EU Workgroup – Mod 500

WG(4) – 16th September 2014

Surrender Cash Flows

2

CMP cash flows forSurrender & LT UIOLI - Proposal

Surrendered and LT UIOLI offered in an auction will have their own quantity holders in the Gemini system.

This means revenue received from Surrenders/LT UIOLI can be identified and treated separately from standard baseline or incremental revenue sales.

Same principles applied to CMP surrender and LT UIOLI as are applied to TnT.

Costs/Revenues will not be counted in National Grid’s SO or TO actual or maximum allowed revenue.

Also will not be included in Constraint Mgt Incentive.

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CMP cash flows forSurrender & LT UIOLI - Proposal

Debit paid by a User will be a relevant revenue to capacity neutrality.

Credit received by a User will be a relevant cost for capacity neutrality.

User Debit ≥ User credit zero impact or net revenue to neutrality.

Any net revenue will be redistributed to community via neutrality mechanism.

This means net revenue from an Exit transaction will be redistributed through neutrality (based on entry holdings).

NG will always be cost/revenue neutral.

NG will monitor Exit costs/revenues going through neutrality.4

Surrender Price

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Slide presented to WG(1)

Allocate bundled results first:

Unsold > Surrenders > LT UIOLI > Oversubscription

Then allocate unbundled results:

Remaining unsold > remaining surrenders > remaining LT UIOLI > remaining oversubscription

This way all unsold must be used before re-allocating surrenders; all surrenders before LT UIOLI; and all LT UIOLI before non-ob.

unsold Surrender LT UIOLI Non-Ob

U S L O

Auction results come back from PRISMA.

- Bundled bid demand

- Unbundled bid demand

For 1:2 situations

There are 2 possible clearing prices for the bundled auctions.

This means that, if the Surrender is re-allocated to meet demand from a bundled auction, there are 2 possible prices that can be credited to the surrendering shipper,.

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unsold Surrender LT UIOLI Non-Ob

U S L O

- Bundled bid demand – bundled auction A (5p)

- Bundled bid demand – bundled auction B (3p)

Surrender - minimum quantities

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Minimum Surrenders – PRISMA feedback Fundamental functional changes

New ‘conditionally available’ type of auction and process for handling the surrenders would have to be developed.

Enhanced Surrender functionality (and possibility of PRISMA storing Surrender data).

Auction publishing would be amended

Process would need a lot of multi-lateral discussion e.g. Impact on adjacent TSO if Available capacity dropped.

Would auctions be re-run without conditional amount, if the minimum amount is not met. Could impact timetable for auctions.

Long term auction could jump from undersell back to oversell if a Surrender offer dropped out.

Non-competing auctions could move into competition.

Competition tree algorithm is already complex9

LT UIOLI Guidance Document

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LT UIOLI Guidance Document v2.0 draft

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Microsoft Word Document

Contingency

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13

Background - Existing Arrangements

Section U – UK Link

U 6.1.1 b) – Code Contingency is specifically defined as an event or circumstance affecting UK Link.

PRISMA not part of UK Link

Where a Code Contingency continues for a certain period of time then it may be a Class A Contingency

Under Class A Contingency then standard arrangements under TPD may be amended.

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Class A Contingency (existing) - Capacity

Section B 2.16

2.16 a) Where…no capacity allocations of Daily NTS Entry Capacity in respect of a relevant Day are made…the System Entry Overrun Charge payable by Users…will not apply.

2.16 b) and c) relate to Contingency Arrangements for relevant processes (Registration, Surrender, Trading). NG still require system (Gemini) access to enact these arrangements on behalf of shippers.

PRISMA is a web based system so not possible for NG to have system access if other parties do not.

Contingency Arrangements

Wait and See approach initially;

Do not declare contingency unless outage is prolonged.

If Gemini offline, and Code Contingency declared:

NG can manually upload available capacity to PRISMA.

From shipper perspective auctions will continue.

If PRISMA offline:

Long term auctions will be held when system back online.

Short term auctions will recommence when system back online.

Existing Class A Contingency under 2.16 a) to be applied if outage is prolonged.

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Recap

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Summary of Topics covered so far

Long Term Auctions – Ascending Clock (WG1 & 3)

Short Term Auctions – Uniform Price (WG1 &3)

CAM auction products (WG1 & 3)

Joint Booking Platform – PRISMA (WG1 & 3)

1:2 situations & Competition (WG1 & 3)

Available Capacity & Bundling (WG1)

CMP: Surrender (WG1 & 3)

CMP: LT UIOLI (WG1)

Transfers (WG1 & 3))17

Summary of Topics covered so far (2)

Scalebacks & buybacks (WG2)

Voluntary Bundling (WG2)

Transitional Arrangements (WG2)

Mod 3.13 – Further References in UNC (WG2)

Tariff Arrangements – (WG4)

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Summary Changes to UNC Modification Proposal 0500

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section in mod description

2 - Why change removed some of the repetition between sections 1 and 2

3.1 - New Terms deleted part of definiton relating to unbundled capacity

3.1 - New Terms definition of NTS IP Capacity simplified

3.1 - New Terms definition of unbundled capacity changed to '…not bundled'

3.1 - New Terms revised definition of Large Price Steps and Small Price Steps.

3.1 - New Terms added definition for 'Oversell'

3.2 - General added rules on with-holding Technical Capacity

3.2 - General sharing factor will not be stated in UNC (except for default rule)

3.2 - General conversion from kWh/d to kWh/h shall be 1/24th for all auctions

3.3.8 - Ascending Clock added volume bid rules following First Time Undersell

3.3 - Ascending Clock extra information about setting Price Step removed, not required in UNC.

3.3 - Competing Auctions Section largely redrafted to add clarity to process

3.3.24 - Ascending Clock added rule on auction time out

3.4.3 - Uniform Price Algorithm added rule on automatic roll forward of bids for day ahead auction

3.4.5 - Uniform Price Algorithm added rule on minimum bid price

3.4.13 - Uniform Price Algorithm paragraphs 13) and 14) amalgamated

3.4.15 - Uniform Price Algorithm amended to cover scenario where some available capacity remains, but can't be allocated as doesn't meet min quantities

3.4.1.6 - Day Ahead IP Auction added rule on automatic roll forward of bids

3.5 - Surrender deleted 'next' for Annual Quarterly and Rolling Monthly auctions

3.5 - Surrender added wording to allow NG to process Surrender in event that adjacent TSO does not use PRISMA process

3.5 - Surrender extended negative entitlement check

3.5 - Surrender allocation is bundled first; unbundled second

3.5.12 - Surrender added rule about supremacy of gemini data

3.7 - Scaleback clarified that last in is first out in event of scaleback

various min bid quantity for kWh/h added to Asending Clock, Uniform Price and Surrenders. (100,000/24 = 4,167)