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NTS shrinkage

As shrinkage provider we are responsible for managing the end-to-end service of forecasting, accounting for, procuring, and supplying energy to satisfy the daily NTS shrinkage components.

NTS shrinkage energy (gas and electricity) is bought by the gas transmission system operator. NTS shrinkage is procured for three components:

  • Compressor Fuel Usage is the energy used to run compressors to manage pressures within the gas transmission system. This can either be gas or electricity, depending on the power source for the specific compressor.

  • Calorific Value Shrinkage is gas which cannot be billed due to application of the Gas (Calculation of Thermal Energy) Regulations 1996 (amended 1997).

  • Unaccounted for Gas is the remaining quantity of gas which is unallocated after taking into account all measured inputs and outputs from the system.

Data on the volumes we have procured for NTS shrinkage can be found under NTS Procurement in the Data Item Explorer.
 

The scheme

reputational incentive scheme is currently in place for NTS Shrinkage from 01 April 2021 until 31 March 2026. Under the scheme, gas procurement costs are reported and compared to benchmark costs, which are based on forecast and actual volumes and market prices. The way the benchmark costs are calculated is set out in the Gas Volumes Methodology

 

Operational performance

NTS Shrinkage costs are driven by outturn volumes of shrinkage and market prices.Over the RIIO-1 price control period, annual system costs were approximately £67m to £82m.

Energy is procured through a trading strategy based upon a mixture of forward and prompt procurement to spread price risk.

 

Gas Volumes Methodology