Code Modification Forum The Clarion Hotel, Cork 4 th November 2015 - - PowerPoint PPT Presentation

Code Modification Forum

The Clarion Hotel, Cork 4th November 2015

Agenda

• 1. Review of minutes from last meeting dated 16th September 2015
• 2. Review of Action Items from last meeting dated 16th September 2015

3. EU Network Code Communications Update

‒ Network Code Implementation ‒ Legal Drafting Status ‒ VRF Registration & Counterparty Setup ‒ PRISMA

4. Code Modification Proposals

‒ A069 ‘Back-up Capacity Arrangements under New Tariffing Regime’

• Update on workshop held on 6 October

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Agenda

5. Code Modification Proposals

‒ A070 ‘Implementation of the Inch Storage Entry Point’

• Consultation Update

6. Corrib Update

‒ Update on workshop on 9th October

7. Virtual Reverse Flow

‒ Update on workshop on 6th October

8. Any Other Business 9. Next Code Modification Forum Meeting

‒ Wednesday 9th December 2015 ‒ Ashling Hotel, Dublin

1. Review of minutes from last meeting dated 16th September 2015

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2. Review of Action Items from last meeting dated 16th September 2015

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ID Action Responsibility Status

C259 The Transporter is to issue letters to all End Users requesting that they sign End User Agreements. Transporter. Ongoing. C282 The CER is to proved the Forum with a high level update of CAG at the next forum meeting. CER Ongoing C356 The CER is to endeavour to ensure that metering errors will be addressed under the implementation of the Interoperability and Data Exchange Network Code. CER Ongoing C383 The Transporter is to consider issuing an NDM Accuracy of Forecasting Report before October 2015. Transporter Ongoing – The Transporter proposes to publish the report on 30 November 2015 for the previous gas year. C428 Add Gas/Electricity Interactions as a standing item to the Code Modification Forum Agenda on an as needed basis. General Ongoing

Code Modification Forum – Ongoing Actions

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ID Action Responsibility Status

C429 The Transporter is to determine whether a shipper would receive a Confirmed Quantity (CQ) of 0 if one of the parties in a Double Sided Nomination (DSN) renominated and its counterparty did not. Transporter Closed In this situation the previously matched nomination remains valid – i.e. a shipper would not receive a CQ of 0 in this scenario. C430 The CER is to respond to the proposal to allow shippers to buy capacity for non-annual period concluding in September 2016 at a pro-rata annual price. Transporter – Need to check this happened Closed C437 The Transporter is to proceed with the Code Legal Drafting to implement the changes to the Congestion Management Procedures. Transporter Closed Included in Part H C438 The Transporter is to issue final modification report on Code Modification A068 ‘Balancing: EU Network Code implementation’. Transporter Closed Legal Drafting approved in September 2015 C440 The Transporter is to issue the Code Legal Drafting on Part D of the Code

• f Operations to the CER for approval.

Transporter Closed Legal Drafting approved in September 2015

Code Modification Forum – Completed Actions

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ID Action Responsibility Status

C443 Shippers who have not already completed GTMS training session to contact Transporter to schedule session. Industry Closed All Shippers who have expressed an interest or requirement for this training have received it. C444 Transporter to arrange a workshop to discuss the issues raised in the Consultation for the A069 Code Modification Proposal Transporter Closed Workshop held 6 October C445 Transporter to circulate Interim Inch Arrangements proposal slides, including nominations and overruns information. Transporter Closed Circulated 18 September C446 Industry to comment on Interim Inch proposal by 25 September 2015. Industry Closed No comments received C447 Transporter to clarify the rationale for:

• the proposed non-availability of the annual capacity product
• the pricing of the capacity products; and
• the rationale for the ‘additional 16GWh’ during winter

Transporter Closed

• Slides issued 22 September
• Discussed at w/s 6 October
• Dedicated w/s 9 October

C448 Transporter to arrange a workshop to discuss VRF. Transporter Closed Workshop held on 6 October C449 Transporter to notify Industry about Go/No-go decision as taken by the 6 TSOs and NRAs regarding the 1 October go-live date. Transporter Closed Notified on 24 September C450 The Transporter and the CER to discuss the Tariff Model ‘Licence’. Transporter Closed Decision communicated on 29 September

Code Modification Forum – Completed Actions

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ID Action Responsibility Status

