LDZ Shrinkage Forum

Jonathan Dennett

Elexon

22nd June 2006

Our Proposals

Gas Year Shrinkage Factor

2005/06 0.62%2006/07 0.621%

Agenda

1. LDZ Shrinkage Overview – National Grid

2. Initial LDZ Shrinkage Factor Proposals 2006/07

1. LDZ Shrinkage Overview

1.1 Structure for the discussion of Initial Proposals for LDZ Shrinkage

LDZ Shrinkage Obligations What the Shrinkage Factors are and how they are

used The Shrinkage components

1.2 LDZ Shrinkage Obligations

To replace the gas that is used or lost by the Distribution Networks

1.3 What the Shrinkage Factors are and how they are used (Part 1)

The Gas Transporter buys its Shrinkage Gas by LDZ, as this enables local Shrinkage performance to be taken into account

The Gas Transporter buys Shrinkage Gas each day to replace the gas that is lost or used on that day

To enable this to occur, the Gas Transporter buys a proportion of throughput in each LDZ each day

Each LDZ has a ‘Shrinkage Factor’ that is a factor of consumption, which the Gas Transporter is then obliged to buy each day for the particular LDZ (the next slide refers)

1.3 What the Shrinkage Factors are and how they are used (Part 2)

Calculating a Shrinkage Factor

Each LDZ has its own Shrinkage Energy, Consumption Energy and therefore Shrinkage Factor

EnergynConsumptioLDZ

EnergyShrinkageLDZFactorShrinkageLDZ

1.4 LDZ Shrinkage components

There are three components to LDZ Shrinkage; they are:

Leakage Own Use Gas Theft of Gas

The amount of energy in respect of each of these components is calculated in a different way

2. National Grid’s 2006/07 Gas Year Initial LDZShrinkage Factor Proposals

2. Index of national Grid’s LDZ Shrinkage Slides

Leakage Low Pressure Medium Pressure AGI Identified Events

Own Use Gas Theft of Gas Shrinkage energy summary Annual Consumption Proposed Shrinkage Factors

2.1 Calculation of Leakage Methodology

In every case, we have applied the same methodology as last year

We have used revised data in the calculations

2.1.1 LP Leakage

2.1.1 LP Leakage (Mains Length 2006 Proposal)

LDZLength of Main (km)

PE CI DI ST TotalEA 9,242 5,102 1,278 326 15,948EM 13,373 7,585 1,483 441 22,882NL 10,242 8,038 1,811 522 20,613NW 16,600 10,499 1,632 1,157 29,887WM 9,492 8,193 1,180 978 19,842Total 58,948 39,417 7,383 3,424 109,173

2.1.1 LP Leakage (Mains Length 2005 Proposal)

LDZLength of Main (km)

PE CI DI ST TotalEA 8,875 5,436 1,285 331 15,927EM 12,296 8,444 1,495 436 22,670NL 9,680 8,697 1,827 493 20,697NW 15,586 11,313 1,633 1,147 29,679WM 8,720 8,903 1,184 963 19,769Total 55,156 42,792 7,424 3,370 108,742

2.1.1 LP Leakage (Mains Length Differences)

LDZLength of Main (km)

PE CI DI ST TotalEA 367 -334 -7 -6 20EM 1,078 -859 -12 6 212NL 562 -659 -16 29 -84NW 1,014 -814 -1 10 209WM 772 -710 -4 15 73Total 3,793 -3,375 -41 54 431

2.1.1 LP Leakage (Average System Pressure)

LDZ

Average System Pressure (mbarg)

Average System Pressure (mbarg)

All-PE Networks Excluded2006

Proposal2005

Proposal Difference2006

Proposal2005

Proposal DifferenceEA 35.63 35.99 - 0.36 33.94 35.48 - 1.54EM 35.27 34.20 + 1.08 33.19 34.36 - 1.16NT 26.34 26.84 - 0.50 26.34 26.84 - 0.50NW 29.81 28.30 + 1.51 29.18 28.13 + 1.05WM 29.76 30.02 - 0.26 28.10 28.97 - 0.87Total 31.14 30.69 + 0.45 29.93 30.36 - 0.43

2.1.1 LP Leakage (Leakage Factors)

Material

Leakage Rate (scm/km/annum @

30mbarg)

PE 63.5Steel >=4" 3854.3Steel <=3" 3416.3Ductile <=5" 719.2Ductile >=6" 576.4Spun Cast 1075.7Pit Cast <=3" 2407.2Pit Cast 4"-5" 1639.8Pit Cast 6"-7" 2525.5Pit Cast >=12" 7463.4

2.1.1 LP Leakage (MEG)

LDZ

MEG Saturation2006

Proposal2005

Proposal DifferenceEA 0.00% 0.00% 0.00%EM 28.21% 29.97% -1.76%NL 16.64% 10.45% 6.19%NW 8.67% 10.72% -2.04%WM 19.56% 20.96% -1.40%Total 19.43% 19.79% -0.36%

2.1.1 LP Leakage (Energy Comparison)

LDZ

LP Leakage (GWh)2006

Proposal2005

Proposal DifferenceEA 218 225 - 7EM 293 307 - 15NT 313 339 - 26NW 446 442 +4WM 330 355 - 25Total 1600 1668 - 69

