Code Modification Forum. Clayton Hotel, Cork Wednesday, 13 June 2018

Transcription

1 Code Modification Forum Clayton Hotel, Cork Wednesday, 13 June 2018

2 Agenda (1 of 2) 1. Review of minutes from last meeting 2. Review of Action Items from last meeting 3. GNI Scheduled Maintenance Update 4. Biogas/CNG Update 5. Intra-day Nomination Patterns and Profiles / Cod Mod Proposal A086-Incentives for Intra-day Balancing 6. Code Modification Proposal A087- Implementing a new framework for Suppliers to contract their payment channels for PPM customers 7. Code Modification Proposal A090- Proposed new Invoice Dispute Procedure 2

3 Agenda (2 of 3) 8. Code Modification Proposal A092- Adjustment of Daily Shipper Imbalance Charges 9. Code Modification Proposal A094 Changes to Shipper Portfolio Tolerances 10. Update on GNI participation on EBI Trading Platform 11. Modification Rules for IBP 15 Terms 12. Gas /Electricity Interaction interaction 13. Brexit and ROI Gas Market 14. Transparency Data Update 15. AOB Next Code Modification Forum Meeting 3

4 4 1. Review of minutes from last meeting

5 5 2. Review of Action Items from last meeting

6 Code Modification Forum Open Actions (Slide 1 of 2) ID Action Responsibility Status Priority C538 Transporter to continue consultation process surrounding intra-day nomination patterns and profiles Transporter Open High C559 Transporter to circulate to the CMF Mailing List a work document in relation to Website Transporter Open High C560 Transporter to draft and circulate and circulate to Industry worked examples on capacity charging Transporter Propose to close High C561 Transporter to issue a Code Modification Proposal to obtain approval of amendments to Cade of Operations enabling GNI trade on a Gas Trading Platform. Subsequently, the Transporter will arrange a telco with Industry and CRU, 7 days after issuing Code Modification Proposal Transporter Propose to close High 6

7 Code Modification Forum 3. GNI Scheduled Maintenance Update 7

8 Network Maintenance Update 1. Upstream Operator Maintenance GNI have been advised of the following scheduled Maintenance Upstream of Entry Points: Location Nature of Works Planned Timings (Subject to change) Duration (days) Entry/Exit Points Affected Impact on flows at entry/exit points affected NOTHING TO REPORT 8

9 2017/ 2018 GNI Proposed Maintenance Days Maintenance Programme Gas Year 2017/2018 Date 7th Feb 2018 Duration Entry Points 1 day Corrib Not required 1 day Inch Not required Commentary 31 May-1June 9 May 4th Jul th Sep day Corrib SCADA signal validation testing. Now postponed due to deferment of SEPIL transition date 1 day Inch Odorant tank refill at Inch. 1 day Corrib 1 day Inch Not scoped yet 1 day Corrib Not scoped yet 1 day Inch Not scoped yet Fuel gas skid connection at Cappagh South. May not affect flow. Now postponed, was scheduled to tie-in with maintenance which is now deferred 9 Note: Dates and maintenance programme may be subject to change

10 2018/ 2019 Maintenance Days Maintenance Programme Gas Year 2018/2019 Date Duration Entry Points Commentary 8th November Inch Deferred in line inspection. Risk to flow during intelligent pigging run 7th March Bellanaboy Station testing, valve check and validations at Cappagh South. 9th May Inch Odourant injection system planned maintenance 4th Jul Moffat Station testing, valve checks and validations at Beattock and Brighouse Bay compressor station 12th Sep Bellanaboy ESD testing at the Corrib Terminal 10

11 IT Maintenance Update Nature of Works Planned Timings (Subject to change) Duration (days) Systems Affected Nothing to report Please note the above works/timings/duration are subject to change 11

12 Code Modification Forum 4. Biogas/CNG Update 12

13 The Causeway Project Reducing emissions and increasing renewables.

14 14

15 Learn more at 15

16 Cush RNG Injection Project Code Modification Forum Update 13 June 2018

17 Agenda Biomethane Potential in Ireland The Cush RNG Injection Project Production site Injection site Legal, Safety, Regulatory & Market Development Next Steps 17

