Infrastructure is Key A Measure of Our Confidence in the Future. - - PowerPoint PPT Presentation

Infrastructure is Key

A Measure of Our Confidence in the Future.

John Barry - Bord Gáis Networks

2

Gas Industry Development

 1976

• Bord Gáis Éireann - State Gas Development Agency

 1978

• First Natural Gas deliveries to Ireland

 1994

• Interconnector to Scotland

 1995

• Third Party Access

 Introduced for sites consuming >264GWh (70% of the market volume)

 2002

• Market opening for 250 gas sites – 2nd Interconnector to Scotland

 2002

• CER appointed to regulate the natural gas sector

 2007

• full market opening – competition available in all sectors

 2008

• Gaslink ( Independent System Operator) – EU 2nd Directive

 2009

• EU 3rd Directive - creation of the Independent Transmission Operator (ITO)

 2011

• Common Arrangements for Gas (CAG)

3

BGÉ under ITO

CEO BGÉBoard Group Functions ITO M D

Support Services

Energy Business ITO/ Networks Board Networks & Gaslink Businesses (T & D)

Corporate Functions

ITO Supervisory Body

ITO Legal Structure

• 100% owned subsidiary of BGÉ, legally

unbundled

• Limited liability company
• Transfer of assets to ITO
• Essentially the amalgamation of Gaslink

& Bord Gáis Networks as an independent subsidiary of BGÉ.

• As required by the Directive, the ITO

would be supported by its own Corporate, IT, Finance and HR functions, creating a completely stand alone and independent subsidiary.

• ITO will combine the Transmission

system ownership and Transmission System Operation along with Distribution System Ownership and Operation

• GB and NI networks businesses

(excluding firmus distribution) will be incorporate into the single ITO

• Achieving compliance requires a major

change in the day to day operations of Bord Gais as currently constituted

BGE , under the 3 rd Directive ,w ill establish an independent subsidiary to ow n and operate the transmission and distribution netw orks.

The Natural Gas Grid

5

Cork Area Pipelines

circa 1979

6

Cork to Dublin Pipeline

circa 1982

7

Dublin Area Pipelines

circa 1985

8

Limerick Pipelines Waterford Pipelines

circa 1986

9

North Eastern Pipelines

circa 1992

10

Interconnector 1 Pipeline Scottish Pipeline

circa 1995

11

Ballyraggert Pipeline Westcork Pipeline Navan Pipeline

circa 2000

12

Gas to the West Pipeline Interconnector 2 Pipeline Isle of Man Pipeline

circa 2002

13

North West Pipeline Galway City Pipeline Tynagh Pipeline

circa 2005

14

Mayo Galway Pipeline

circa 2006

15

South North Pipeline

circa 2007

16

17

The number of tow ns w ith a gas distribution system has grow n, including in Northern Ireland …

 Currently have 10,500km of Distribution Network.  100% PE @ Q4 2009  C.€160m 2004 -2009  2300km Transmission Network  X2 in period 2002 - 2007  Natural Gas available in  over 140 population centres  18 counties in Ireland  over 610,000 gas users  Firmus energy, BGÉ subsidiary  licensed to supply gas to ten towns in NI  construction roll-out started in 2005 with c. 2,800 customers now connected

BGN Netw ork System Demand / Performance during the Severe Weather Period in December 2010

19

ROI Gas Demand During December 2010

 December 2010 was the coldest December since records began in 1947 with a corresponding coldest record day at Dublin Airport on 24th December 2010, where the average temperature over 24 hours was - 8.6 degrees C (23.6 Degree day).  The BGN Gas Network experienced near record levels of daily system demand of 248 GWh on 8th December 2010 compared with a previous record level of 250 GWh on 7/8th January 2010.  A domestic / small I/C non daily metered (NDM) peak day demand of 94.9 GWh occurred

• n 21st December 2010 compared with a record figure of 95.2 on 8th January 2010. NDM

demand reached 92.6 GWh on 24th December 2010.  The total Republic of Ireland (ROI) demand for December 2010 was 17% higher than December 2009 with NDM demand up approximately 32% over the same period in 2009.