C404 The Transporter is to carry out a Trading platform Feasibility Study and submit its report to the CER following Industry consultation in September 2015. Transporter Open C442 Shippers who wish to receive training from PRISMA on new interface to contact PRISMA at info@prisma-capacity.eu Release date of new interface postponed until 17th December. Remote training sessions hosted by PRISMA to be scheduled. Transporter Open

Code Modification Forum – Open Actions

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ID Action Responsibility Status

C419 The Transporter is to reply to IOOA’s letter and to the spreadsheet IOOA submitted proposing a methodology to implement Enhanced VRF by October 2015. Transporter Open C434 The Transporter is to: Assess the feasibility of an interim increase in the amount of VRF currently available; and explain the logic behind the current VRF rules including why shrinkage is applied to VRF, why in the case of an interruption, VRF can be interrupted to 0 and the justification for the 20GWh limitation with a worked example Look at the existing VRF product to identify if more VRF capacity could be provided in the interim period before systemisation of the Enhanced VRF product is complete and whether or not a change could be made to the current situation where the Transporter interrupts to zero. Transporter Open C435 The Transporter is to respond to the IOOA request seeking clarification on VRF costs. Transporter Open C441 The Transporter is to review the decision making process in determining the 20GWh limit and when complete organise a meeting of interested parties to discuss. Transporter Open

Code Modification Forum – Open Actions (VRF)

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All of the above actions to be addressed as part of Agenda item 7: VRF

3. EU Network Code Communications Update

Code Modification Forum

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EU Network Code Implementation – Key Points

• 1 October Go Live: Balancing Network Code (Regulation EU312/2014)
• 1 November Go Live: Capacity Allocation Mechanisms (CAM) Network Code

(Regulation EU 984/2013)

• The project has delivered the following headline features:

‒ an amended Gas Day; ‒ introduction of and integration with the PRISMA capacity booking platform; ‒ removal of the Moffat Agent; and ‒ introduction of a new TSO-TSO nomination matching process.

• To achieve this 6 extensive code modifications as well as additional inter-TSO

agreements were required, along with comprehensive redesign of IT systems is all 3 jurisdictions

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Legal Drafting Status

• CER has approved Legal Drafting for Parts C, D, E, F, G, H and I.
• A new consolidated Version 5.0 of the Code of Operations will be produced in due

course.

• This will allow for all the modifications made during the EU Network Code

implementation to be included in the code.

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VRF Registration & Shipper Counterparty Setup

• In order to utilise VRF Shippers must send a registration request to their Key

Account Manager (KAM). This must include:

‒ Shippers EIC code ‒ UK upstream counterparties EIC codes to be used in matching process

• Following this an ad hoc invoice will be generated for the registration fee.
• From 1st October 2015 to 1st April 2016 the Registration Fee for Moffat VRF is

€4,593.

• Once the registration fee has been paid a shipper will be set up for VRF on GTMS

as requested.

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PRISMA Updates

• Platform Development and Operations working group held in Brussels on 29

October:

‒ Release date of PRISMA’s changes to user interface (Usability Project) postponed until 17th December. ‒ PRISMA will host a remote training session on new platform, likely before end of November – Shippers should contact PRISMA at info@prisma-capacity.eu to avail of this. ‒ PRISMA will provide Shippers with a service for REMIT reporting from 7 April 2016.

• PRISMA Within Day Trade Validation:

‒ Regarding the known issue with PRISMA’s within day trade validation, please see the following link on PRISMA’s website; ‒ Limitations to intraday trading on PRISMA secondary

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PRISMA User Assignments

• In order to participate in a bundled auction on PRISMA the login User should be

approved on PRIMSA by both TSO’s.

• Instructions for ensuring correct user assignments with NGG were emailed on 2

November.

• National Grids Customer Lifecycle team are responsible for issues with Shippers

individual Users.

• Contact details are as follows:

‒ Email: xoserve.customer.lifecycle.team@xoserve.com ‒ Tel: +44 121 623 2120

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Bundled Trades – NGG Control Centre

• Please be aware that National Grid have an offset of approximately 60 minutes for

approving a Bundled Trade on PRISMA.

• A Shipper performing a Bundled Trade on PRISMA from 02:00 onwards should

contact National Grid’s Control Centre on one of the numbers listed below.

• National Grid need to approve the Bundled Trade on Gemini. This will update the

Bundled Trade Status on Gemini and subsequently on PRISMA.