18 Biomethane Potential in Ireland

19 Policy Background Ireland s renewable energy sources (RES) target is 16% RES by Ireland s Greenhouse Gas (GHG) emissions target is 20% less CO 2 by 2020 relative to Road and rail transport contributes ~ 29% of non-ets GHG emissions. Agriculture contributes ~ 46% non-ets GHG emissions. Fig.1 EPA non-ets GHG emissions forecast for 2020 Ireland is set to miss both RES and GHG 2020 targets. 19

20 Renewable Gas Potential in Ireland The Member States with the largest potential growth of biogas production between 2014 and 2030 are Ireland and Romania, (European Commission Report 1 ). 1 Kampman et al Optimal use of biogas from waste streams; An assessment of the potential of biogas from digestion in the EU beyond Available at: 20

21 Biogas Potential in Ireland Assessment of Costs and Benefits of Biogas and Biomethane; 28% of 2015 natural gas demand can be supplied from biogas. Additional grass is the largest bio-resource in Ireland (35 PJ). Levelised Cost Of Energy (LCOE) biomethane range ( /MWh) depending on feedstock, scale and discount rate. 21 SEAI, Assessment of Costs and Benefits of Biogas and Biomethane. Available at:

22 Gas Networks Ireland s Vision for Renewable Gas Reduce carbon footprint of network through development of Renewable Gas. 20% renewable gas on network by % renewable gas will deliver; 2 million tonnes less CO 2 p.a. 7.4% of Ireland s Final Energy Consumption. 200 million euro p.a. avoided energy imports. GNI, Network Development Plan Available at 22 Development-Plan-2017.pdf

23 Cush RNG Injection Project

24 Gas to Grid Project Process Overview Biogas Production Biogas Pretreatment Biogas Quality Monitoring No Meets Biogas Quality Requirements? Yes Location: Existing AD facility at Gorteen Lower, Nurney, Co. Kildare Pressure Reduction Station Biomethane Flare Biogas Upgrading Process No 24 Meets Biogas Quality Requirements? No Yes Biomethane Compressor & Dispenser Biomethane Network Entry Facility Meets Natural Gas Quality Specification? Yes Natural Gas Distribution Network Location: Cush Biomethane Network Entry Facility

25 Production Site

26 Biomethane Production AD Site; Green Generation, Nurney, Co. Kildare EPA licence to take in 25,000 t/annum of biodegradable waste plus 25,000 t/annum of pig slurry from farm Biogas Pre-treatment Process O 2 dosing control system Additional activated carbon to control VOCs Biogas Upgrading Process Oxygen < 1% Moisture 60 0 C at 4 bar Methane concentration > 98% Compressor Station & Disperser Transportation Trailers - ADR compliant 26

27 Injection Site

28 Cush Injection Site The Network Entry Facility will contain; Propane Injection System Non-Fiscal & Fiscal Flow Meters Pressure & Temperature Sensors Gas Analysers (C6 GC + sensors) Diverter Valves 28 Pressure Regulators Odorant Injection System

29 Biomethane Network Entry Facility GNI will own the following assets; Remote Operated Valve. Remote Telemetry Unit. Connecting pipe to the network Delivery Facility Operator will own and operate other assets within the Biomethane Network Entry Facility Image curtesy of Thyson Technology UK 29

30 Legal, Safety, Regulatory and Market Development

31 Key GNI Deliverables Contracts Connected Systems Agreement Connection Agreement Property Arrangements Code of Operations Modifications General Oxygen Content Tariffs Interim Enduring Staff Training Safety Measurement Risk Assessment Safety Integrity Level Assessment Layer of Protection Analysis Impact Evaluation & Risk Assessment Material Change Notice Technical Specification Document Local Operating Procedures Communications Plan Deployment & Commissioning Plan Systemisation 31

32 Key GNI Deliverables cont d Code Modification Proposal A091: Modification of oxygen content limit for biomethane Proposal: Increase the current oxygen limit of 0.2mol% to 1mol% Applicable to biomethane entry points and to exit points only All other gas specification parameters will apply at these points Relevant entry points will be subject to continuous monitoring of both dew point and oxygen content Rationale: Some biomethane sources will not be able to meet the current oxygen limit 32 Benefits Modification will enable biomethane producers to meet GNI s quality specifications Biomethane production is to be encouraged as it supports, inter alia, the reduction of carbon footprint of the gas network and the reduction of carbon emissions, thereby helping to future proof the gas network in Ireland