20

Overall System Gas Supply/ Demand – 8 th December 2010

ROI Demand ~248.1 GWh/d NI Demand ~74.6 GWh/d Inch Supply 33.7 GWh Moffat Supply 303.9 GWh  Gas supplies from Great Britain and Inch were stable throughout December 2010.  A record flow of 20.6 mscm/d was delivered through the Subsea Interconnectors on 8th December 2010:  The first subsea interconnector (IC1) design capacity of 17.0 mscm/d was exceeded on 22 occasions during December 2010.  Loss of Inch supply on 8/21st December 2010 would have increased the Interconnector System throughput requirement close to its current design

• perating limit.

 Approximately 95GWh of additional gas was used to increase Subsea and On Shore pipeline stock to mitigate against any potential within day supply/ compressor interruption during December 2010.

Flow Summary (mscm/d) Total Demand 30.4 Total Supply 30.4

• Inch

3.2

• Beattock

27.2

• ICs

20.6

• SNIP 6.6

IOM Demand 4.9 GWh Own Use 10.0 GWh

21

Comparison of Gas Demand – January/December 2010 and 2009

0.0 30.0 60.0 90.0 120.0 150.0 180.0 210.0 240.0 270.0 01-Jan-10 03-Jan-10 05-Jan-10 07-Jan-10 09-Jan-10 11-Jan-10 13-Jan-10 15-Jan-10 17-Jan-10 19-Jan-10 21-Jan-10 23-Jan-10 25-Jan-10 27-Jan-10 29-Jan-10 31-Jan-10 02-Feb-10 22-Nov-10 24-Nov-10 26-Nov-10 28-Nov-10 30-Nov-10 02-Dec-10 04-Dec-10 06-Dec-10 08-Dec-10 10-Dec-10 12-Dec-10 14-Dec-10 16-Dec-10 18-Dec-10 20-Dec-10 22-Dec-10 24-Dec-10 26-Dec-10 28-Dec-10 30-Dec-10

Demand (GWh/d)

J anuary and December 2010 Daily Demand by Sector

• 1. Power
• 2. Tx DM I/ C
• 3. Dx DM I/ C
• 4. NDM
• 5. Shrinkage

J an & Dec '09 Demand

J anuary & December 2009 ROI Demand

22

0.0 30.0 60.0 90.0 120.0 150.0 180.0 210.0 240.0 270.0 300.0 330.0 360.0 22/ 11/ 2010 23/ 11/ 2010 24/ 11/ 2010 25/ 11/ 2010 26/ 11/ 2010 27/ 11/ 2010 28/ 11/ 2010 29/ 11/ 2010 30/ 11/ 2010 01/ 12/ 2010 02/ 12/ 2010 03/ 12/ 2010 04/ 12/ 2010 05/ 12/ 2010 06/ 12/ 2010 07/ 12/ 2010 08/ 12/ 2010 09/ 12/ 2010 10/ 12/ 2010 11/ 12/ 2010 12/ 12/ 2010 13/ 12/ 2010 14/ 12/ 2010 15/ 12/ 2010 16/ 12/ 2010 17/ 12/ 2010 18/ 12/ 2010 19/ 12/ 2010 20/ 12/ 2010 21/ 12/ 2010 22/ 12/ 2010 23/ 12/ 2010 24/ 12/ 2010 25/ 12/ 2010 26/ 12/ 2010 27/ 12/ 2010 28/ 12/ 2010 29/ 12/ 2010 30/ 12/ 2010 31/ 12/ 2010

Daily Gas Supply (GW h/ d)