2.1.2 MP Leakage

2.1.2 MP Leakage (Mains Length 2006 Proposal)

LDZLength of Main (km)

Metallic Plastic Total EA 546 1,627 2,173EM 1,499 2,525 4,024NT 1,041 745 1,786NW 1,016 2,217 3,233WM 1,027 2,046 3,074Total 5,130 9,160 14,290

2.1.2 MP Leakage (Mains Length 2005 Proposal)

LDZLength of Main (km)

Metallic Plastic Total EA 551 1,629 2,180EM 1,535 2,478 4,013NT 1,042 741 1,783NW 1,035 2,191 3,226WM 1,040 2,012 3,052Total 5,203 9,052 14,255

2.1.2 MP Leakage (Mains Length Differences)

LDZLength of Main (km)

Metallic Plastic Total EA -5 -2 -7EM -36 46 10NT -1 4 4NW -19 26 7WM -12 34 22Total -73 109 36

2.1.2 MP Leakage (Energy Comparison)

LDZMP Leakage (GWh)

2005 2004 DifferenceEA 20.3 20.4 -0.1EM 44.7 45.2 -0.5NT 30.4 30.5 -0.1NW 25.1 25.1 -0.1WM 28.9 28.8 0.0Total 149.3 150.0 -0.7

2.1.3 AGI Leakage

2.1.3 AGI Leakage (Population)

LDZDistrict

Governor HoldersService

GovernorLTS

OfftakeNTS

OfftakeEA 1,510 45 5,023 146 12EM 2,201 16 13,070 129 11NL 971 64 13,859 127 5NW 2,644 76 3,535 146 10WM 1,932 7 7,912 173 12Total 9,258 208 43,400 721 50

2.1.3 AGI Leakage (Leakage Factors)

Leakage Rate (scm/annum/site)District

Governor HoldersService

GovernorLTS

OfftakesNTS

Offtakes406.9 7692 7.64 6485 31075

2.1.3 AGI Leakage

Total AGI Leakage (GWh)LDZ 2006 ProposalEA 42.8EM 38.4NL 38.4NW 52.3WM 42.7

Total 214.6

2.1.4 Identified Gas Release Events

2.1.4 Identified Gas Release Events (UKD Occurrences)

No. of OccurrencesServices Mains >500kg Total11,033 1,553 44 12,630

2.1.4 Identified Gas Release Events (Energy Assessment)

LDZGas Release Events

scm GWhEA 84,714 0.92EM 170,868 1.87NL 91,709 1.00NW 188,139 2.06WM 107,548 1.18Total 642,979 7.03

2.1.5 Own Use Gas

2.1.5 Own Use Gas

National Grid proposes to use accurate values for Own Use Gas in the 2006 proposal

2.1.5 Own Use Gas (Energy Assessment)

LDZ

Own Use Gas%

Consumption Energy (GWh)EA 0.012% 6.0EM 0.012% 9.3NL 0.012% 7.8NW 0.012% 10.1WM 0.012% 6.9Total 0.012% 40.2

2.1.6 Theft of Gas

2.1.6 Theft of Gas

National Grid is not proposing any change to Theft of Gas at this time

2.1.6 Theft of Gas (Energy Assessment)

LDZ

Theft of Gas%

Consumption Energy (GWh)EA 0.02% 10.1EM 0.02% 15.5NL 0.02% 13.0NW 0.02% 16.8WM 0.02% 11.6Total 0.02% 66.9

2.1.7 Overall Shrinkage Energy

2.1.7 Overall Shrinkage Energy

LDZ Leakage (GWh) OUG (GWh) ToG (GWh) Total (GWh)EA 282.1 6.0 10.1 298.2EM 377.9 9.3 15.5 402.7NT 382.8 7.8 13.0 403.5NW 524.9 10.1 16.8 551.8WM 403.1 6.9 11.6 421.7

Total 1970.8 40.2 66.9 2077.9

2.2 Annual Consumption

2.2.1 Annual Consumption (Comparison)

LDZLDZ Consumption (TWh)

2006/07 2005/06 DifferenceEA 50.29 53.48 -3.20 -5.98%EM 77.55 81.92 -4.37 -5.34%NT 64.91 72.61 -7.70 -10.60%NW 84.14 90.77 -6.63 -7.30%WM 57.85 63.98 -6.13 -9.58%Total 334.74 362.77 -28.03 -7.73%

2.3 Shrinkage Factors

2.3.1 Shrinkage Factors

LDZ LeakageOwn Use

GasTheft of

Gas

Shrinkage Factor

2006/07 2005/06EA 0.561% 0.012% 0.020% 0.593% 0.60%EM 0.487% 0.012% 0.020% 0.519% 0.54%NT 0.590% 0.012% 0.020% 0.622% 0.62%NW 0.624% 0.012% 0.020% 0.656% 0.62%WM 0.697% 0.012% 0.020% 0.729% 0.76%UKD 0.589% 0.012% 0.020% 0.621% 0.62%