33 Key GNI Deliverables cont d Code Modification Proposal A093: RNG Outline Code Modification Proposal: To amend the Code of Operations to provide for biomethane entry points on GNI s network Examples: Part A Definitions: e.g. Delivery Facility Operator, Renewable Gas Part E Balancing & Shrinkage: e.g. update formula to include biomethane Part H Operations: e.g. introduction of RG Entry Points, allowing for their connection to Transmission and Distribution Systems Benefits Enable compliant introduction of biomethane into GNI s system Support the promotion of renewable gas industry in ROI 33

34 Gas Networks Ireland s Safety Approach Design review of Biomethane Network Entry. GNI Impact Evaluation and Risk Assessment review. Measurement Risk Assessment examined gas quality risks following UK GQ8 methodology. Safety Integrity Level (SIL) assessment carried out on 5 key instrumentation loops. Layer of Protection Analysis (LOPA) on odourisation equipment. Hazop study conducted by DFO examined all process risks both upstream and within the injection point. Material Change Notice to be issued to Regulator. 34

35 Next Steps

36 Shipper Activities Biomethane Producer / Shipper Agreement Shipper Safety Case Shippers must be licenced to ship RNG CRU currently reviewing Safety Case guidelines Will be circulated for consultation Shipper Registration at Entry Point Shipper Engagement with Green Gas Certification Scheme Other Shipper relevant support schemes / initiatives TBD 36

37 Green Gas Certification Scheme for Ireland 37

38 Centralised Grid Injection Supporting Agricultural AD 1 Sustainable Agricultural Resources 2 On-farm and off-farm Anaerobic Digestion (AD) Biogas Produced Centralised Grid Injection Increase access to the gas network Farmer & community owned ADs High capacity Gas Entry Hub Gas processing and transport 3 Renewable Gas Large catchment area 5 Renewable Gas available for Industry, Residential, and Transport Markets 4 Gas Entry Hub Renewable Gas Injection 38

39 Summary Ireland has: Abundant resources for biomethane production. Large demand from industry. Proactive gas network operator. Ireland needs: Government policy support for biomethane. Appropriate regulatory processes. Affordable interest rates for developers. 39

40 Code Modification Forum 5. Intra-day Nomination Patterns and Profiles /Code Mod Proposal A086 Incentives for intra-day Balancing 40

41 Outline of proposed GNI Modification A086 Modification Raised by GNI to address concerns that the aggregate system imbalance intra-day is creating operational difficulties. At times, there are large deviations between the prevailing exit nominations on the system and the prevailing entry nominations. GNI wish to introduce an incentive to encourage more alignment of entry and exit PROPOSAL: At check points during the gas day (11:00, 17:00, 23:00) a shippers portfolio Nomination Imbalance position will be recorded. A tolerance will be applied at each point Worked Example: A shipper has 24 units of Aggregate Exit Nomination at 11:00. Deemed flow at Exit = (24 units * 6hrs/24hrs) = 6 units Total Entry Nomination = 4 units Apply a [5%] tolerance: Adjusted Nomination Imbalance Position Nomination Imbalance Position = (6 * 90 %) 4 = 1.4 units 41 The Adjusted Nomination Imbalance Position at the 3 time checks will be added The total for the day will be multiplied by [SAP] * [x%] The amounts for each day in a month will be invoiced at month end.

42 Impact if Code Mod was applied in November 2017 April 2018 There was a marked improvement in Shipper Nominations following discussions of the proposed modification at recent code mod forums. The estimated monthly financial impact dropped from 334k (November) to 67k (January). However, during February, March and April late day nominations have resulted in almost hourly batches late in the gas day, causing operational difficulties once again for both GNI and National Grid. Grid control, have recently, had to undertake aggressive selling actions to compensate for imbalances on the system. The financial Impact to Shippers in April, if the Code Mod was applied, has increased by 293% compared with January

43 Impact if Code Mod was applied in November 2017 April

44 Impact if Code Mod was applied in November 2017 April Intraday Imbalance Nov April NOVEMBER, 334, APRIL, 264, MARCH, 252, DECEMBER, 161, Total FEBRUARY, 115, JANUARY, 67, NOVEMBER DECEMBER JANUARY FEBRUARY MARCH APRIL

