differential SAP (IBP) minus 2% differential

  • F. GNI has balancing sell requirements, and trades these out on an IBP

Trading Platform SAP (IBP) plus 2% differential SAP (IBP) minus 2% differential

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Proposed Second Tier Imbalance Cash-out Prices to apply in different scenarios

Scenario

Second Tier Imbalance Cash-out Buy Price to Apply to Shippers’ Short Positions Second Tier Imbalance Cash-out Sell Price to apply to Shippers’ Long Positions

  • A. GNI has no balancing (buy or sell) requirements, but there are trades
  • n an IBP Trading Platform

SMPbuy (IBP), which is the equivalent of SAP (IBP) + 5% Differential SMPsell (IBP) which is the equivalent of SAP (IBP) - 5% Differential

  • B. GNI has no balancing requirements, and there are no trades on an IBP

Trading Platform SMP (NBP) plus 5% differential plus Transportation Costs (Default Rule) SMP (NBP) minus 5% differential minus Transportation Costs (Default Rule)

  • C1. GNI has balancing buy requirements, and it has to utilise the

balancing services contract, and other parties trades with each other on an IBP Trading Platform SMPbuy (IBP) which is the equivalent of SAP (IBP) + 5% Differential SMPsell (IBP) which is the equivalent of SAP (IBP) - 5% Differential

  • C2. GNI has balancing buy requirements, and has to utilise the balancing

services contract, and there are no trades on an IBP Trading Platform SMP (NBP) plus 5% differential plus Transportation Costs (Default Rule) SMP (NBP) minus 5% differential minus Transportation Costs (Default Rule)

  • D1. GNI has balancing sell requirements, and it has to utilise the

balancing services contract, and other parties trades with each other on an IBP Trading Platform SMP (IBP) which is the equivalent of SAP (IBP) + 5% Differential SMP (IBP) which is the equivalent of SAP (IBP)

  • 5% Differential
  • D2. GNI has balancing sell requirements, and has to utilise the balancing

services contract, and there are no trades on an IBP Trading Platform SMP (NBP) plus 5% differential plus Transportation Costs (Default Rule) SMP (NBP) minus 5% differential minus Transportation Costs (Default Rule)

  • E. GNI has balancing buy requirements, and trades these out on an IBP

Trading Platform IBP Marginal Buy Price Greater of SMPbuy (IBP) and SAP (IBP) plus 5% differential IBP Marginal Sell Price Lesser of SMPsell (IBP) and SAP (IBP) minus 5% differential

  • F. GNI has balancing sell requirements, and trades these out on an IBP

Trading Platform IBP Marginal Buy Price Greater of SMPbuy (IBP) and SAP (IBP) plus 5% differential IBP Marginal Sell Price Lesser of SMPsell (IBP) and SAP (IBP) minus 5% differential

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Worked Examples of Daily Imbalance Charges : Cash-out Buy Price

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Scenario 1:

  • For a day there have been a number of trades on the platform.
  • SAP (IBP) has been published as 50 pence/therm
  • GNI has not undertaken any balancing actions on this day
  • Price used on day = SMPbuy (IBP) means SAP(IBP) + 5%: 52.5 pence/therm (converted accordingly into euro for settlement purposes)

Max GNI Purchase (pence/therm) SMPbuy (IBP) means SAP (IBP) +5% (pence/therm) SMPbuy NBP (pence/therm) SMPbuy (NBP) +5% (pence/therm) Price used on day (pence/therm) 52.5 54 56.7 52.5

Scenario 2:

  • For a day there have been no trades on the IBP platform.
  • SAP (IBP) has therefore not been published.
  • GNI has not undertaken any balancing actions on this day.
  • Price used on day = SMPbuy (NBP) + 5%: 56.7 + Transportation costs. (converted accordingly into euro for settlement purposes)

Max GNI Purchase (pence/therm) SMPbuy (IBP) means SAP (IBP) +5% (pence/therm) SMPbuy NBP (pence/therm) SMPbuy (NBP) +5% (pence/therm) Price used on day (pence/therm) 54 56.7 56.7 + Transportation Costs

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SLIDE 55

Worked Examples of Daily Imbalance Charges: Cash-out Buy Price

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Scenario 3:

  • For a day, GNI has utilised the Trading Platform to undertake Balancing Buys
  • SAP (IBP) has been published as 50 pence/therm
  • Price used on day = IBP Marginal Buy Price: 53 pence/therm (converted accordingly into euro for settlement purposes)

Max GNI Purchase (pence/therm) SMPbuy (IBP) means SAP (IBP) +5% (pence/therm) SMPbuy NBP (pence/therm) SMPbuy (NBP) +5% (pence/therm) Price used on day (pence/therm) 53 52.5 54 56.7 53

Scenario 4:

  • For a day, GNI has utilised the Trading Platform to undertake Balancing Buys
  • SAP (IBP) has been published as 50 pence/therm
  • Price used on day = IBP Marginal Buy Price: 52.5 pence/therm (converted accordingly into euro for settlement purposes)