• This will ensure the Bundled trade is completed on PRISMA prior to the 03:00 cut off

time:

• NGG Contact Details:

‒ Gas Network Control Centre Network Manager +44 1926 653 200 ‒ Gas Network Control Centre Commercial Officer +44 1926 653 206

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4. Code Modification Proposal A069: ‘Back-up Capacity Arrangements under New Tariffing Regime’

Code Modification Forum

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A069 Timeline to date

• 23 July

CER issues Decision Paper CER/15/140

• 31 July

Code Modification Proposal Form issued

• 19 Aug

Proposer presented proposal to CMF

• 19 Aug – 2 Sep

Industry consultation on proposal form

• 16 Sep

Proposal discussed at CMF - offline workshop suggested

• 6 Oct

Offline Workshop (~1 hr) – Croke Park Hotel

_____________________________________________________________________________________________________________________________

• TODAY:
• Summary of 6 Oct workshop
• Proposed next steps
• Further discussion of items not fully covered on 6 Oct

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Workshop Summary Croke Park Hotel 6 Oct 2015

• Attendance:

CER (2) GNI (5) Industry (13)

• All Industry representatives present supported the concept of ‘reduced cost’ capacity, provided

that this only applies to a limited set of clearly defined circumstances.

• Notwithstanding the above, the CER will consider the impact of the proposal further to ensure

that it is fair and equitable in all circumstances - the CER noted potential compliance issues in terms of CAM and Tariff Network Codes as one of the factors it will consider

• Industry asserted that in the case of a ‘downstream’ network issue (i.e. If TSO is responsible for

non-availability of capacity at an entry point), the Shipper should not have to pay any capacity tariff in respect of the ‘back-up’ entry point.

• An Industry representative highlighted that should a Shipper, simply for commercial reasons (as
• pposed to as a result of an outage), opt to move from one entry point to another, it should not be

entitled to avail of back-up arrangements.

‒ The modification proposer disagreed, stating that the fundamental principle of the proposal was that, in any circumstances, a Shipper should not have to pay the ‘secondary adjustment’ element of the tariff twice.

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Proposed Next Steps

By 30 November 2015: ‒ The Transporter will issue an Initial Modification Report (IMR), to include:

• Summary of Industry discussion to date (including today’s discussion)
• Assessment of EU Network Code compliance issues

Early – mid December: ‒ 2 week Industry consultation period re IMR January 2016: ‒ CER direction to the Transporter on whether or not to proceed further with modification

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For Discussion Today

When to Apply?

‒ Clearly define circumstances in which reduced cost capacity may apply ‒ Offshore issues? Onshore issues? Both?

How to Apply?

‒ Capacity products - daily, monthly, quarterly, annual? ‒ In advance? Via specific ‘back-up’ tariffs / multipliers? ‒ In retrospect? Via rebate?

5. Code Modification Proposal A070: ‘Implementation of the Inch Storage Entry Point’

Code Modification Forum

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A070 Current Status

• Modification proposed: 2 September.
• Discussed at Code Modification Forum: 16 September.
• No Responses to initial consultation.
• Business Rules and IMR issued on 16 October.
• 2 Responses received.
• CER to decide on whether to proceed with modification.

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Business Rules Summary

• The Inch Entry Point, to be replaced with two distinct Entry Points as follows:

‒ the ‘Inch Storage Entry Point’, at which point storage gas may be delivered to the Transportation System from the Inch delivery facilities; and ‒ the ‘Inch Production Entry Point’, at which point production gas may be delivered to the Transportation System from the Inch delivery facilities. ‒ Note: It has not yet been finalised how this change will be reflected in the Code and on the GTMS platform (e.g. two new entry points or two ‘commercial’ entry points as a subset of a ‘physical’ entry point.

• The current Technical Capacity of the Inch Entry Point (55,000,000 kWh) to be subdivided between storage and production

as follows :

‒ Inch Storage Entry Point: 46,750,000 kWh (85%) ‒ Inch Production Entry Point: 8,250,000 kWh (15%) The proposed split is based the forecast storage to production booking ratio for gas year 15/16.

• The Inch agent will now provide separate allocations in respect of the Inch Storage Entry Point and the Inch Production

Entry Point. Otherwise, the Transporter shall allocate all metered gas to the Inch Production Entry Point by default, with Shippers being invoiced accordingly.

