Exit ZoneOther

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EMERGENCY WORKSHOP

Rules & Practice

Ballerup 25 January 2018

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HOST EMERGENCY EXIT

DEFRIBILLATOR (AED)

MEETING POINT

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PURPOSE & EXPECTATION

Purpose Purpose Purpose Purpose

• To learn more about the rules of security of supply in the Rules for Gas Transport, and how they come into play

• To go through the different crisis levels using case studies, and to discuss how Energinet and the market is expected to react

• To investigate possible improvements of rules in regard to security of supply.

Expectation Expectation Expectation Expectation

• We expect your active participation

• We expect that you play along

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AGENDA

• Welcome

• Introduction to the workshop

• Introduction to the rules for security of supply in Rules for Gas Transport

• Introduction to the crisis levels and tools

• Case 1

• Lunch (around 11:30)

• Case 2

• Imbalance prices in Emergency

• Wrap up and end (around 13:45)

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DISCLAIMER FOR TODAY

• The cases presented today are fictive, but do

include realistic elements and physical limits of the transmission system

• The cases include certain behaviour and decisions by Energinet based on specific case descriptions.

Energinet’s behaviour and decisions will most likely differ if similar situations should occur in real-life situations, as the cases presented today are

simplified compared to reality

• The shipper roles and portfolios used in today’s workshop are purely fictive. Any resemblance with actual shipper portfolios is based on coincidence and is not intentional

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INTRODUCTION TO THE RULES FOR SECURITY OF SUPPLY AND CRISIS LEVELS

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SECURITY OF SUPPLY RULES – 1 OF 4

16 16

16 16 –––– Security of SupplySecurity of SupplySecurity of SupplySecurity of Supply

• Energinet is responsible for the security of supply of the Danish gas market

• Energinet is entitled to activate each of the 3 crisis levels, depending of the supply situation

• Prior to each crisis level, Energinet will inform shippers and other relevant parties of the supply situation, as soon as Energinet has relevant information

16.1 16.1 16.1

16.1 –––– Early Warning and AlertEarly Warning and AlertEarly Warning and AlertEarly Warning and Alert

• Natural Gas will be transported and distributed as in the normal state of operation

• However, Energinet may increase the adjustment step 1 and 2 balancing prices

Rules for Gas Transport, Clause 16 (highlights)

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SECURITY OF SUPPLY RULES - 2 OF 4

16.2 .1 16.2 .1 16.2 .1

16.2 .1 –––– Emergency; Emergency; Emergency; Energintet’sEmergency; Energintet’sEnergintet’s rights and obligationsEnergintet’srights and obligationsrights and obligationsrights and obligations

• If Energinet is unable to fulfil it’s obligations in relation to the Shipper’s capacity agreements, the fulfilment of the obligation resting on Energinet is suspended during the Emergency period

• Imbalances are not allowed during Emergency, unless otherwise instructed by Energinet

• Energinet is entitled to give direct instructions regarding nominations at Entry, Exit, Storage, GTF and ETF Point(s). If Shipper does not comply, Energinet can alter nominations, or exclude Shipper from the market

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Rules for Gas Transport, Clause 16.2 (highlights)

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SECURITY OF SUPPLY RULES – 3 OF 4

16.2.2 16.2.2 16.2.2

16.2.2 –––– Emergency; Shipper’s and Storage Customer’s obligationsEmergency; Shipper’s and Storage Customer’s obligationsEmergency; Shipper’s and Storage Customer’s obligationsEmergency; Shipper’s and Storage Customer’s obligations

• The shipper shall:

• Continue to deliver at the Entry and GTF Point(s)

• Inform Energinet immediately if an event materially affects the Shipper’s ability to deliver

• Make Natural Gas subject to Filling Requirements in the Storage Facilities available to Energinet, in accordance with separate agreements

• Shipper’s shall continue to nominate it’s offtake, to give Energinet the best information

• Any Natural Gas delivered by the Shipper for the Exit Zone reduces the amount Energinet must deliver. The shipper will not pay for these amounts, but only for amounts delivered by Energinet

