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Project Nexus Principle Workshop Project Nexus Principle Workshop ALLOCATION ALLOCATION 15 January 2010 15 January 2010 0 Allocation processes why are they needed? Allocation rules are needed to share out all energy in an LDZ


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Project Nexus Principle Workshop Project Nexus Principle Workshop ALLOCATION ALLOCATION

15 January 2010 15 January 2010

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Allocation processes – why are they needed?

Allocation rules are needed to share out all energy in an LDZ

Before the day – Nominations process After the day – Energy balancing and commodity billing processes

Need to measure or estimate all inputs and outputs Currently do not have daily reading equipment on all meter points (21+ million) So, need some means of estimating demand for non-daily metered (NDM) meter points Will need to share out energy fairly between remotely and non-remotely read meters until the last dumb meter is upgraded/removed

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NDM (derived in aggregate) DM (measured) LDZ Shrinkage (estimated)

LDZ Inputs (measured) LDZ Inputs (measured)

NDM Consumption = LDZ Demand – LDZ Shrinkage – DM Consumption

Energy in the LDZ

Not to scale

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NDM profiles apportion demand in aggregated combinations of:

End User Category Shipper Exit Zone

Aggregate NDM

NDM Demand Attribution

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Inputs to NDM Demand Attribution

Actual NDM Demand

Agg. Shipper/ Exit Zone AQs Daily Adj’m’t Factors (DAFs) Annual Load Profiles (ALPs) NDM Demand Attribution

Developed before the Gas Year Known before the Gas Day Known after the Gas Day

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Allocation processes – Timelines (1)

GAS DAY = D D - 1 D+1 to D+5

INPUTS OUTPUTS

Daily Energy Allocations Total System Outputs Energy Balancing Indebtedness Total LDZ Energy, Actual DM Reads

Daily Energy Nominations Informs gas purchasing Estimated LDZ Energy, DM Estimates (from Shippers) ALPs, DAFs, AQs

final final final final

Gas Nominations Gas Allocations

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Allocation processes – Timelines (2)

End of Month

INPUTS OUTPUTS

LDZ Commodity Invoice

M+8 M+18 M+23

DM Resynchs, NDM Reads Final Daily Allocations System inputs Reconciliation Invoice Energy Balancing Invoice

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NDM Apportionment Formula

S.P. Demand = (AQ/365) * ALP * (1 + [WCF * DAF]) * SF average daily consumption

  • ver the year

Profiled daily consumption under average weather Adjustment to daily consumption to take account

  • f prevailing weather and

sensitivity to deviation from average weather Scale to ensure everything adds up

UNC H2.2.1

AQ = annual consumption of meter/supply point under conditions of average weather

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End User Categories

NDM Energy currently allocated by End User Category – “EUC” All NDM sites in an EUC treated identically for nomination and allocation Assigned to an EUC based on LDZ and supply point AQ Each EUC has its own Annual Load Profile and Daily Adjustment factor ALPs and DAFs created using daily read data from the NDM Sample 429 EUCs – 33 per LDZ

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Annual Load Profile

  • ALP : ratio of seasonal normal daily consumption in EUC to average daily

seasonal normal consumption in that EUC over the year

  • Example of 365 ALPs for a Smaller Supply point EUC (weather-sensitive):

ALP for EUC WM:E0901B

0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 2 Gas Day 50 100 150 200 250 300 350

Domestic usage – increases at weekends

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Daily Adjustment Factor

  • DAF : ratio of percentage weather sensitivity of EUC to percentage

weather sensitivity of total LDZ demand

  • Example of a DAF for a Larger Supply point EUC (slightly below average

weather-sensitivity):

DAF for EUC WM:E0903W02

0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 Gas Day 50 100 150 200 250 300 350

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Winter:Annual Ratio (WAR) Bands

Higher AQ Bands have a standard EUC plus 4 differential EUCs based on ratio of winter consumption to total annual consumption Monthly read sites with adequate read history allocated automatically to a WAR Band based on system calculation during AQ review

Weather sensitive Weather insensitive

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ALP for EUC NW:E0908W01

0.2 0.4 0.6 0.8 1 1.2 1 51 101 151 201 251 301 351

Variation in ALPs

  • Left : a

weather- insensitive Larger Supply Point ALP

ALP for EUC NW:E0908W04

0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 2 1 51 101 151 201 251 301 351

  • Right: a highly

weather- sensitive Larger Supply Point ALP

I&C usage – decreases at weekends

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xoserve System Context

Demand Estimation System

NDM Sample daily read data

Gemini UKLink Sites & Meters UKLink Invoicing 95

ALPs and DAFs Energy factors EUC Definitions Aggregate AQ (by Shipper/ EUC/ Exit Zone) DM daily read data DM daily volumes Daily allocation AQ Review Com & Rec Invoices

Before the day After the day

Shipper AQ data LDZ Measurements

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Consultation Responses

GDF Suez Segmenting domestic and commercial sites from End User Category (EUC) band 1 would enable more accurate profiling and billing. Such sites could be identified using the existing I/D marker in sites and meters database and maintained via the shipper nomination process. Create a new EUC band for Small Supply Points. 10.10 Scottish and Southern Energy For demand forecasting and for managing the ability to download up to date historical and forecasting data. Shipper demand allocation data split

  • ut by market

sector (SSP & LSP) and by LDZ

  • n a daily basis.

10.8 EDF Energy Under the current regime all energy consumption data that is available for SSP sites that are classified as I&C is ignored when developing the demand forecasts and allocation profiles. We believe that it would be beneficial to actually use this data and develop an additional SSP profile for I&C sites. This should improve energy allocation within the SSP market and therefore correctly target costs. Use energy consumption data to develop an additional SSP profile for I&C sites 10.7 E.ON UK It would be cost effective to plan for the system to be scalable to this level from the outset to ensure that long term costs are minimised to the industry. This would be in the interests of the wider gas industry and to gas consumers who ultimately would pay the costs of introducing a system that was not appropriately scalable Daily energy allocations for a large part, if not all,

  • f the metering

points 4.6

Source Rationale Requirement Ref

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Allocation – Areas to Consider

Use of data from Smart/Advanced meters

Treatment of missing read days

Equitable treatment of remote/non-remote sites throughout the roll-out Possible scale-down of Demand Estimation as roll-out progresses Possible review of Weather Correction Factor

Does not currently use weather data

Interaction with UNC Sub-Committees

Demand Estimation Sub-Committee Energy Balancing Credit Committee