There are three distinct processes that need to be completed before new or additional gas can flow out of National Grid’s National Transmission System (NTS):
- The physical connection to the NTS must be completed and commissioned and the measurement equipment must be validated;
- The operational Network Exit Agreement (NExA) detailing the conditions for gas to flow must be signed; and
- Shippers must have obtained sufficient transmission Exit capacity via the relevant mechanisms and have the necessary contractual rights to use that capacity.
1. Physical Connection
National Grid will provide a connection to the NTS using the methodology set out in our publication "National Grid NTS statement of principles and methods to be used to determine charges for National Transmission System connection charges" (Licence Condition 4B Statement)
The ‘Transmission Connection Options’ page outlines the services and equipment that National Grid can provide with regard to the provision of a physical connecting point. Though you may decide not to use all of these services, the details provided will serve as a useful guide to the steps a developer might typically take in carrying out such connection works.
It is also important to draw your attention to the capacity process described in Section 3 below.
2. Network Exit Agreement (NExA)
The Network Exit Agreement (NExA) sets out the technical and operational conditions for the connection point. The NExA is agreed between National Grid and the Facility Operator and/or the Shipper and is normally discussed in parallel with the connection process (see below).
The typical NExA will specify:
- The point of exit (marked on a diagram)
- The plant and equipment, and its ownership
- Responsibilities for maintenance and operational control of equipment
- Arrangements for planned maintenance
- Contractual pressures
- The measurement of flow, volume and calorific value, pressure and temperature
- Emergency procedures
3. Exit Capacity
For all new Exit connections, the Shipper (or potential Shipper) needs to ensure that they have acquired sufficient exit capacity rights to accommodate gas exit flows to the connecting point. The provision of any necessary physical infrastructure reinforcement including any extension, up rating or expansion of the NTS is undertaken by National Grid in accordance with the methodology set out in the Licence Condition 4B Statement.
Please note that if you are not a Shipper yourself you will need to obtain a Shipper licence from Ofgem and accede to the Uniform Network Code (UNC), or to employ the services of a licensed Shipper. Your Shipper can buy capacity on your behalf if you are not a Shipper yourself.
If you would like to obtain a list of licensed Shippers or any further information on the Shipper process, please contact Ofgem: www.ofgem.gov.uk
3.1 Exit Capacity Process
Please note that the provision of a connection does not in itself provide an entitlement to take gas and that sufficient exit capacity needs to be secured. Firm exit capacity normally takes 38 months to build and therefore needs to be considered early on in the planning phase of your project. Interruptible capacity may also be an option. However, this may no longer be available in the longer term depending upon the ongoing exit reform debate.
The mechanism that Shippers use to obtain exit capacity at new (or enhanced) connections is set out in the UNC and National Grid’s Licence Condition 4B Statement and “Interim and Transitional Exit Capacity Release Methodology Statement”. In summary, the exit capacity availability can be requested by either the developer or a Shipper and the request triggers a physical system capability check. In some cases, National Grid may also have to request a licence change for Ofgem to undertake a consultation under section 23 of the Gas Act to modify its Gas Transporter licence in respect of the NTS. If the request is for capacity within 6 months of the proposed date and the capacity can be accommodated without National Grid having to reinforce the system, then the Shipper is able to book the capacity. However, if the system check identifies that the request for exit capacity would trigger specific reinforcement as defined in National Grid's Licence Condition 4B Statement, then a lead time of 38 months from commitment is likely and the developer and/or Shipper may be required to pay for a study, make a capital contribution and/or enter into an ARCA (see below).
Please note that a review of the existing exit capacity regime is in progress and significant changes likely to affect all exit capacity required from October 2011 onwards are expected to result from this. For further information about developments, please see the Ofgem www.ofgem.gov.uk and Joint Office of Gas Transporters www.gasgovernance.com websites.
Advanced Reservation of Capacity Agreement (ARCA)
Where the capacity process identifies that specific reinforcement to the NTS is necessary in order to accommodate exit gas flows, and the additional annual gas requirement is greater than 586,000,000 kWh (20 million therms) p.a., an Advanced Reservation of Capacity Agreement (ARCA) will be required.
An ARCA provides the opportunity for firm exit capacity to be reserved more that 6 months in advance of the proposed first gas date, at which point a Shipper would be able to make a capacity booking, and is normally agreed between National Grid and the developer, but can be agreed with the Shipper. In the event that an ARCA is not required a developer can only obtain exit capacity through its Shipper 6 months before first gas.
For further information on ARCAs please click on the following links:
Getting Connected – Typical Programme of Work
National Grid will enter into contractual discussions for the design and build of the connection facilities. This process will typically take 24 – 36 months from initiation to completion. Please note that this timescale is shorter than the typical timescale for delivering firm exit capacity on the NTS (see above) and thus it is very important that capacity needs are considered from the outset.