EU Workgroup – Mod 500

Action 703 – confirm current capacity surrender process

Rolling Monthly Surrender process

criteria RMTnTSEC Surrender Compared to CAM-CMP Surrender

Min surrender price Min surrender price is part of bid submission

No min surrender price submitted

Max number of offers 2 10

Entitlement check Yes Yes

Re-allocation priority Min surrender price;Surrender before Unsold

Surrender timestamp;Unsold before Surrender

Credit received by User Price of the bid the surrender was used to allocate

Clearing price of auction

Unused surrender quantity

Returned to User Returned to User

Auction(s) Rolling Monthly only Annual, Quarterly & RM

2Note: a minimum surrender re-allocation quantity is not specified under the existing Surrender process

CAM-CMP surrender offers

No min reallocation quantity for CAM surrender offers

Surrender offers must be offered unconditionally to shippers via PRISMA

Consistent approach with other TSOs

In line with precedent under TnT Surrenders

No min surrender price for CAM surrender offers

Main purpose of economically ordering Surrenders for re-allocation is now redundant (CMP mandates timestamp)

Shippers still guaranteed to get at least reserve price (over last 12 months no shipper has submitted a min surrender price above the reserve price of the auction)

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EU Workgroup – mod 500

Units – kWh/h & kWh/d

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kWh/day and kWh/hour - Proposal NG currently sells all capacity in kWh/d

IUK & BBL sell capacity in kWh/h. Irish sell capacity in kWh/d.

How is a bundled product marketed?

kWh/h or kWh/d (CAM allows both)

A pragmatic option would be for NG/Adjacent TSO to offer capacity in kWh/h at the Bacton IPs.

Maintain kWh/d at Moffat.

NG would convert Available Capacity (and corresponding price) from kWh/d to kWh/h for marketing on PRISMA. PRISMA uses kWh/h.

Example conversions

NG Obligation

NG available capacity: 240 kWh/day

Conversion: 240 kWh/d 10 kWh/h

Marketed on PRISMA as 10 kWh/h/runtime

Shipper perspective

For all auctions, except within day, the daily right will be the capacity purchased (in kWh/h) x 24.

For within day auctions, the daily right will be the capacity purchased (in kWh/h) x remaining hrs in the day.

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Implication - Reducing Within Day Obligation

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10

10

240

kWh/h

kWh/h

kWh/d

10

10 kWh/h offered for a whole day equates to an offer of 240 kWh/d.

10 kWh/h offered for the remaining half of a day equates to an offer of 120 kWh/d.

This effectively means the capacity offered, as measured in kWh/d, reduces as the day progresses.

2412 186

2412 186

hrs

hrs

hrs2412 186

Alternative – Increasing kWh/h obligation

To have a flat within day obligation (as measured in kWh/d) NG would have to ramp up the amount offered in kWh/h e.g. for 240 kWh/d obligation:

For 24hrs remaining then 10 kWh/h offered

For 6hrs remaining then 40 kWh/h offered

For 1 hr remaining then 240 kWh/h offered

However other TSO operating in kWh/h do not do this.

So assuming a matching technical capacity of 240 kWh/d on either side of the IP.

For the last hour of the day - 10 kWh/h would be offered bundled; the remaining 230 kWh/h would be unbundled

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NG view – Bacton IPs only

Proposal - the daily obligation is converted into an hourly obligation by dividing by 24. The hourly obligation remains constant throughout the within day auctions

From a technical view point, a reducing within day obligation makes sense as it matches the physical capability of the pipeline

It would be a consistent approach with adjacent TSOs operating in kWh/h & avoids large amounts of unbundled capacity being offered

PRISMA has a within day functionality that TSOs can use; this assumes a flat hourly offering of capacity.

Overruns continue to be measured at a daily granularity. NG still has the ability to release non-obligated capacity

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