Constraint management

Constraint management actions

We use a range of system management tools to manage localised requirements as described in the System Management Principles Statement. We will notify users of actions being taken via ANS, where appropriate. Constraint management actions are as follows:

Short-term system flexibility (OPN request)

We will notify users via active notification system (ANS) messages if we believe we may not be able to accommodate requests for short-term system flexibility in one or more exit zone(s). Read more about our short-term system flexibility allocation methodology in this document:

Short-Term System Flexibility Allocation Methodology document

Scalebacks

We may scale back users’ off-peak/interruptible capacity if a constraint is forecast or experienced. Capacity that has been scaled back may be restored if the constraint has been resolved. Read more about the off-peak/interruptible capacity scaleback and restoration process in this document:

Off-Peak NTS Capacity Scaleback and Restoration Process document

Firm capacity surrender (buy-back)

We may ask users for offers to surrender their firm capacity if a constraint is forecast or experienced. Read more about the firm capacity surrender process in this document:

Firm NTS Exit Capacity Surrender Process document

Offtake flow reductions

We may ask users for offers to deliver offtake flow reductions if a constraint is forecast or experienced. An offtake flow reduction is a reduction in flow at an offtake, relative to the prevailing OPN, for part or all of the gas day. Read more about the offtake flow reduction process in this document:

Offtake Flow Reduction Process document

Locational energy actions

We may ask users for offers for locational energy actions if a constraint is forecast or experienced. Read more about the locational energy actions process in this document:

Locational Energy Actions Process document

Operational Guidance Material - Locational Trades

Exit zones

You can view the list of exit zones by downloading this spreadsheet.

Download the Exit Zones document

Incentives

The purpose of the constraint management scheme is to incentivise us to maximise the release of capacity and minimise the costs of constraints against a set financial target;

If we manage the level of constraint costs passed through to consumers below the target, then we receive a revenue from the incentive.
If costs are higher than the incentive target, then a cost is incurred (subject to sharing factors and cap and collar).

A capacity constraint can be broadly described as an event where we are unable to flow gas on or off our network to meet customer flows within the contracted levels of capacity our customers have procured.

We are obligated to release Entry and Exit capacity at around double peak demand. Flows of gas at these levels cannot be physically accommodated concurrently, meaning there is an inherent risk of constraints that must be managed. We manage the risk associated to asset reliability, maintenance and changing flow patterns using rules, tools (physical and commercial) and asset options.

Sales of certain capacity products, such as obligated and non-obligated Entry and Exit Capacity, feed into the incentive as revenue. Therefore, we are incentivised to maximise the sales of capacity, but may be exposed to the costs of capacity buybacks if we sell too much.