45 Impact if Code Mod was applied in November 2017 March 2018 Assume 5% Exit Tolerance and charging of 5% of SAP November shippers would have received charges ranging from 365 to 148k Total charges: 334k 92% of charges attributable to 3 shippers December shippers would have received charges ranging from 17 to 124k Total charges: 162k 96% of charges attributable to the same 3 shippers January shippers would have received charges ranging from 18 to 30k Total charges: 67k 96% of charges attributable to 3 shippers 45

46 Impact if Code Mod was applied in November 2017 March 2018 February shippers would have received charges ranging from to 72k Total charges: 116k 93% of charges attributable to 3 shippers March Shippers would have received charges ranging from 86 to 149k Total charges: 252k 96% of charges attributable to 3 shippers April Shippers would have received charges ranging from 23k to 114k Total charges: 264k 91% of charges attributable to 4 shippers 46

47 Code Modification Forum 6. Code Modification Proposal A087-Implementing a new framework for Suppliers to contract their own payment channels for PPM customers 47

48 Code Mod 87 Front Office PAYG Contracts Recap of Code Modification: Raised by GNI, this modification seeks to revise the provisions in the Code of Operations related to Prepayment Metering so that Suppliers contract their own payment channels for gas prepayment meter customers rather than be required to be a party to a Front Office Services agreement agreed by the Transporter with third party service providers. Status of Code Modification: This code modification is fundamentally a retail issue and it has been agreed that it should be further discussed at the retail (GMARG) forum 48

49 Code Modification Forum 7. Code Modification Proposal A090 Proposal from BGE for New Invoice Dispute Resolution Procedure 49

50 Code Modification Forum 8.Code Modification Proposal A092- Adjustment of Daily Imbalance Charges 50

51 8. Code Modification Proposal A092- Adjustment of Daily Imbalance Charges 1 st June marked the commencement of GNI s participation in the Irish balancing point (IBP) trading platform operated by EBI. As trading at the Irish Balancing Point ( IBP ) develops GNI intends to begin using the IBP traded prices as the basis for cashing out Shipper imbalances under the Code of Operations. The relevant Articles of the BAL NC are Art. 22 and Art. 23. GNI will publish First Tier and Second Tier Cash-out Prices on 21 st of each month until October 1 st. From October 1 st, First Tier and Second Tier Cash-out Prices will be published Daily. Following the most recent Code Mod Forum (2 nd May) GNI circulated: Worked examples of Daily Imbalance charges, for Shipper review 51

52 Proposed First Tier Imbalance Cash-out Prices to apply in different scenarios Scenario A. GNI has no balancing (buy or sell) requirements, but there are trades on an IBP Trading Platform First Tier Imbalance Cash-out Buy Price to Apply to Shippers Short Positions First Tier Imbalance Cash-out Sell Price to apply to Shippers Long Positions SAP (IBP) plus 2% differential SAP (IBP) minus 2% B. GNI has no balancing requirements, and there are no trades on an IBP Trading Platform SAP (NBP) plus] 2% differential (Default Rule) SAP (NBP) minus 2% differential (Default Rule) C1. GNI has balancing buy requirements, and it has to utilise the balancing services contract, and other parties trades with each other on an IBP Trading Platform SAP (IBP) plus 2% differential SAP (IBP) minus 2% differential C2. GNI has balancing buy requirements, and has to utilise the balancing services contract, and there are no trades on an IBP Trading Platform SAP (NBP) plus 2% differential (Default Rule) SAP (NBP) minus 2% differential (as per Default Rule - see Section 3.2.8) D1. GNI has balancing sell requirements, and it has to utilise the balancing services contract, and other parties trades with each other on an IBP Trading Platform SAP (IBP) plus 2%differential SAP (IBP) minus 2%differential D2. GNI has balancing sell requirements, and has to utilise the balancing services contract, and there are no trades on an IBP Trading Platform SAP (NBP) plus 2%differential (Default Rule) SAP (NBP) minus 2% differential (Default Rule) E. GNI has balancing buy requirements, and trades these out on an IBP Trading Platform SAP (IBP) plus 2% differential SAP (IBP) minus 2% differential 52 F. GNI has balancing sell requirements, and trades these out on an IBP Trading Platform SAP (IBP) plus 2% differential SAP (IBP) minus 2% differential

