Winter Outlook 2007/8 Ofgem Seminar 2 October 2007 Network - PDF document

Winter Outlook 2007/8 Ofgem Seminar 2 October 2007 Network Operations Chris Train

Agenda • Improving Demand-Supply Balance • Transportation issues • Infrastructure Developments • Unforeseen events • Increased Transparency

Gas Supply � UKCS supply decline more than offset by LNG expansion � Milford Haven - Dragon reported by developers as Q4 2007 � All LNG is subject to risk of cargo diversion to US and other markets � Price signals imply strong flows to Europe Forward Prices 1st September 2007 50 45 40 /th 35 p 30 25 20 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 HH NBP Zee TTF

Balance - Peak Periods 550 Short 500 Medium Long 450 IUK Interconnector 400 mcm/d LNG Imports 350 BBL 300 Norway UKCS 250 Demand 200 Peak day Very cold week Very cold month

Demand-Supply Balance - 1:50 winter 600 DM 500 Other NDM 400 mcm/d Domestic 300 Supply Range 200 Final View 100 1 21 41 61 81 days

Electricity � Plant margin 23% � 0.3 GW new renewables in Scotland � No demand growth � LCPD – 1 January 2008 – no material impact � ETS II starts 1 January 2008 � Coal is preferred to gas throughout the winter � Notified Unavailability at historic levels

Transportation Issues � Supply Pattern E X IS T IN G A S S E T S 8 5 b a r o p e ra tio n 7 5 b a r o p e ra tio n 7 0 b a r o p e ra tio n In te rc o n n e c to r � Easington T e rm in a l C o m p re s s o r L N G S to ra g e R e g u la to r � Trade & Transfer N E W A S S E T S N e w P ro p o s e d P ip e lin e s � Milford Haven P a n n a l D N e th e r K e lle t E E a s in g to n B a c to n K in g s L y n n B G F Is le O f G ra in C A L o c k e rle y H

Developments

2007/08 NTS Reinforcement EXISTING ASSETS 85 bar operation 75 bar operation 70 bar operation � 1 Milford Haven to Aberdulais + PRI Interconnector Terminal Compressor � 2 Felindre to Tirley + 2 PRIs LNG Storage Regulator � 3 Wormington Multi-Junction Modifications + New Unit NEW ASSETS New Proposed Pipelines � 4 Pannal to Nether Kellet � 5 SW Reinforcement – Langage Power 4 Station 2 1 3 5

2008/09 NTS Reinforcement EXISTING ASSETS 85 bar operation � A Longtown PRI 75 bar operation 70 bar operation � B Felindre Compressor Interconnector Terminal Compressor � C Churchover Multi-Junction Modifications + LNG Storage Regulator New Unit NEW ASSETS � D Barton Stacey to Lockerley New Proposed Pipelines � E Easington to Ganstead � F Asselby to Pannal A E � G Isle of Grain to Gravesend F C B D G

Shocks

Gas Data Provision - MIPI

Electricity - Information Transparency

Winter Consultation Process � Within winter updates will be posted regularly on National Grid website � Preliminary Winter 2008/9 Consultation in mid/late May 2008. Responses sought by early July 2008 � Ofgem/National Grid event summer 2008 � Final Winter 2008/9 Consultation Report in late September 2008

Summary � Demand-Supply Balance Improve � Lowest ever Safety Monitors � Uncertainties: � Weather � Will demand bounce back? � Further infrastructure investments � European market interaction – electricity and gas � LNG – a world market � Can’t afford to be complacent � Transparency initiatives � Feedback by 9 November