National Grid NTS, along with industry stakeholders, started a review of the Capacity Access Regime in October 2019. This review aims to make processes simpler and explore different ways to access the existing capability of the network, by reviewing the way capacity is made available.
The current entry and exit capacity arrangements for users to access the NTS were built on the foundations of an expanding gas transmission network. Historically, incremental capacity signals from long-term auctions would trigger investment on the NTS. Today, this environment has changed and we’re not experiencing the capacity signals requiring expansion of the network that we were 10 years ago.
It’s likely that we will see further changes within the next 10 years, with the potential introduction of new technologies and new sources of gas to the network such as Hydrogen. With this change in NTS use, and the needs and behaviours of its users, there is requirement for a holistic review of the current capacity access regime, to ensure it can deliver on the needs of our customers and National Grid as TSO, both today and in the future. At the October 2019 UNC Modification Panel, it was unanimously decided to send Capacity Access Review UNC 0705R to Transmission Workgroup.
Following an industry consultation we have been working through a list of short-term issues. These have been grouped in to work-streams and include:
Signalling and Allocation of Capacity
Changes developed through this workstream have been implemented through the review of the capacity methodology statements. Changes include:
the reduction in User commitment for Exit capacity within baseline from 4 years to 2 years
reduction of User commitment for Entry incremental capacity from 16 to 4 quarters of the capacity application amount, with those 4 quarters being the incremental amount (maintaining the NPV test requirements for funded incremental capacity)
prioritisation of capacity at disconnected sites in our substitution analysis
capacity indicated as required through the demand forecasts provided via Exit Capacity Planning processes is not to be considered Substitutable Capacity.
Further changes in this area are being discussed with the industry and include:
reduction of user commitment for incremental capacity where the signal is fulfilled by substitution
movement of capacity between offtakes – a process that would allow Users to transfer capacity between Exit points.
Capacity Products and Auctions
This workstream has been focusing on the development of the within day Entry and Exit products to enable Users greater access and flexibility to purchase NTS Capacity. This has resulted in raising UNC Modification 0759S ‘Enhancements to NTS Within-day Firm Entry and Exit Capacity Allocations’, which is awaiting implementation subject to system changes being completed.
Secondary Capacity Assignments
Following feedback from the Industry, through this work stream we have developed and raised UNC Modifications 0779 ‘Introduction of Entry Capacity Assignments’ and 0755 ‘Enhancement of Exit Capacity Assignments’ to enable Users to transfer entry and exit capacity, and the associated liabilities, in full or in part at an Entry/Exit point. UNC Modification 0755 is awaiting implementation subject to system changes being completed, while 0779 is being considered by the Workgroup.
Review of the Exit Regime
As part of RIIO2, a new Licence condition was introduced that requires Gas Transporters to comply with the Exit Capacity Planning Guidance (ECPG). The ECPG provides a framework for processes and activities, to ensure efficient capacity bookings are made that benefits the gas transportation network as a whole. In light of this, we are looking at various aspects of the Exit capacity regime, including User Commitment, substitution, PARCA process and ensuring the network as a whole can be accessed efficiently.
Following the implementation of UNC Modification 0716 ‘Revision of the Overrun Charge Multiplier’ on 1st October 2020, we have been reporting monthly on the level of Entry and Exit overruns that are occurring. This information is available for each month’s Transmission Workgroup meetings and available on the Joint Office webpage.
2030 Access Regime
This workstream is working closely with the Gas Markets Plan (GMaP). We have been working with members of the GMaP Balancing and Capacity Working Group to develop a scenario that outlines the expected physical and commercial landscape for accessing the NTS by 2030. From this we are building a series of options for a future access regime, which will facilitate the expected changes identified in the scenario. Finally, we are developing a series of triggers to monitor the materialisation of these changes and identify the direction and speed of travel. This will result in a report being published that will outline our findings and seek views and input from the Industry in September 2021.
The Capacity Access Review is discussed regularly at the UNC 0705R Workgroup. Further Industry engagement is regularly conducted via sector specific engagement, bilateral discussions, Gas Industry Forums, Gas Storage Operators Group, Future of Gas Forum and industry webinars, to ensure industry views are fully captured in the development of the future regime.
For full details of the progress made to date, please follow the link to the Joint Office website.
We organise webinars to keep wider industry informed of the progress. Please email us if you would like to be added to the list of participants.
If you would like to engage with us with regards to Capacity Access Review developments, please email us:
Jennifer Randal, Commercial Code Change Manager
Anna Stankiewicz, Commercial Code Change Lead
Dan Hisgett, Commercial Code Change Lead
Laura Johnson, Commercial Code Change Lead
Ash Adams, Commercial Code Change Lead