Shrinkage Forum 04 June 2013

Roy Malin

2

Best Practice - Areas of Inconsistency

Area Background Action

Definition of All-PE systems

Used to identify networks that are to be classified as ‘All-PE’; the primary use for this is for excluding these networks to report an average system pressure in mixed material networks.

It was agreed that an All-PE network should be defined as a network that contains >95% PE pipe by length. To be updated with next version of leakage model.

MEG Sampling The sampling frequency of MEG concentrations varied between DNs. NGGD and NGN samples monthly, SGN quarterly and WWU do not use MEG.

There are no specific guidelines recommending MEG sampling frequency. No change to current practice.

Customers on NONET Networks

Some DNs allocate un-noded meter points to their NONET Networks, whilst others do not.

It was agreed that the DNs would review the numbers of such customers to determine significance.

Mains Data Extraction Date

NGGD take an extract of mains data on 1 April each year. The other DNs take a later extract, allowing time for the systems to be updated with work completed during the previous year.

It is considered that the leakage extract should reflect the actual mains position at the end of the year. NGGD will adopt an approach consistent with this.

Calorific Value Each element of leakage is estimated in cubic metres of natural gas and it is necessary to convert this into energy. NGGD uses CV data published by National Grid Gas Transmission, whereas the other DNs use data provided by their gas quality team

NGGD will look at adopting a similar approach to the other DNs.

3

Licence Obligations – Shrinkage and Leakage Model

DNs have a Licence obligation to maintain a Shrinkage and

Leakage Model

The inclusion of Shrinkage is a new addition for the RIIO price

control period

Need to expand current model to include Theft of Gas (ToG) and

Own Use Gas (OUG)

Propose that the current ToG and OUG processes are adopted

into the Shrinkage and Leakage Model

Propose that this be done alongside the proposed Low Pressure

Service Model changes

4

Low Pressure Service Model Modification

In February 2012, National Grid published a consultation on a proposed revision to

the Leakage Model in respect of the calculation of leakage from low pressure

services

For leakage estimation purposes, services are split into four categories: Steel

Service to Metallic Main, PE Service to Metallic Main, Steel Service to PE Main and

PE service to PE main.

2002/03 National Leakage Tests established that only service connections to

metallic mains leak

Establish a new ‘baseline’ estimate of the number of services in each of the

categories (using mains replacement data)

Update model to capture the impact on leakage of service transfers (model

previously updated to capture the impact of service relays)

5

Impact of LP Service Model Change

Impact is consistent with that already published for 2013/14 Initial Shrinkage Proposals

Establish a new ‘baseline’ estimate of the number of services

The RIIO Shrinkage and Leakage Baselines based on v1.3 Model

Impact determined by comparing the 2010/11 v1.3 Model output with that from the revised

model for the same year

Impact will be the same for each year of the RIIO Price Control Period

Inclusion of Service Transfers

Average no transfers/km x anticipated mains replacement length x leakage rate

Impact will be cumulative from 2011/12 and over the RIIO Period

Change has no significant impact on incentives for DNs:

Re-baseline to 2010/11 - Baselines and Actual quantities will adjust by the same amount

Service Transfers – Baseline will be adjusted by an amount based on average transfer workload,