November & December 2010 Gas Supplies - M offat and Inch

Inch M offat (ROI & IOM ) M offat NI Beattock Capacity

23

0.00 10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00 100.00 0.0 20.0 40.0 60.0 80.0 100.0 120.0 140.0 160.0 22/ 11/ 2010 24/ 11/ 2010 26/ 11/ 2010 28/ 11/ 2010 30/ 11/ 2010 02/ 12/ 2010 04/ 12/ 2010 06/ 12/ 2010 08/ 12/ 2010 10/ 12/ 2010 12/ 12/ 2010 14/ 12/ 2010 16/ 12/ 2010 18/ 12/ 2010 20/ 12/ 2010 22/ 12/ 2010 24/ 12/ 2010 26/ 12/ 2010 28/ 12/ 2010 30/ 12/ 2010

Electricity System Demand & Wind Generation (GWh/ d)

Power Gen Gas Demand (GWh/ d)

Power Gen Gas Demand , Electricity System Demand and Wind Generation

Power Gen Gas Demand Wind Gen (Right Axis) Electricity System Demand (Right Axis)

Forced outages at two C CGTs from 21st December resulted in a fall-

• ff in power gen

gas demand

24

Distribution Netw ork Performance December 2010

 The Bord Gáis Distribution Network coped with the record demands during the severe weather period with minor interruptions in a small number of housing estates due to freezing equipment .  There was an increase of approximately 32% in the number of Public Reported Escapes (PRE’s) & 68% in “No-gas” calls received by Bord Gais compared with December 2009.  Very difficult driving conditions in December resulted in 5% (152) of PRE response calls falling outside the one hour criteria despite an increase in response resources

• n the ground from 40 to 60 people and the use of four wheel drive vehicles. No

related incidents were recorded. 2009 2009 2010 2010 Nov Dec Nov Dec PREs 2,106 2,320 2,034 3,078 Outside Criteria 3 5 12 152 No Gas Total 1,263 1,380 1,510 2,317

Natural Gas as a Transport Fuel

Natural Gas Vehicles (NGV)

 Provides a real alternative to petrol and diesel  Two main types of NGV’s:

 ‘Dedicated’ - run on Natural Gas only  ‘Bi-Fuel’ vehicles operate on Natural Gas while retaining the ability to use petrol as a reserve fuel

 Proven vehicles & technology

 Over 13million NGVs worldwide

 Vehicle manufacturers have proven options available

 Purpose built - directly off the production line  Natural Gas stored in concealed cylinders  No payload restrictions

‘Normal’ refuel process Purpose built –> under floor cylinder storage retains full space

26

Benefits

 Improve air quality and health benefits

 Reduced emissions of Nitrogen Oxide, Particulate Matter and Sulphur Oxide

 Reduce greenhouse gas emissions  Lower fuel costs / Affordability

 Enhance competitiveness

 Increase Security of Supply by providing transport fuel diversity  Reduce noise  Pathway to a renewable fuel source – Biomethane  Proven technology (13million NGVs)

 Cost Competitive vs Alternative

Approx Vehicle Cost (3.5t van) Diesel NGV Electric

(Equivalent 4.6t)

€22,000 €25,000 €85,000

27

Bord Gáis Netw orks Activities

 Undertaking research and learning lessons from Europe

 Commissioned financial & technical study (DKM/Fingleton White)

 NGV within our own fleet

 Installed a refuelling point/purchased an NGV  Developing refuelling facility to cater for additional NGVs

 Engagement with potential industry stakeholders

 Fast -fill facility  Developing refuelling facility incentive programme  Initial industry trial with BGN NGV

 Communications and awareness

 Holding industry meetings  CNG event 17th November

 BGN aim to develop a number of R&D projects

28

DKM Findings – CNG Financial Benefits

 CNG enjoys a very significant price advantage over diesel

 40% Saving vs Diesel for Vans (Cost / 100km)  45% - 50% Saving vs Diesel for Buses & Trucks (Cost / 100km)

 Switching to CNG is viable for small fleets of buses/trucks and larger fleets of vans  Lower vehicle emissions even after adoption of Euro VI  CO2 production per unit energy is 25% lower for gas than diesel  Achieving European market penetration levels significantly increases gas network utilisation and reduces Gas Network Tariffs

29

Security of Supply

33

Medium-term security of supply outlook

 ROI security of supply outlook will improve with Corrib:  Corrib is projected to initially supply c. 39% of the ROI peak-day demand, and c. 62% of its annual demand:  Production is forecast to “plateau” after a few years, however, and then decline (less than 50% of peak-day production after 6- years)  ROI dependence on GB imports will increase again as Corrib production declines unless new sources of supply are developed:  Potentially may have to source the majority of the ROI annual gas requirements from GB again in the long-term?  But will GB have the gas? and if the GB outlook is “secure” and infrastructure is adequate, then is the ROI secure?