53 Proposed Second Tier Imbalance Cash-out Prices to apply in different scenarios Scenario A. GNI has no balancing (buy or sell) requirements, but there are trades on an IBP Trading Platform Second Tier Imbalance Cash-out Buy Price to Apply to Shippers Short Positions SMPbuy (IBP), which is the equivalent of SAP (IBP) + 5% Differential Second Tier Imbalance Cash-out Sell Price to apply to Shippers Long Positions SMPsell (IBP) which is the equivalent of SAP (IBP) - 5% Differential B. GNI has no balancing requirements, and there are no trades on an IBP Trading Platform C1. GNI has balancing buy requirements, and it has to utilise the balancing services contract, and other parties trades with each other on an IBP Trading Platform C2. GNI has balancing buy requirements, and has to utilise the balancing services contract, and there are no trades on an IBP Trading Platform D1. GNI has balancing sell requirements, and it has to utilise the balancing services contract, and other parties trades with each other on an IBP Trading Platform SMP (NBP) plus 5% differential plus Transportation Costs (Default Rule) SMPbuy (IBP) which is the equivalent of SAP (IBP) + 5% Differential SMP (NBP) plus 5% differential plus Transportation Costs (Default Rule) SMP (IBP) which is the equivalent of SAP (IBP) + 5% Differential SMP (NBP) minus 5% differential minus Transportation Costs (Default Rule) SMPsell (IBP) which is the equivalent of SAP (IBP) - 5% Differential SMP (NBP) minus 5% differential minus Transportation Costs (Default Rule) SMP (IBP) which is the equivalent of SAP (IBP) - 5% Differential D2. GNI has balancing sell requirements, and has to utilise the balancing services contract, and there are no trades on an IBP Trading Platform E. GNI has balancing buy requirements, and trades these out on an IBP Trading Platform SMP (NBP) plus 5% differential plus Transportation Costs (Default Rule) IBP Marginal Buy Price Greater of SMPbuy (IBP) and SAP (IBP) plus 5% differential SMP (NBP) minus 5% differential minus Transportation Costs (Default Rule) IBP Marginal Sell Price Lesser of SMPsell (IBP) and SAP (IBP) minus 5% differential IBP Marginal Sell Price 53 F. GNI has balancing sell requirements, and trades these out on an IBP Trading Platform IBP Marginal Buy Price Greater of SMPbuy (IBP) and SAP (IBP) plus 5% differential Lesser of SMPsell (IBP) and SAP (IBP) minus 5% differential

54 Worked Examples of Daily Imbalance Charges : Cash-out Buy Price Scenario 1: For a day there have been a number of trades on the platform. SAP (IBP) has been published as 50 pence/therm GNI has not undertaken any balancing actions on this day Price used on day = SMPbuy (IBP) means SAP(IBP) + 5%: 52.5 pence/therm (converted accordingly into euro for settlement purposes) Max GNI Purchase (pence/therm) SMPbuy (IBP) means SAP (IBP) +5% (pence/therm) SMPbuy NBP (pence/therm) SMPbuy (NBP) +5% (pence/therm) Price used on day (pence/therm) Scenario 2: For a day there have been no trades on the IBP platform. SAP (IBP) has therefore not been published. GNI has not undertaken any balancing actions on this day. Price used on day = SMPbuy (NBP) + 5%: Transportation costs. (converted accordingly into euro for settlement purposes) Max GNI Purchase SMPbuy (IBP) means SAP SMPbuy NBP SMPbuy (NBP) +5% Price used on day (pence/therm) (IBP) +5% (pence/therm) (pence/therm) (pence/therm) (pence/therm) Transportation Costs 54

55 Worked Examples of Daily Imbalance Charges: Cash-out Buy Price Scenario 3: For a day, GNI has utilised the Trading Platform to undertake Balancing Buys SAP (IBP) has been published as 50 pence/therm Price used on day = IBP Marginal Buy Price: 53 pence/therm (converted accordingly into euro for settlement purposes) Max GNI Purchase (pence/therm) SMPbuy (IBP) means SAP (IBP) +5% (pence/therm) SMPbuy NBP (pence/therm) SMPbuy (NBP) +5% (pence/therm) Price used on day (pence/therm) Scenario 4: For a day, GNI has utilised the Trading Platform to undertake Balancing Buys SAP (IBP) has been published as 50 pence/therm Price used on day = IBP Marginal Buy Price: 52.5 pence/therm (converted accordingly into euro for settlement purposes) Max GNI Purchase (pence/therm) SMPbuy (IBP) means SAP (IBP) +5% (pence/therm) SMPbuy NBP (pence/therm) SMPbuy (NBP) +5% (pence/therm) Price used on day (pence/therm)