Rules for Gas Transport, Clause 16.2 (highlights)

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SECURITY OF SUPPLY RULES – 4 OF 4

16.2.3 16.2.3 16.2.3

16.2.3 –––– Emergency; TransitEmergency; TransitEmergency; TransitEmergency; Transit

• Transit shall be maintained, provided that:

• Amounts shall at least correspond to the Shipper’s offtake in the Exit Zone

• The Shipper must balance its deliveries and offtakes

• Energinet shall be able to transport

16.3 16.3 16.3

16.3 ---- Collaboration Collaboration Collaboration Collaboration

• All parties must collaborate with Energinet, to ensure that the Danish Gas Market is affected as little as possible

See also 16.4 (Protected and Non-Protected Consumption Sites), and 16.5 (Interruptible Supply)

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Rules for Gas Transport, Clause 16.2.3, 16.3 (highlights)

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CRISIS LEVELS AND TOOLS

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CASE 1

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CASE 1

It is a Monday morning in February at 8:00 am Weather forecast: minus 5 degrees

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Nybro NybroNybro Nybro

33,333 Nm3/h 403,329 kWh/h

Ellund Ellund Ellund Ellund

450,000 Nm3/h 5,040,000 kWh/h

Stenlille Stenlille Stenlille Stenlille

291,667 Nm3/h 3,266,670 kWh/h Lille Torup

Lille TorupLille Torup Lille Torup 141,667 Nm3/h 1,586,670 kWh/h

Dragør DragørDragør Dragør

208,333 Nm3/h 2,333,329 kWh/h Exit DK

Exit DK Exit DK Exit DK

708,333 Nm3/h 7,933,333 kWh/h

Supply and demand situation without Tyra

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SUPPLY AND DEMAND WITHOUT TYRA

Nm3/d Nm3/h

Nybro 800.000 33.333

Entry Ellund 10.800.000 450.000 Stenlille 7.000.000 291.667 Lille Torup 3.400.000 141.667 Exit DK -17.000.000 -708.333 Dragør -5.000.000 -208.333

Balance 0

kWh/d kWh/h Nybro 8.960.000 373.333 Entry Ellund 120.960.000 5.040.000 Stenlille 78.400.000 3.266.667 Lille Torup 38.080.000 1.586.667 Exit DK -190.400.000 -7.933.333 Dragør -56.000.000 -2.333.333

Balance 0

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CASE 1

Stenlille Gas Storage facility Time: 8:00 am

• There is a fire on the process plant at Stenlille Gas Storage facility

• An emergency shutdown of the plant has been performed, no gas is delivered from the storage

• The process plant and the administration building has been evacuated

• Police and fire department are on site, the extinguishing work is ongoing

• There is no time estimate when the storage will be in operation again

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Incident

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CASE 1

Action from SSO

• Due to the shut down of Stenlille Gas storage facility, SSO publishes a REMIT message

Incident

Reduction of storage withdrawal capacity for the rest of the current gas day of

• 7,600,000 Nm3/d

• 85,000,000 kWh/d

Storage customers will be reduced pro-rata in withdrawal capacity for the rest of the gas day (22 hours)

Nm3/d Nm3/h kWh/d kWh/h New storage withdrawl capacity 7.333.333 333.333 82.133.333 3.733.333

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PRORATA

25 January 2018

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RFGS clause 13: Rules GSD shall allocate the Firm Capacity available in the Storage Facilities on a pro rata basis among the affected Storage Customers in proportion to their Firm Capacities. The Storage Customers' Nominations exceeding the available Firm Capacity shall be treated as requests for Interruptible Capacity, see Clause 5.3. If remaining capacity is available, after the allocation of capacity on a pro rata basis, this capacity is allocated among the affected Storage

Customers in proportion to their Nominations. The allocation cannot exceed the Storage Customer's Nominations.

• Firm capacity will be prorate reduced.

• Nomination exceeding the prorate reduced capacity will be allocated on interruptible terms.

• Remaining capacity after allocation of firm prorata reduced capacity, will be allocated in proportion to the customers nomination!