34

Impact of Corrib

 1 in 50 Peak-day  Average Year Peak-day

RES+I/C Peak-day & Corrib (1 in 50) 20 40 60 80 100 120 140 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 RES+I/C & Corrib (GWh/d) I/C RES Corrib RES+I/C Peak-day & Corrib (AVE Yr) 20 40 60 80 100 120 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 RES+I/C&Corrib (GWh/d) I/C RES Corrib

A Utility Approach to the Water Industry

Drivers for Change

 Programme for Government (March 2011)

 Introduction of Domestic Water Metering and Charging

 EU/IMF Memo

 Prior to introduction of water charges  Assess Transfer of Water Services from Local Authorities (LA’s) to Utility  Draft Implementation Plan by Q4 2011  Commence Water Charging by 2012/13

 Sovereign Debt Crisis provides

 Incentive that removes funding from State balance sheet or  at a minimum introduce effective management and charging to fund investment

 Severe Weather exposed

 Weaknesses of current infrastructure and communications Opportunity to Propose New Water Utility Structure

36

• Introduction of Water Charges
• Water Conservation
• EU Directives
• Revenue Collection
• Customer Confidence
• Foreign Direct Investment
• Identification of customers and connections.
• Timely installation of metering.
• Leakage >60% in places.
• Significant customer side leakage.
• Mains rehabilitation to take decades.
• Water Framework Directive and River Basin Mgt Plans.
• Non-domestic water charges returns are poor.
• Lack of security of supply.
• Poor communications.
• Requires high quality water supply at a reasonable cost.

Future Challenges

Significant future challenges ahead in the Water Sector

37

• 34 Local Authorities
• Dept. Environment Heritage & L.Gov
• EPA
• OPW
• Private Sector
• Finance
• Infrastructure Deficit
• Fragmented Industry Structure
• Abstraction, Water Supply, Sewerage Treatment,

Discharge, and Network Management

• Existing Network Serves 88% of population
• Central authority and provision of funding
• Water quality
• Flooding & River Management38
• Specialist on treatment plants
• Central Government funding unsustainable
• Historical under investment
• Lacks central control and strategic direction

Existing Water Industry Structure

Current Structure not suitable to meet future challenges

38

Significant New Policy Requirements

IMF Requirement – new funding model SOS and quality Requirements – significant capex Efficiency requirements– consolidation Direct customer funding Major business change Business continuity New utility able to raise finance Metered resource usage

Three inter-related policy requirements leading to six essential outcomes

Capex plans and delivery

Achievement of the outcomes will require four new elements

A new utility

Essential to meet funding and efficiency requirements

Regulation

Regulation to protect customers, support financeability and incentivise efficiency

Capex delivery

Ability to design and deliver successful and efficient capex programmes and metering roll-out

Transition plan

Ability to manage complex consolidation and transition programme rapidly, without jeopardising business continuity

* Source: Ernst & Young

39

Netw orks Transformation Programme

Bord Gais Networks High Performance Utility Model - HPUM

BGN – Core Skills

• Experience of Regulated Contract (RC)
• Network Management
• Customer Management Systems
• Track Record of Business & Project

Delivery

• Invested in Utility Mgt Systems
• Successful operation of RCV.
• Development of RAB and operation of Gas Network.
• UK Water industry model based on RC.
• Develop and operate 10,000km Dist & 2000km Trans.
• Focus on Asset mgt and efficient targeted investment
• Circa 95% of field activity outsourced.
• Concentrates on core skills and mgt of supply chain.
• 300,000 calls handled by call centre annually.
• 95% positive result - Customer Satisfaction Survey.
• Won eight national and UK customer service awards

in 2009 and 2010.

