Code Modification Forum Clayton Hotel, Cork Wednesday, 6 th - - PowerPoint PPT Presentation

Code Modification Forum

Clayton Hotel, Cork Wednesday, 6th December 2017

Agenda (1 of 2)

1. Review of minutes from last meeting 2. Review of Action Items from last meeting 3. General Items Update 4. GNI Scheduled Maintenance Update 5. Code Modification Proposal

‒ A080 Option to Provide Monthly Settlement from Disbursements Accounts

• 6. Code Modification Proposal

‒ A083 Interruptible Capacity at Non IP Entry Points

• 7. Intra-day Nomination Patterns and Profiles

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Agenda (2 of 2)

• 8. Balancing
• 9. Proposed Amended VRF rules
• 10. Gas Electricity Interaction
• 11. BrExit and ROI Gas Market
• 12. Transparency Data
• 13. EBI Trading Platform Activity Presentation

14 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

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) Propose to close High C551 Transporter to revert back with a final decision re whether there is a requirement for Financial Security for Trading Platform transactions Transporter Propose to close High C552 Transporter to circulate a draft Bilateral Contract for industry consultation Transporter Open High C553 Industry to provide feedback on draft Bilateral Contract, once circulated Industry Open High C554 Industry to provide feedback on the Proposed Amended VRF Business Rules and associated illustrative Model circulated Industry Propose to Close High C555 Transporter to circulate an overview of Day-ahead Forward Flow Nominations at the Moffat IP in recent months Transporter Open Medium

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

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3. 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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4. 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:

2017/ 2018 GNI Proposed Maintenance Days

Maintenance Programme Gas Year 2017/2018

Date Duration Entry Points Commentary 8th November 1 day Inch Planned installation of new UPS at Midleton deferred until February due to delay in acquiring materials 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

5. 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 has been finalised.
• Transporter has established the Oracle and IT interface requirements to implement A080.
• A080 has been implemented since 1st October 2017.

Monthly Disbursement Account Regime

• Disbursement Account credit notes will be paid on a month in arrears basis where there is no

Shipper default on disbursement invoices on that month. All individual invoices to be paid within a

• month. Shippers should NOT offset credits against any invoices from within a month or from a

previous month. If there is a default(s) in a month credit notes will issue but will not be paid.

• Where any default continues for three months then, at that stage, within four months of the due

date, the deficit will be smeared across the other Shippers and any credit balance is paid to the non- defaulting Shippers on a pro-rata basis after any credit due to a defaulting Shipper has been set against its deficit

• At the end of the Gas Year the above process is carried out (even though it may be less than a three

month period).

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Monthly Disbursement Account Regime (cont.)

• At the end of the Gas Year any Balancing Action Refund due to a defaulting shipper will be

credited against its Disbursement Account Deficit

• Any late payment of a Disbursement Invoice by a Shipper (after the monthly Disbursement

Account Reconciliation) will be dealt with at the annual end-of-Gas Year Reconciliation)

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

Code Modification Forum

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• An agreement currently exists between the Operator of the Bellanaboy Entry Point and a number of Shippers who

have entitlement to be allocated gas at the Entry Point (“The Bellanaboy Administration Agreement”). ‒ Pursuant to this agreement the Operator acts as the Allocation Agent and advises the TSO of the amounts to be allocated to each Shipper

• Pursuant to Part H (Operations), Section 3.8 (Administrative Procedures at an Entry Point), the parties to the

Bellanaboy Administration Agreement propose as follows; 1. It has been agreed that the parties to the Bellanaboy Administration Agreement will write to GNI requesting that only the parties to that agreement shall be entitled to book Entry Capacity at the Point 2. GNI to ensure that this request is given effect to within GTMS by only assigning Bookable Contracts to the parties. 3 It will be the responsibility of parties to inform GNI of any changes to the Shippers entitled to book Entry Capacity at the point. 4 This new requirement shall come into effect on a date that GNI notifies to the parties following receipt of the instructing letter.

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A083: Update from Upstream Operator

Overview of Status of Active Code Modifications

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Code Mod No. Description of Code Modification Current Status A080 Option to Provide Monthly Settlement from Disbursements Account Legal Drafting is currently being finalised (But provisions of this code modification are already put into effect)

7. Intra-day Nomination Patterns and Profiles

Code Modification Forum

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GNI Proposed Code Modification

• Despite continued engagement with Shippers to encourage more timely with-in day nominations the pattern of

significant upward Entry Nominations at Moffat late in the gas day is persisting

• GNI will shortly raise a Code Modification Proposal to incentivise shippers to at least nominate their

Metered/Deemed Exit flows at particular points during a gas day.

