Mod 0273: 1 st Development Group Workshop 4 th February 2010.

Mod 0273: 1st Development Group Workshop

4th February 2010

NG NTS Initial Views (December 2009)

Are comparisons to the electricity model appropriate?

The 3 month Connection and Use of System Code (CUSC) Modification Application process employed in electricity does not include a feasibility study

Feasibility Study fees are not published in electricity

The gas process needs to be fully understood

In comparison to electricity, the number of new connections and Network Exit Agreement (NExA) changes are relatively few

Receiving a number of enquiries in a relatively short period can cause workload planning difficulties

The timescales in gas vary considerably depending on the complexity of the customer requirements/installation

Feasibility Studies are important as they are undertaken to meet legislative obligations

Electricity Connections / Modifications

Connection & Use of System Code (CUSC) Process

Electricity New Connections & Modifications - CUSC Process

The CUSC process offers a 3 stage connection process;

Feasibility Study (If required)

Connection Offer and Acceptance

Physical Connection / Modification

Feasibility Study

Formal application & Payment cleared

Clock Start

Sanction

Offer Made

Connection Offer Acceptance

(Optional)

3 Months 3 Months6 Months+

Works

Electricity New Connections & Modifications - CUSC Process (Cont.) – Feasibility Study

Typically undertaken to help determine the best location for a new connection (e.g. Power Station)

Rarely used (1-2 p.a.) as information quickly becomes out of date and timescales are longer than for formal application process

Unregulated service - all costs are recovered, no delivery SLA

National Grid Daily rates are published but costs of studies may also include contractor costs. The number of hours involved is also not known until the scope is agreed.

Electricity New Connections & Modifications - CUSC Process (Cont.) – Design Stage (1)

Formal 3 month process covering New Connections or Modifications to existing contracts

National Grid offers to hold one pre-application meeting

Associated documentation is extensive

‘Clock starts’ only when all documentation is received/approved & funds have been paid

Modelling analysis work is predominantly conducted “in house” by 40+ engineers

NGET receive a considerable number of applications p.a.

New connections: 40%

Modifications: 60%

Electricity New Connections & Modifications - CUSC Process (Cont.) – Design Stage (2)

Fees (fixed & indicative) published for New Connections & Modifications – average £100k, capped at £400K

Offer includes commencement date (fixed) and list of works (can be amended at a later date)

Offer for new connections & modifications made within 3 months

NG can request an extension to the 3 month timescale but this is rarely used

Acceptance;

User has 3 months to accept and only minor changes to contract are allowed

Major changes = new application

Gas Connections / Modifications

NTS Exit Points with Network Exit Arrangements (NExAs)

New Connections & NExA Modification Process (1)

Offering Customers a connection to the NTS or a modification to their existing NExA is a license obligation (LC4B)

New connection & modification processes are undertaken in line with the Statement & Methodology for Connection Charging.

Available via link: http://www.nationalgrid.com/NR/rdonlyres/07959E2F-621E-4E55-8051-F19514F23EC4/35303/SC4BApril2009v30.pdf

Statement also includes worked examples of connections with indicative costs:

Conceptual design study for new connection - approx. £30k to £50k

Feasibility study to assess impact of adding a new connection…- up to approx. £150k

Feasibility study for System Extension pipeline (Exit only) - approx. £100k to £400k, depending on pipeline length and route

Users/developers must commit to payment of the cost estimate prior to commencement of the study

AcceptanceFeasibility Study

New Connections & NExA Modification Process (2)

A 3 phase approach is also offered for new exit connections;

Customer Engagement & Feasibility Study (If required)

Design studies

Conceptual

Detailed

Siteworks

Indicative Conceptual design study timescales are provided (on the web) – 20-26 weeks but it is also explained that it “would be longer for complex projects”

Work is often staged to enable a customer to understand project feasibility, costs and timescales without committing to full costs at the outset

Offer Made

Conceptual Design

(Optional)

6 months 3 Months3-6 months

Siteworks

6 - 24 Months

Detailed Design

6 months

New Connections & NExA Modification Process (3)

Modifications include physically moving the exit connection and amending ramp rates/operating pressures

A Feasibility Study maybe required prior to conceptual design and/or construction

For Modifications the scope of a Feasibility Study is ‘flexible’ and tailored to suit the customers requirements but also varies depending on:

the complexity of the project

the size of the installation

Once scope is agreed, the timescales and costs of the (bespoke) Feasibility Study are agreed with the customer upfront (contract)

A Feasibility Study may include;

An Impact Analysis of onsite components & wider network issues

An evaluation of options and any additional analysis as specified / agreed with customer

Indicative timescales & costs for Design & Sitework phases Further detail to follow

Why is it important we conduct analysis within a feasibility study?

Rapid load changes during start up and shutdown could affect the efficient and effective operation of the pipeline system

Trigger safety devices and cut off supply at the installation

Cause damage to National Grid equipment at installations such as pressure regulators, filters and orifice plate meters

Adversely affect other Users of the system (entry and exit points) in the vicinity

Legislation

Health and Safety at Work Act etc. 1974

Pressure Systems Safety Regulations (PSSR) 2000

Pipeline Safety Regulations (PSR) 1996

Further detail to follow

Typical timescales and costs

Important to remember that there is no such thing as a ‘typical’ project!

Further detail and case studies to follow

Characteristic Timescale Cost

Simple changes/minimum connections 3-6 months £10k to £50K

Semi complex changes/medium size connections 6-9 months £50K+

Complex changes/large connections 9-12 months £100K+

What is involved in conducting a study?

Further detail to follow

CustomerEnquiry

Agree studyrequirements

and obtaindata required

ContractsAgreed

NGCommencestudy andengage

contractorsrequired

Studychallenged

andreviewed

Reportissued toCustomer

Key

Customer Network Design

Contractor Customer Services

Contractorsundertake

Study

Further detail

National Grid NTS propose that an Network Design expert should cover certain aspects of the process in detail at March session

Problems with current arrangements – NTS perspective

Timing

Indicative timescales are provided, however

Complexity of exit connections/modifications and associated differences in scope make it difficult to define exact timescales upfront

Costs

Indicative costs are provided, however again

Complexity of exit connections/modifications and associated differences in scope make it difficult to define exact costs upfront

Problems with current arrangements – NTS perspective

Communication

No visibility of upcoming work (types, number, nature and frequency) - receiving a number of enquiries in a relatively short period can cause workload planning difficulties

Process

Some enquiries are speculative in nature

Scope creep is sometimes a problem

Customers don’t always know what they want!

Customers often experience difficulties in providing the information requested, especially if it needs to be provided by their equipment suppliers

Difficulties in agreeing Contractual terms (between Customer and NG)