• Two responses were received in relation to this modification

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Business Rules Consultation Responses

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Shipper Response Transporter Response Both respondents queried the wording of clause 2.9 of the Business Rules. Wording should have read: ‘…shrinkage charges will not be applied in respect of gas allocated to the Inch Storage Entry Exit Point and shrinkage charges will be applied in respect of gas allocated to the Inch Production Entry Exit Point’. One respondent expressed the

• pinion that the 85:15 split between

storage and production was too prescriptive, and suggested a first come first served basis for allocation. The 85:15 split would be configurable and could be altered to a more appropriate split if necessary. However the Transporter would be open to an alternative approach if it was deemed more effective. One respondent queried what would constitute “insufficient information” as stipulated in clause 2.7 and stated that the Inch Agent should have an opportunity to remedy any mistakes. The Transporter agrees that more detail is required in relation to this clause, and feels that this detail can be agreed with the Inch Agent as the Modification progresses.

Questions?

6. Corrib Update

Code Modification Forum

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GNI Proposal - 22 September 2015

On 22 September 2015 GNI circulated the following in relation to the tariff at Bellanaboy during Commissioning:

• The requirement to complete the works, together with the variability in available capacity, result in annual

firm capacity not being available

• Therefore, Annual entry capacity products at Bellanaboy Entry cannot be made available until the

programme of works is completed and the Linkline uprated to 85 barg.

• However, Monthly and Daily Entry Capacity products will be made available at Bellanaboy
• Ahead of each month, GNI will publish the amount of capacity being made available and will communicate

same to shippers.

• GNI will endeavour to communicate the amount of capacity being made available to Shippers by M-10 (i.e.

10 days before each month).

• Consideration is being given to the pricing of the daily and monthly products at Bellanaboy during this period

prior to pipeline completion;

• The temporary ‘Commissioning Tariff’ at Bellanaboy being 1/365 of the BET and applying until the pipeline is
• perating at 85bar and annual products are available;

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Corrib Workshop 9 October 2015 Update

• BGE committed to submitting an alternative proposal to GNI’s daily capacity tariffing

proposal.

• Proposal submitted on 12 October and circulated to industry.
• 4 responses received.

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BGE Proposal Summary

BGE Proposal Rationale: 1. During the commissioning program GNI will for a minimum period of circa 3 weeks be seeking Shippers to maintain a constant flow from the Corrib field to ensure the successful pigging of the link-line and therefore require shippers support. 2. The capacity on the link-line is interruptible until commissioning is completed when pipe is re-rated to 85bar. 3. During the summer period the rate of 1/365th is higher than the existing Short-term capacity rates. 4. An Interruptible capacity product and associated rates have been previously applied by CER, but to which the Interruptible capacity had very limited interruption rights and capped at 10 days Tariff Proposal: 1. Final Tariff rate should be the lower of the short-term product rates or rates proposed below. 2. Proposed Rate of:

1. Shoulder Months of (Oct, Nov & April) – 65% 2. Shoulder Month of May2 – 5% 3. Winter period (Dec – Mar) – 100% 4. Summer period (Jun – Sep) – 5%

3. For the duration when GNI requires Shippers and Corrib Owners support by providing a constant volume to facilitate the Link-line commissioning then applicable rate should be reduced by 50% to reflect a sharing element between the parties.

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Responses to BGE Proposal

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Number of Respondents Position 1 Fully supported the Proposal 2 Did not support the proposal. Preferred GNI’s proposal 1 Rejected the proposal

The responses are summarised in the following slides. The actual responses were circulated via email on 2 November, and these should be referred to for precise wording.

Corrib Tariff Responses

1. Response 1 was fully in favour of BGE proposal. 2. Response 2 was not in favour of the BGE proposal for the following reasons:

1. GNI’s proposal for the application of 1/365 of the long term price for short term products is an appropriate response to uncertainty surrounding the Mayo-Galway Line. 2. Annual products will resume following the uprating of the Linkline. 3. The level of multipliers at Bellanaboy requires more extensive consideration.

3. Response 3 was not in favour of BGE proposal. It was felt there is not enough time to consider the wider impacts of the proposal, and therefore supported GNI’s

• proposal. However they also stated that they would like to see alternative solutions

assessed in the future.

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Corrib Tariff Responses Contd.

• Response 4 rejected the proposal from BGE, including for the following reasons:

‒ The primary beneficiaries of the Linkline are shippers and producers at Corrib, and the cost associated with commissioning should be borne by same. ‒ The proposal gives an additional advantage to Shippers at Corrib, over and above that which they feel is given by the 1/365th approach. ‒ It erodes the incentive for the producer to ensure that commissioning is carried out as swiftly as possible. ‒ BGE proposal changes aspects of the CER Entry Exit decision which was widely consulted

• n among industry. The respondent stated that no changes in circumstances had arisen that

would justify these changes. ‒ Corrib have confirmed that they are responsible for stable flows during pigging and that the contractual arrangements are in place to ensure this. These contracts should account for the risks associated with Commissioning. ‒ Respondent is unaware of any similar proposals in other jurisdictions and queries why it is necessary in Ireland.