Max GNI Purchase (pence/therm) SMPbuy (IBP) means SAP (IBP) +5% (pence/therm) SMPbuy NBP (pence/therm) SMPbuy (NBP) +5% (pence/therm) Price used on day (pence/therm) 52 52.5 54 56.7 52.5

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SLIDE 56

Worked Examples of Daily Imbalance Charges: Cash-out Sell Price

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Scenario 1:

  • For a day there have been 5 trades on the platform.
  • SAP (IBP) has been published as 50 pence/therm
  • GNI has not undertaken any balancing actions on this day
  • Price used on day = SMPsell (IBP) means SAP(IBP) - 5%: 47.5 pence/therm (converted accordingly into euro for settlement purposes)

Min GNI Sale (pence/therm) SMPsell (IBP) means SAP (IBP) - 5% (pence/therm) SMPsell (NBP) (pence/therm) SMPsell (NBP) - 5% (pence/therm) Price used on day (pence/therm) 47.5 51.3 48.7 47.5

Scenario 2:

  • For a day there have been no trades on the platform.
  • SAP (IBP) has not been published.
  • GNI has not undertaken any balancing actions on this day.
  • Price used on day = SMP Sell (NBP) - 5%: 51.3 pence/term (converted accordingly into euro for settlement purposes)

Min GNI Sale (pence/therm) SMPsell (IBP) means SAP (IBP) - 5% (pence/therm) SMPsell (NBP) (pence/therm) SMPsell (NBP) - 5% (pence/therm) Price used on day (pence/therm) 51.3 48.7 48.7

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SLIDE 57

Worked Examples of Daily Imbalance Charges: Cash-out Sell Price

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Scenario 3:

  • For a day, GNI has utilised the Trading Platform to undertake Balancing Sells
  • SAP (IBP) has been published as 50 (pence/therm)
  • Price used on day = IBP Marginal Sell Price: 47.5 (pence/therm) (converted accordingly into euro for settlement purposes)

Min GNI Sale (pence/therm) SMPsell (IBP) means SAP (IBP) - 5% (pence/therm) SMPsell (NBP) (pence/therm) SMPsell (NBP) - 5% (pence/therm) Price used on day (pence/therm) 48 47.5 51.3 48.7 47.5

Scenario 4:

  • For a day, GNI has utilised the Trading Platform to undertake Balancing Sells
  • SAP (IBP) has been published as 50 (pence/therm)
  • Price used on day = Lowest GNI Sell Price: 46 (pence/therm) (converted accordingly into euro for settlement purposes)

Min GNI Sale (pence/therm) SMPsell (IBP) means SAP (IBP) - 5% (pence/therm) SMPsell (NBP) (pence/therm) SMPsell (NBP) - 5% (pence/therm) Price used on day (pence/therm) 46 47.5 51.3 48.7 46

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SLIDE 58

Responses from Industry

  • Concern at liquidity of EBI platform

‒ The fact that conditional terms for using the NBP have to be included as scenarios, suggests that there are doubts over the platform’s maturity and readiness for imbalance price setting. ‒ Consider using average of 7 previous days SAP if no trades occur as in GB (caveated by sufficient IBP liquidity)

  • Concern that “any trade” by the TSO, i.e. any one single trading action, could skew the imbalance

price.

‒ Inexperience of GNI in conducting balancing trades ‒ Evidence in general of

  • low volume of trades, some of which appear to be test trades
  • Trades at prices which could be seen as experimental
  • REMIT Article 2(2) concerns transactions which give false or misleading signals, or price at an

artificial level

  • No suggestion of wilful market manipulation – but in setting a reference price this should be considered

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Responses from Industry

  • Use of NBP SMP is incorrect

‒ Pancaking of the +/- 5% small adjustment onto the highest/lowest NGG balancing action price or NBP SAP +/- adjustment

  • Points out an error in examples 3 and 4 of the SMPsell(NBP) table

‒ Values are higher rather than lower than the SMPsell NBP (corrected in earlier slide)

  • Concerns over the speed of introduction, lack of consultation and transparency, and short

timeline to implementation. The five years of interim measures ends in April 2019, so there is more time that can be used to introduce change in a more measured way, including monitoring and review, affording counterparties time to set up contractual trading arrangements, and allowing GNI to gain learning from use of the trading platform.