whereas Actual quantity will be based actual transfer workload

6

Impact of Model Change – Re-baseline 2010/11

2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21

EA EoE -12.0 -12.0 -12.0 -12.0 -12.0 -12.0 -12.0 -12.0

EM EoE -24.4 -24.4 -24.4 -24.4 -24.4 -24.4 -24.4 -24.4

NT LN -31.4 -31.4 -31.4 -31.4 -31.4 -31.4 -31.4 -31.4

NW NW -17.3 -17.3 -17.3 -17.3 -17.3 -17.3 -17.3 -17.3

WM WM -3.6 -3.6 -3.6 -3.6 -3.6 -3.6 -3.6 -3.6

NE NGN 1.4 1.4 1.4 1.4 1.4 1.4 1.4 1.4

NO NGN -3.5 -3.5 -3.5 -3.5 -3.5 -3.5 -3.5 -3.5

SC SC

To Follow

SE SO

SO SO

SW WWU -3.0 -3.0 -3.0 -3.0 -3.0 -3.0 -3.0 -3.0

WN WWU -1.7 -1.7 -1.7 -1.7 -1.7 -1.7 -1.7 -1.7

WS WWU -3.2 -3.2 -3.2 -3.2 -3.2 -3.2 -3.2 -3.2

7

Impact of Model Change – Service Transfers

2011/12 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21

EA EoE -0.3 -0.9 -1.2 -1.5 -1.8 -2.1 -2.4 -2.7 -3.0

EM EoE -0.4 -1.2 -1.6 -2.0 -2.4 -2.8 -3.2 -3.6 -4.0

NT LN -0.2 -0.6 -0.8 -1.0 -1.2 -1.4 -1.6 -1.8 -2.0

NW NW -0.4 -1.2 -1.6 -2.0 -2.4 -2.8 -3.2 -3.6 -4.0

WM WM -0.3 -0.9 -1.2 -1.5 -1.8 -2.1 -2.4 -2.7 -3.0

NE NGN -0.3 -0.9 -1.2 -1.5 -1.8 -2.1 -2.4 -2.7 -3.0

NO NGN -0.2 -0.6 -0.8 -1.0 -1.2 -1.4 -1.6 -1.8 -2.0

SC SC

To Follow

SE SO

SO SO

SW WWU -0.2 -0.7 -0.9 -1.2 -1.4 -1.6 -1.8 -2.1 -2.3

WN WWU 0.0 -0.1 -0.2 -0.2 -0.3 -0.3 -0.4 -0.4 -0.4

WS WWU -0.1 -0.4 -0.6 -0.7 -0.8 -1.0 -1.1 -1.2 -1.4

8

Impact of Model Change – Combined (GWh)

2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21

EoE -37 -39 -39 -40 -41 -41 -42 -43

LN -32 -32 -32 -32 -33 -33 -33 -33

NW -18 -19 -19 -19 -20 -20 -21 -21

WM -4 -5 -5 -5 -5 -6 -6 -6

NGN -3 -4 -4 -5 -5 -6 -6 -7

SC

SO

WWU -8 -9 -10 -10 -10 -11 -11 -12

9

AGI Venting - Current Model

Current Methodology

‘Fixed’ values based on a 1994 Watt Committee report

National estimate

Derivation unknown

National value apportioned across LDZs at time of Network Sale

Approximately 5% of over all emissions

10

AGI Venting - Background

Two routinely venting components

Positioners

Controllers

Venting occurs both in steady state and during control actions

Each AGI usually has a number of Positioners and Controllers

Positioners and Controllers originally designed to work with

compressed air but modified to work with gas, as readily available

on site.

11

AGI Venting - Proposal

Proposed Methodology

‘Activity’ based estimation

Based on number of Positioners and Controllers

Estimate of Steady-state Venting

Manufacturers Data

Estimate of Operational Venting

12

AGI Venting – IFI Project

Key deliverables

Verify Manufacturers Data

Establish relationship between venting rate and control system

operating pressure for steady-state venting

Identify levels of venting in operation

Investigate the potential to relate operational venting to

telemetered flow and pressure data

The viability of this will be assessed when data is available

13

AGI Venting – Verification Manufacturers Data

Bristol Babcock Controller

0.05cfm @ 20 PSI

Verified by lab tests

Linear relationship between

control pressure and venting

Fisher Positioner

0.3cfm @ 100 PSI

Verified by lab tests

Linear relationship between

control pressure and venting

14

AGI Venting – Next Steps

End of July – Complete IFI Work

August – Complete inventory of existing equipment

September – Issue Consultation on AGI Venting

October – Report on Consultation issued to Ofgem

December – Ofgem decision (in time for 2014/15

Shrinkage Proposals)