56 Worked Examples of Daily Imbalance Charges: Cash-out Sell Price Scenario 1: For a day there have been 5 trades on the platform. SAP (IBP) has been published as 50 pence/therm GNI has not undertaken any balancing actions on this day Price used on day = SMPsell (IBP) means SAP(IBP) - 5%: 47.5 pence/therm (converted accordingly into euro for settlement purposes) SMPsell (IBP) means SAP SMPsell (NBP) SMPsell (NBP) - 5% Price used on day Min GNI Sale (pence/therm) (IBP) - 5% (pence/therm) (pence/therm) (pence/therm) (pence/therm) Scenario 2: For a day there have been no trades on the platform. SAP (IBP) has not been published. GNI has not undertaken any balancing actions on this day. Price used on day = SMP Sell (NBP) - 5%: 51.3 pence/term (converted accordingly into euro for settlement purposes) Min GNI Sale (pence/therm) SMPsell (IBP) means SAP (IBP) - 5% (pence/therm) SMPsell (NBP) (pence/therm) SMPsell (NBP) - 5% (pence/therm) Price used on day (pence/therm)

57 Worked Examples of Daily Imbalance Charges: Cash-out Sell Price Scenario 3: For a day, GNI has utilised the Trading Platform to undertake Balancing Sells SAP (IBP) has been published as 50 (pence/therm) Price used on day = IBP Marginal Sell Price: 47.5 (pence/therm) (converted accordingly into euro for settlement purposes) SMPsell (IBP) means SAP SMPsell (NBP) SMPsell (NBP) - 5% Price used on day Min GNI Sale (pence/therm) (IBP) - 5% (pence/therm) (pence/therm) (pence/therm) (pence/therm) Scenario 4: For a day, GNI has utilised the Trading Platform to undertake Balancing Sells SAP (IBP) has been published as 50 (pence/therm) Price used on day = Lowest GNI Sell Price: 46 (pence/therm) (converted accordingly into euro for settlement purposes) Min GNI Sale (pence/therm) SMPsell (IBP) means SAP (IBP) - 5% (pence/therm) SMPsell (NBP) (pence/therm) SMPsell (NBP) - 5% (pence/therm) Price used on day (pence/therm)

58 Responses from Industry Concern at liquidity of EBI platform The fact that conditional terms for using the NBP have to be included as scenarios, suggests that there are doubts over the platform s maturity and readiness for imbalance price setting. Consider using average of 7 previous days SAP if no trades occur as in GB (caveated by sufficient IBP liquidity) Concern that any trade by the TSO, i.e. any one single trading action, could skew the imbalance price. Inexperience of GNI in conducting balancing trades Evidence in general of low volume of trades, some of which appear to be test trades Trades at prices which could be seen as experimental REMIT Article 2(2) concerns transactions which give false or misleading signals, or price at an artificial level No suggestion of wilful market manipulation but in setting a reference price this should be considered 58

59 Responses from Industry Use of NBP SMP is incorrect Pancaking of the +/- 5% small adjustment onto the highest/lowest NGG balancing action price or NBP SAP +/- adjustment Points out an error in examples 3 and 4 of the SMPsell(NBP) table Values are higher rather than lower than the SMPsell NBP (corrected in earlier slide) Concerns over the speed of introduction, lack of consultation and transparency, and short timeline to implementation. The five years of interim measures ends in April 2019, so there is more time that can be used to introduce change in a more measured way, including monitoring and review, affording counterparties time to set up contractual trading arrangements, and allowing GNI to gain learning from use of the trading platform. 59

60 9. Code Modification A094- Changes to Shipper Portfolio Tolerances Reasons for Code Modification ; 1. Compliance with Art.50.1 of Commission Regulation(EU)No.312/2014 where appliance of tolerances is prohibited where Shippers do not have access to ; A short-term wholesale gas market that has sufficient liquidity Gas required to meet short term fluctuations in gas supply Sufficient information regarding their inputs and off-takes 2. Removal of tolerances will incentivise Shippers to reduce portfolio imbalances and will as a result increase trading platform liquidity 60