• The reasons for raising this modification are:
• 1. Continued operational stress on the system, compressors
• Reduction in flows having significant impact on operation of compressor stations in Scotland.
• Compressor stations designed to accommodate steady flows and not a ramping up and down pattern of operation (such

as batching).

• High flow periods are during the night when stations are generally unmanned.
• Stop-start nature of operation leading to additional venting and increased emissions.
• 2. Concerns expressed by National Grid as to the erratic flows causing system issues and sub-optimal balancing actions
• n their system (see next slide)
• 3. Unnecessary transactional costs on the Disbursements account
• 4. Distortion of VRF product availability/offering

GNI Nominations Material from National Grid

Moffat Notifications Trend (01 Nov – 22 Nov)

2 4 6 8 10 12 14 16 18 20 EoD Notification, mcm/d Time of Day

Typical National Grid Trading hours 20:00 – 00:00

Moffat Notifications Trend (ctd)

 During typical periods of the day when National Grid may be considering balancing actions, Notification data is frequently imprecise:  6% chance of Notification over-estimating end of day take  94% chance of Notification under- estimating end of day take (of which 10% chance of it being under by more than 4.3mcm)  Lack of precise notifications can cause sub-optimal balancing decisions

Notification understating end of day take Notification overstating end of day take

Commercial Impacts of late Nomination changes

Potential late balancing actions by National Grid to resolve system imbalances Little time for shippers to react to signals, so could lead to sub-optimal balancing decisions Without taking balancing actions, imbalance likely to persist Potentially failing to meet regime / incentive objective of within day cost targeting

Outline of proposed GNI Modification

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

position (entry v exit) will be recorded.

• A tolerance will be applied to the imbalance position
• E.g.

A shipper has 24 units of Aggregate Exit Nomination at 11:00.

‒ Deemed/metered flow = 6 units (based on hourly meter flows plus deemed flow for non-LDM sites) ‒ Total Entry Nomination = 4 units ‒ Nomination Imbalance Position = 6 – 4 = 2 units ‒ Apply a [10%] tolerance: Adjusted Nomination Imbalance Position = 1.8 units ‒ The Adjusted Nomination Imbalance Position at the 3 time checks will be added ‒ The aggregate adjusted nomination imbalance position 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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Conclusions / Next Steps

• The current trend/patters cannot continue, it is creating operational difficulties for both GNI

and National Grid and will have financial implications for all shippers if left unchecked

• There is a need to apply an incentive for shippers to nominate at entry at least what they

have already flowed at exit (adjusted for some reasonable tolerance).

• GNI would welcome shippers’ views on aspects of the modification such as:

‒ Calculation of deemed flow ‒ Tolerance to apply ‒ SAP charge to apply ‒ Other proposals?

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Code Modification Forum

8. Balancing

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GNI as a participant on EBI platform – status update

Item Status Trading Platform Availability Contract (TPAC) Agreed with EBI – ready for execution TP Terms and Conditions Agreed with EBI – Short Form User Agreement and Standard Ts & Cs schedule – ready for execution Exit Plan Agreed – ready for execution Business Continuity Plan Agreed – ready for execution REMIT Reporting Agreement Agreed – ready for execution GNI/Shipper Bilateral Agreement See next slide(s) Code Modifications See next slide(s) GNI Business Readiness

• WebICE OCM Read-only access activated
• EBI Test accounts/companies activated for training
• Operational/Safety Risk Assessments underway
• GTMS – Initial Functional Design Spec (FDS)

drops reviewed/approved and sent for offshore development

• Final FDS drop this week

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GNI/Shipper Bilateral Agreements

Current Status

• Follow on from Standard Ts and Cs agreed with EBI
• Will issue for industry feedback shortly
• Will include some GNI specific Requirements to reflect its role as residual balancer on behalf of the whole shipping

community GNI Specific Requirements

• Requirement to submit nominations via GTMS within a specific timeframe

‒ 1 hour from GNI instruction via GTMS following conclusion of a trade on EBI Screen ‒ Needed to ensure that the linepack gets back to required levels.

• Specific Taxation clauses

‒ GNI’s requirements as a semi-state entity

• No FS requirements

‒ Propose to not include a requirement for FS upfront from shippers to trade with GNI

• Uniform contract which is non-negotiable (allowing for industry feedback to initial draft)

‒ Need to have consistent terms and conditions between GNI and any shippers wishing to trade with GNI ‒ This is a requirement under the EU balancing regulation in terms of provide equal and non-discriminatory access

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

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Code Modification Forum

• 9. Proposed Amended VRF Business Rules

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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IOOA Response

• Support rules that prevent gaming by shippers who could nominate very high to maximise

their share of available VRF due to ‘pro-rata’ sharing

• Note low day ahead Forward Flow nominations would mean low VRF availability in DA

auction

‒ Suggest making booked Moffat forward flow capacity available in the DA Auction ‒ Shippers understand that this would be interruptible

