UNC Mod Proposal 373. GSOG suggestions on. Jacopo Vignola. 18 th May 2011 UNC Transmission Workstream

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Roger Hoover
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1 GSOG suggestions on UNC Mod Proposal 373 Jacopo Vignola 18 th May 2011 UNC Transmission Workstream

2 Agenda Objectives Current arrangements Concerns Proposal

3 Objectives Map current arrangements What are the processes a storage developer must complete to ensure a connection to the NTS? How do they interact each other? Identify concerns Why current NTS connection arrangements are not optimal for developing new storage facilities? Proposal How does the proposed Straw-man help to address the identified concerns on current arrangements?

4 Current arrangements Map of processes Comparing the timeline of each process that any storage developer must face in order to secure a connection to the NTS Six processes Connection Land/seabed lease NTS ENTRY EXIT Storage developer licensing development Identify mismatches between timelines

5 Concerns (1) Information Transparency Need for additional clarity at earlier stages of the connection process (initial enquiry and feasibility study) Location, Ramp rates, Gas quality NGG Apr Initial enquiry Storage developer Jun Design & build agr. Jan - Jun Feasibility study Mar - Mar Jul - Feb negotiation Apr - Sep Conceptual Detailed design design Apr-Sep Construction work Mar SCA Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Designing facility and environmental assessment Permitting phase (18 months) Land negotiation Setting washing/drilling infrastructure Surface building Washing caverns / additional drilling Injecting cushion gas (6 months) START The trade association of choice for UK energy (18 months) & utility network companies

6 Concerns (2) Key milestones & FID Some key milestones are unlikely to be triggered before the FID Entry/Exit Capacity, DBA Storage developer Ofgem NGG Jul Application Window 38 months 42 months?? Mar QSEC auction Jun Design & build agr. Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Shipper Transportation NGG GT licence Designing facility and environmental assessment Permitting phase (18 months) FID Setting washing/drilling infrastructure Surface building Washing caverns / additional drilling (18 months) Injecting cushion gas (6 months) START

7 Proposal Addressing concern (1) The feasibility study shall be completed in advance, including: 1. Indicative tech details (including Ramp Rates, Capacity and gas quality) when NTS reinforcement is/isn t necessary 2. Timeline for applying to entry/exit capacity 3. Indicative location of connection (< few metres) 4. Indicative cost of the overall connection package 5. Indication of eventual reinforcement of NTS 6. Option for study to look at more than one connection location Addressing concern (2) The feasibility report shall include enough details to trigger the IPC, lease and licences processes developer will not make FID until certainty on ramp rates, capacity, costs

8 Proposal Enhancing and moving backward the feasibility study to trigger : pre-planning, land negotiations, permitting procedures to facilitate : FID NGG Apr Initial enquiry Storage developer Jun Design & build agr. Jan - Jun Feasibility study Mar-Mar Jul - Feb negotiation Apr-Sep Conceptual Detailed design design Apr - Sep Construction work Mar SCA Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Designing facility and environmental assessment Permitting phase (18 months) Land negotiation Setting washing/drilling infrastructure Surface building Washing caverns / additional drilling (18 months) Injecting cushion gas (6 months) START The trade association FID of choice for UK energy & utility network companies

9 Further concern Given a formal governance of NTS Connection Keeping current lead times for releasing NTS commercial capacity The overall timeline is too long + 3 years (NTS Capacity lead time) + 3 years (IPC process and other licensing) + 1 year of feasibility study = 7 years from the initial enquiry Need to consider shorter timescales for QSEQ auction from 42 months to months for a min connection (NOT FULL CONNECTION) Capacity lead time shall be shorter All necessary studies (including indicative NTS reinforcements) have been carried out during the feasibility study All planning risks stand on the developer

10 Q & A

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