• Invested €1.1bn and doubled Network in last 10 years.
• Project ranges from large transmission to urban district

main replacement.

• Strong management of multiple stakeholders.
• Positive working relations developed with LA’s.
• Transform Networks organisation for next generation.
• IT systems deployed in field.
• Improved customer and business processes.
• System best in class in gas and water utility industry.

BGN has Core Skills, Resources & Systems for Utility Management

42

Review of BGN Management Systems and Ofw at Standards

Key Performance Indicator Ofwat BGN Customer Care Management System

 

Complaint Resolution Procedure

 

Metering Fitting and Appointment Management

 

Reinstatement Standard and Completion Time Management

 

Management of Response to supply interruptions to connected properties

 

Network Safety Management Systems

 

Network Control & Leakage Management Systems

 

• Note: Ofwat – UK Regulator for the Water Industry

BGN Existing Management Systems are Applicable to the Water Industry

43

Water Value Chain & Alignment w ith BGN Core Skill/ Operations

No Alignment Limited Alignment Aligns with Skills Aligns with Skills Partial Alignment Partial Alignment Limited Alignment

44

BGN – Gaps in Capability

• Water Industry knowledge/ experience
• Non-alignment of key skills in specific areas
• Plant Operation – specific to the water industry
• Geographic coverage outside existing BGN operations
• Resource capacity
• Scale and spread of water industry operations

Further Assessment Required to address BGN Capacity Gaps through Partnering

45

Indicative Transition Plan – Timescale???

* Source: Ernst & Young

46

Aurora Telecom

Fibre to the West

• Established in 2000 as Carrier Neutral Open-

Access Telco Provider

• Core Business is the lease and operation of fibre
• ptic networks
• Build out and operation of Dublin Metro Fibre

Network circa 120km

• Secure Network constructed in ducting adjacent to

gas network with best in class Service Level Agreement

• Proven expertise in dark fibre solutions for Service

providers, Public Bodies and Corporate Customers

• Currently in process of a 1200 kilometre National

Fibre Network extension

National Netw ork Rollout

Phase 1

• 330kms of duct network linking Dublin to the

towns of Galway, Ennis, Athlone & Mullingar

• On target for programme Completion Date of Q3

2011 Phase 2

• Network extension from Ennis to Cork picking

up the towns of Shannon, Limerick & Mallow Integration with Cross Functional support:

• Project scheduled for completion in Q1 2012

Galway Athlone Mullingar Dublin Metro Network Ennis Shannon Cork Mallow Limerick

Galway Limerick Portlaoise Thurles Cashel Ennis Shannon Cork Mallow Castlebar/ Westport Athlone Mullingar Dublin Metro Network Kilkenny Waterford Wexford Balbriggan/ Gormanstown

Phase 3

• 140kms network extension from Galway to

Mayo, completion date of 2012 Phase 4

• Closure of main network ring linking Cork to

Dublin with fibre network distance of 240kms Phase 5

• Dual utility network project. Installation of both

gas and telecommunications from Kilkenny to Waterford and Wexford Phase 6

• Dublin to Balbriggan and Gormanstown. Project

completion date of 2012.

Proposed National Footprint 2015

Dublin to Balbriggan/ Gormanstow n

• In 2012, it is expected to extend the

national network to Balbriggan & Gormanstown as shown RED

• This will link back to Dublin and all main

cities on the Dublin metro

• The BLUE line shows Eirgrid’s

proposed Ireland to UK fibre link (part of Electricity interconnect). Aurora will extend this international connectivity to this region.

• BGE Networks Integration with Cross

Functional support include areas such as

• Engineering
• Aerial & Foot-patrols
• Drawing Office
• Wayelaves

BGE Netw orks & Aurora Cross Functions

• Procurement
• Corporate & PR
• Network Operations
• Legal
• Finance