• Encourage GNI to propose an alternative to A085 to address timeliness of Moffat fwd flow

nominations

• Would like to see bookable VRF Capacity available in real-time on GTMS

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Code Modification Forum

• 10. Gas and Electricity Interaction

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Code Modification Forum

• 11. BrExit and ROI Gas Market

GNI - Key Brexit Related Activities – 2017 (Slide 1/3)

‘Day 1’ v ‘Day 2’ Impact on IPs Regulatory Obligations Risk Analysis Stakeholder Management SoS Cost of Gas Relationship with neighbouring TSOs Dispute Resolution Contractual Arrangements EU relationships Any others???

Brexit and ROI Gas Market – Amendment to the EU Gas Directive (Slide 2/3)

1. On 8th November, in order to ‘improve the functioning of the EU internal energy market and enhance solidarity between Member States’, the Commission proposed to amend the EU Gas Directive in order to clarify that the core principles of EU energy legislation (third-party access, tariff regulation, ownership unbundling and transparency) will apply to all gas pipelines to and from third countries up to the border of the EU's jurisdiction. 2. Existing gas pipelines impacted by this proposal enter the Union from Norway, Algeria, Libya, Tunisia, Morocco and Russia. The proposal may also have an impact – post-Brexit – on pipelines connecting the UK with EU Member States. 3. The proposed changes have yet to be agreed by the European Parliament and Council before they become law and it is currently unclear when this proposed amendment will come into effect. GNI will monitor this closely and consider the impact in a post-Brexit scenario. 4. Essentially this should provide some reassurance to Irish shippers that risk of UK divergence from the Gas Directive will be reduced

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Brexit and ROI Gas Market – PRISMA (Slide 3/3)

Summary of Recent Activity in PRISMA

• Changes to Articles of Association now agreed following extensive engagement with PRISMA and its shareholders
• Text seeks to secure the ability of UK TSOs who are shareholders of PRISMA to continue use PRISMA regardless of

status of ENTSOG membership

• The shareholder meeting also agreed an explicit resolution that no termination right should exist with regards to a

TSO’s country changing the status of its membership of the European Union

• Changes will be confirmed at a notary event in Leipzig tomorrow 7th December

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• INSERT SLIDES FROM ÁINE

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• 12. Transparency Data

Code Modification Forum

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Data Transparency Portal: UI/UX Design update

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Data Transparency Portal: UI/UX Design update

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Data Transparency Portal: UI/UX Design update

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Data Transparency Portal: UI/UX Design update

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Data Transparency Portal: UI/UX Design update)

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• 13. EBI Trading Platform Activity Presentation

Code Modification Forum

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IBP Gas Trading Platform Update to Code Mod Forum

6 December 2017

Date Activity July 2015 Company formed Sept 2015 ACER Organised Market Place Designation Oct 2015 Standard Broker Agreement circulated REMIT Reporting Agreement circulated Contract with Trayport signed Nov 2015 IBP 2015 Trading Terms published Dec 2015 First Broker Agreement signed Jan 2016 IBP bilateral negotiations commence.. Mar 2017 GNI Trading Platform tender published Apr 2017 GNI Trading Platform tender submission Sept 2017 GNI preferred tenderer status awarded Sept 2017 Broker Agreement #8 signed Sept 2017 IBP bilateral #15 closes 20/09/17 Trading Platform soft launch 01/10/17 Trading Platform launch

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Timeline to date

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Screen Shot of Test Platform

Initial trading concentrated here Some recent activity

• n Live platform

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Trading Platform Participant Status

Active participation Joining shortly Under consideration 7 shippers 3 to 4 shippers 3 to 4 shippers

Appears there is strong potential that between 13 to 15 counterparties will be trading the IBP in 6 to 12 months

• Trading platform ‘soft launch’ on 20 Sept

‒ Testing of IT systems, REMIT testing, back-office systems etc

• Go-Live date on 1 October
• Bids and Offers posted every day: first trade occurred on 5 Oct

‒ 50k therms of WD gas

• Trading activity has steadily increased since launching
• Trading confined to WD gas and DA gas to date, but interest growing in IBP/NBP locational spread

‒ Lower credit requirements may be helpful

• Interest in Moffat capacity trading seems to be captured within IBP Bids and Offers

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IBP Gas Trading Activity to date (1)

• Busiest week day: 7 trades with volume of 460,000 therms
• Busiest day at weekend: 300,000 therms traded
• A significant number of missed opportunities due to uncompleted bilaterals
• The most successful companies are those monitoring the screen at all times and having a wide range of bilateral

agreements in place

• Some parties have both bought and sold IBP gas. One company bought and sold WD gas within the same day
• 50k therms and 100k therms are most common clip sizes
• Max clip size traded 150k therms and minimum was 10k therms