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SLIDE 60
  • 9. Code Modification A094- Changes to Shipper Portfolio

Tolerances

  • Reasons for Code Modification ;
  • 1. Compliance with Art.50.1 of Commission Regulation(EU)No.312/2014 where

appliance of tolerances is prohibited where Shippers do not have access to ;

  • A short-term wholesale gas market that has sufficient liquidity
  • Gas required to meet short term fluctuations in gas supply
  • Sufficient information regarding their inputs and off-takes
  • 2. Removal of tolerances will incentivise Shippers to reduce portfolio

imbalances and will as a result increase trading platform liquidity

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Next Steps - Tolerances

Sector/Size(Annual Quantity)

Exit Tolerance % - CURRENT Proposed % – 01 August Proposed % – 01 October

LDM >1,500,000,000 kWh (LDM 1)

3.5 1.75

LDM > 260,000,000 to 1,500,000,000 kWh (LDM 2)

9 4.5

LDM >57,500,000 to 260,000,000 kWh (LDM 3)

19 9.5

DM

30 of DM Exit Allocations 15

NDM

2.5 of NDM Exit Allocations 2.5 2.5

Inch Storage Exit Point

1.5 1.5

IP CSEP Non OBA Day 1.5

1.5

IP CSEP OBA Day Sub-Sea I/C > 1,500,000,000 kWh

3.5 1.75

Sub-Sea I/C > 260,000,000 to 1,500,000,000 kWh

9 4.5

Sub-Sea I/C < 260,000,000 kWh

19 9.5

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  • The BAL NC envisages the removal of tolerance

‒ Interim measures allows the retention until 2019 ‒ GNI believes, following recent consultation, that it is now time to move towards removal ‒ The table below outlines a 2 step approach to removal of tolerances at LDM, DM. ‒ Corrib and Inch Entry point Tolerances proposed to move to 0.75% on the 1st of August 2018 and 0% on the 1st of October 2018

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Code Modifications - Live

Number A Title of Proposal Proposer Status A085 Profiling of Gas Flows at Entry Points IOOA Live A086 Intra-day Nomination Incentive Proposal GNI Not yet issued A087 New Framework for Suppliers in PPM Market GNI Live A090 Proposed new Invoice Dispute Resolution Procedure BGES Live A091 Modification of oxygen content limits for Renewable Natural Gas (RNG) injected from RNG Entry Points GNI Live A092 Trading Platform participation and adjustment of Daily Imbalance Charges GNI Live A093 RNG Outline Code Modification GNI Live A094 Changes to Shipper Portfolio Tolerances GNI Live

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Responses from Industry

  • The 3 conditions of Art. 50.1 have not been met

(a) Access to a market that has sufficient liquidity ‒ Spot IBP needs more time to develop ‒ Few trades, partly attributable to low number of commercial agreements in place between counterparties. (b) Access to gas when required to meet short-term fluctuations ‒ Problematic at the end of the Gas Day

  • NBP can be accessed until 00:30 and IBP until 02:00
  • Dead band from 02:00 to 05:00 when sourcing gas becomes an issue
  • Under I-SEM materiality could grow

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Responses from Industry

(c) Access to sufficient information regarding inputs and off-takes ‒ Power stations are not in control of their gas offtakes, as they are dispatched by Eirgrid in real time, given indicatives as to the gas take. ‒ NDM allocations are only finalised after the trading day ends. ‒ Impact of I-SEM and DS3 unknown and unquantifiable

  • Support greater co-operation between gas and electricity sectors
  • Very disappointed to hear views expressed at the code modification forum that the problem lay solely

in the power sector

‒ NDM and DM figures are published Trading D+1, final allocations at D+4

  • We do not think our concerns about balancing NDM positions were given due consideration at the

meeting or in the process

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Responses from Industry

‒ The removal of First Tier imbalance volumes is in fact a shift from two levels of imbalance charging to one level for all but NDM volumes. ‒ A transition is appropriate and also an assessment, with evidence, of what the correct level of “small adjustment” is to incentivise participants adequately. 3.5% as an initial level for the small adjustment (i.e. between 2% and 5%) would be appropriate to be tried and monitored. ‒ We are concerned that 2%, 5%, 10% and 25% have been in play for imbalance charging recently without evidence basis, and that consultation questions previously issued about the level of small adjustment were selective in their individual scope.

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SLIDE 66

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  • 10. Update on GNI participation on EBI Trading

Platform

Code Modification Forum

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SLIDE 67

11.Modification rules for IBP 15 Terms

Two subsequent versions since original 2015 version – April 2018 and May 2018. Modification Rules for future amendments Through the CMF process? Draft Rules?

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SLIDE 68

Code Modification Forum

  • 12. Gas / Electricity Interaction

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Code Modification Forum

  • 13. BrExit and ROI Gas Market
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SLIDE 70
  • 14. Transparency Data Update

Code Modification Forum

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SLIDE 71
  • 15. AOB

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SLIDE 72

1.

Upcoming Code Modification Forum Meetings

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CMF Dates 2018 Location

7th March 2018 (Wednesday) Cork 2nd May 2018 (Wednesday) Dublin 13th June 2018 (Wednesday) Cork 8th August 2018 (Wednesday) Dublin 26th September 2018 (Wednesday) Cork 28th November 2018 (Wednesday) Dublin Next Meeting

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SLIDE 73

Thank you for your participation