61 Next Steps - Tolerances The BAL NC envisages the removal of tolerance Interim measures allows the retention until 2019 GNI believes, following recent consultation, that it is now time to move towards removal The table below outlines a 2 step approach to removal of tolerances at LDM, DM. Corrib and Inch Entry point Tolerances proposed to move to 0.75% on the 1 st of August 2018 and 0% on the 1 st of October 2018 Sector/Size(Annual Quantity) LDM >1,500,000,000 kwh (LDM 1) LDM > 260,000,000 to 1,500,000,000 kwh (LDM 2) LDM >57,500,000 to 260,000,000 kwh (LDM 3) Exit Tolerance % - Proposed % 01 August Proposed % 01 October CURRENT DM 30 of DM Exit Allocations 15 0 NDM 2.5 of NDM Exit Allocations Inch Storage Exit Point IP CSEP Non OBA Day IP CSEP OBA Day Sub-Sea I/C > ,500,000,000 kwh Sub-Sea I/C > ,000,000 to 1,500,000,000 kwh Sub-Sea I/C <

62 Code Modifications - Live Number A Title of Proposal Proposer Status A085 Profiling of Gas Flows at Entry Points IOOA Live A086 Intra-day Nomination Incentive Proposal GNI Not yet issued A087 New Framework for Suppliers in PPM Market GNI Live A090 Proposed new Invoice Dispute Resolution Procedure BGES Live A091 A092 Modification of oxygen content limits for Renewable Natural Gas (RNG) injected from RNG Entry Points Trading Platform participation and adjustment of Daily Imbalance Charges A093 RNG Outline Code Modification GNI Live A094 Changes to Shipper Portfolio Tolerances GNI Live GNI GNI Live Live 62

63 Responses from Industry The 3 conditions of Art have not been met (a) Access to a market that has sufficient liquidity Spot IBP needs more time to develop Few trades, partly attributable to low number of commercial agreements in place between counterparties. (b) Access to gas when required to meet short-term fluctuations Problematic at the end of the Gas Day NBP can be accessed until 00:30 and IBP until 02:00 Dead band from 02:00 to 05:00 when sourcing gas becomes an issue Under I-SEM materiality could grow 63

64 Responses from Industry (c) Access to sufficient information regarding inputs and off-takes Power stations are not in control of their gas offtakes, as they are dispatched by Eirgrid in real time, given indicatives as to the gas take. NDM allocations are only finalised after the trading day ends. Impact of I-SEM and DS3 unknown and unquantifiable Support greater co-operation between gas and electricity sectors Very disappointed to hear views expressed at the code modification forum that the problem lay solely in the power sector NDM and DM figures are published Trading D+1, final allocations at D+4 We do not think our concerns about balancing NDM positions were given due consideration at the meeting or in the process 64

65 Responses from Industry The removal of First Tier imbalance volumes is in fact a shift from two levels of imbalance charging to one level for all but NDM volumes. A transition is appropriate and also an assessment, with evidence, of what the correct level of small adjustment is to incentivise participants adequately. 3.5% as an initial level for the small adjustment (i.e. between 2% and 5%) would be appropriate to be tried and monitored. We are concerned that 2%, 5%, 10% and 25% have been in play for imbalance charging recently without evidence basis, and that consultation questions previously issued about the level of small adjustment were selective in their individual scope. 65

66 Code Modification Forum 10. Update on GNI participation on EBI Trading Platform 66

67 11.Modification rules for IBP 15 Terms Two subsequent versions since original 2015 version April 2018 and May Modification Rules for future amendments Through the CMF process? Draft Rules? 67

68 Code Modification Forum 12. Gas / Electricity Interaction 68

69 Code Modification Forum 13. BrExit and ROI Gas Market 69

70 Code Modification Forum 14. Transparency Data Update 70

71 AOB

72 1. Upcoming Code Modification Forum Meetings CMF Dates 2018 Location 7 th March 2018 (Wednesday) Cork 2 nd May 2018 (Wednesday) Dublin 13 th June 2018 (Wednesday) Cork Next Meeting 8 th August 2018 (Wednesday) Dublin 26th September 2018 (Wednesday) 28 th November 2018 (Wednesday) Cork Dublin 72

73 Thank you for your participation