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Code Modification Forum

Interim VRF Timeline to date

• 28 Aug

Initial meeting in Kinsale Energy offices

• 16 Sep

Forum updated re 28 Aug meeting – further workshop proposed

• 6 Oct

Offline Workshop (~1 hr) – Croke Park Hotel

‒ Agreed product scope for GNI to consider and revert with potential implementation date, if feasible

____________________________________________________________________________________________________________________

• TODAY:
• Summary of 6 Oct workshop outcomes
• GNI update re consideration of interim product

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Interim VRF

Agreed Product Scope – 6 Oct 2015

• Outcome of 6 Oct Workshop:

Agreed scope of Interim VRF for GNI to consider and revert

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Consolidated Interim VRF Proposal (6 Oct 2015)

• Assume no agent to be used – i.e. Transporter to operate VRF product directly;
• Available VRF Capacity = 80% of FF nominations at day-ahead stage;
• VRF Capacity sold in one day-ahead PRISMA auction only;
• VRF Nominations day-ahead only – no within-day nominations or overnominations
• Interruption to deemed flow on 1/24 basis;
• In the event of an interruption occurring, the TSO calculates deemed flow and issues a VRF Capacity interruption notice to

the level determined by the TSO to each Shipper who has booked VRF Capacity;

• The Shipper must then re-nominate as per the interruption notice i.e. TSO does not alter the CQs for each Shipper in the

event of an interruption;

• All re-nominations feed in to the matching process, allocations and billing cycle – no manual intervention needed by TSO;

Interim VRF

GNI review of proposed product scope

• Operate as a manual process?

‒ GNI does not deem this appropriate given the potential risk to forward flow matching process and other GNI control room operations

• Can the product be systemised?

‒ Yes - some minor scope changes required (see subsequent slides)

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Interim VRF

Comparison: Existing v Interim

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EXISTING INTERIM Comment Limited Seasonal VRF Capacity 100% of Moffat technical capacity made available 2 primary asks of interim product VRF Allocation = zero if interrupted VRF Allocation = deemed flow if interrupted Shipper must renominate in event of interruption TSO changes CQ on behalf of Shipper – no need to renominate Systemising this function avoids risk

• f manual error and ensures

changes take place within the current nomination cycle Interim product delivers substantial improvements relative to existing product

Interim VRF

Comparison: Interim v Enduring

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INTERIM ENDURING Comment 100% of Moffat technical capacity made available SAME VRF Allocation = deemed flow if interrupted SAME TSO changes CQ on behalf of Shipper – no need to renominate SAME Day-ahead Nominations only Within-day Renominations Day-ahead Capacity only Within-day capacity by way of ‘overnominations’ Significant complexity and cost involved Day-ahead Capacity only Within-day, Shipper A can use Shipper B’s unutilised capacity Simple interruption rule: pro rata to noms Complex interruption hierarchy Interim product substantially less complex and costly to develop than enduring

Interim VRF Proposed amendments to scope

• Propose to modify scope of Interim VRF product (6 Oct) as follows:

‒ Available VRF Capacity = 100% of Moffat technical capacity (23 mscm/d) ‒ Day-ahead VRF Nominations - no check against capacity ‒ Interruption check takes metered physical flows into account - hourly within day interruption check - Interrupt if:

• Forward Flow CQs - VRF CQs <= Metered Physical Flow + Projected Delivery (next 2 hrs)

‒ Incorporating physical metering avoids situations where ‘negative’ physical flows would be scheduled at Moffat i.e. where the net physical requirement for the day is less than what has already been delivered to date ‒ Calculation of Shipper’s new VRF CQ takes metered physical flows into account - reduce CQ pro rata to prevailing CQ until above interruption check is passed ‒ The TSO will alter the Shipper’s CQ directly (systemised, not manual) i.e. no need for Shipper to renominate;

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Any Other Business

Code Modification Forum

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9. Upcoming Code Modification Forum meetings:

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Dates Locations Wednesday 9 December The Ashling Hotel, Dublin 2016 Forum dates to be proposed at December meeting.

Thank you for your participation