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IBP Gas Trading Activity to date (2)

• Morning (8am to 10.30am) is generally busiest period with increased

activity between 3pm to 5pm

• Some posting of prices outside office hours

‒ Latest trade during gas day concluded at 22.10

• Bids and Offers posted at weekends and a number of trades have

completed at weekends

‒ 4 shippers traded on a recent Sunday (afternoon/evening)

• Clearly increased opportunities for trading if more bilaterals concluded

amongst existing trading participants

• New participants will help liquidity and provide more trading
• pportunities

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IBP Gas Trading Activity to date (3)

• EBI Trading Platform designed to meet requirements of EU Network

Code on Balancing

‒ Sufficient support throughout the gas day to facilitate balancing actions in short term standardised products ‒ Transparent and non discriminatory access ‒ Services on an equal treatment basis ‒ Anonymous trading until transaction concluded ‒ Detailed overview of all the bids and offers ‒ All trades to be notified to GNI

• GNI will be able to post Bids and Asks in the same way as other trading

participants

• Functionality within the trading screen software to ultimately facilitate

the publication of SAP, SMP Buy and SMP Sell

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GNI use of Trading Platform

• IBP electronic gas trading works

‒ Platform presents opportunities which were not previously available (e.g. out of hours trading potential) ‒ Has allowed parties to trade out of difficulties on a number of occasions – better option than imbalance charges ‒ Use of Trayport trading software has made platform easy to use

• May take 6 to 12 months to build strong liquidity
• Time taken to negotiate bilaterals is major constraint

‒ Should improve with EFET IBP Appendix

• Trading opportunities will increase as more bilateral trading agreements conclude
• Activity has been greater than anticipated during early months
• The TSO trading on the platform will boost liquidity and provide diversity
• Trading comes in flurries:- “Trading begets trading”

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Conclusions

• 14. Any Other Business

Capacity Conversion Service

• In accordance with Art.21 93) CAM NC, from January 2018, GNI will be offering Shippers

holding mismatched Unbundled capacity ( Moffat entry) a free-of-charge capacity conversion service. This service shall apply to annual , quarterly or monthly capacity products

• Shippers who wish to avail of the service should contact GNI

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Gas Quality Update to CMF

6th December 2017

IGEM Gas Quality Questionnaire for I/C End Users

• IGEM working with the gas industry and DNV GL to investigate the widening of the gas quality specification in GB.
• Study will gather information from stakeholders about the impact of changing gas quality on power generation, energy

intensive industrial processes, combined heat and power, process heating and the use of gas as a chemical

• feedstock. The proposed changes within the scope of the study are:

‒ To increase the upper Wobbe Index limit in the GS(M)R from 51.41 to 53.25 MJ/m3 ‒ To permit the addition of up to 20% hydrogen in the natural gas supply.

• Information about the project, the Gas Quality Group and the questionnaire itself are available on the IGEM website at

the following link:

‒ http://www.igem.org.uk/technical-standards/working-groups/gas-quality.aspx

• If you are able to contribute or wish to remain informed about the project please contact IGEM

at technical@igem.org.uk and put “Impact of Gas Quality on I&C Customers” in the subject heading.

• Closing date is 15th December 2017.

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Gas Quality Proposal at St. Fergus

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• BP’s UNC modification 0607 to increase the CO2 limit at NSMP’s St Fergus terminal from 4.0% to 5.5%

has been recommended by the UNC Panel for implementation.

• If Ofgem direct implementation, National Grid does not expect this contractual change to result in any

material change to CO2 content delivered to the NTS.

‒ Only required under upset conditions ‒ Commingling effect with other St Fergus supplies

Biomethane - Oxygen Content Assessment

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• Background: Proposed biomethane injection facility go-live in 2018.
• Current oxygen limit for injection into gas network is 0.2mol%
• Likely that some biomethane sources will not be able to meet this limit
• GNI is assessing the impact of increasing the oxygen limit up to 1.0mol%.
• Main concern is corrosive impact on on steel pipelines.
• Increasing the oxygen content to 1.0% should have no effect on the PE distribution network.
• Key to maintaining acceptable corrosion rates on steel pipeline systems is to control the water content.
• Impact assessment ongoing by GNI.

Code Modification Forum Meetings for 2018

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CMF Dates 2018 Location 17th January 2018 (Wednesday) Dublin 7th March 2018 (Wednesday) Cork 25th April 2018 (Wednesday) Dublin 13th June 2018 (Wednesday) Cork 8th August 2018 (Wednesday) Dublin 26th September 2018 (Wednesday) Cork 28th November 2018 (Wednesday) Dublin

Thank you for your participation