• Customers will only be charged for the interruptible capacity that exceeding the customers firm capacity

PRORATA ALLOCATION OF CAPACITY

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CASE 1

Action from TSO

• Physical withdrawal from Lille Torup gas storage facility is increased to maximum

• 333,333Nm3/h

• 4,050,000 kWh/h

• Stenlille gas storage facility is a major contributor to maintain the pressure in the eastern part of Denmark

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Incident

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CASE 1

New balance after Stenlille gas storage facility outage

Incident

Nm3/d Nm3/h kWh/d kWh/h

Nybro 800.000 33.333 Nybro 8.960.000 373.333

Entry Ellund 10.800.000 450.000 Entry Ellund 120.960.000 5.040.000

Stenlille 0 0 Stenlille 0 0

Lille Torup 8.000.000 333.333 Lille Torup 89.600.000 3.733.333 Exit DK -17.000.000 -708.333 Exit DK -190.400.000 -7.933.333

Dragør -5.000.000 -208.333 Dragør -56.000.000 -2.333.333

Balance -2.400.000 Balance -26.880.000

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To increase the pressure in the transmission system in the eastern part of Denmark we use the Egtved

compressor station

The issue is not the lack of volumes, but more the loss of capacity in the eastern part of Denmark

Due to the export and the off take on Zealand, the

pressure drops too fast, despite the use of the compressor station To compress gas

from north to east we have to change the flow scenario in Egtved.

To do so, all flows in Egtved will be 0 for app. half an hour before compression can start

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INTRODUCTION TO THE GROUPS

Case 1

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INTRODUCTION TO THE GROUPS - EXAMPLE

Point/flow Point/flow Point/flow

Point/flow Exit zoneExit zoneExit zoneExit zone EllundEllundEllundEllund entryentryentryentry Storage Storage Storage Storage GTF/ETFGTF/ETFGTF/ETFGTF/ETF BalanceBalanceBalanceBalance Booked capacity

Start

400,000 kWh/h 300,000 kWh/h (sold out)

150,000 kWh/h (withdrawal)

- -

Case 1: hourly flow – start

- 400,000 kWh/h

+ 200,000 kWh/h

+ 150,000 kWh/h

+ 50,000 kWh/h 0

Case 1: booked capacity - Alert

75,000 kWh/h 75,000 kWh/h 75,000 kWh/h 75,000 kWh/h

((((reducedreducedreducedreduced ---- withdrawal withdrawalwithdrawal withdrawal))))

- -

Case 1: hourly flow - Alert

---- 375,000 375,000 375,000 375,000 kWh/h*

kWh/h*kWh/h*

kWh/h*

? ? ? ?

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Case 1 - Portfolio

*Reduced due to commercial interruptible consumers

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CASE 1

Discussion in the group Discussion in the group Discussion in the group Discussion in the group

What do the market player do?

Plenum discussion

Incident

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LUNCH UNTIL 12:15

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CASE 2

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CASE 2

The storage was not filled 100 per cent during the injection season It was a cold December and January with a large storage withdrawal

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Supply situation

Nybro 0 0 Nybro 0 0

Stenlille 4.000.000 166.667 Stenlille 44.800.000 1.866.667

Lille Torup 3.000.000 125.000 Lille Torup 33.600.000 1.400.000 Exit DK -12.000.000 -500.000 Exit DK -134.400.000 -5.600.000

Dragør -3.000.000 -125.000 Dragør -33.600.000 -1.400.000

Balance 0 Balance 0

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MSF: MINIMAL STORAGE FILLING

• Actual storage filling is updated and communicated frequently to the market players

• Prognosis for filling during the rest of the season is taken into account

• Warm , normal or cold weather

• 100 per cent utilisation of north bound firm capacity at Ellund

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CASE 2

TSO action

• Declare an Early Warning situation in the Danish gas system, to draw attention to a potentially constrained supply situation

• The increased balance payment tool is not activated The gas price in Denmark is higher than in Germany The weather forecast implies cold weather

Incident

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CASE 2

Discussion in the group Discussion in the group Discussion in the group Discussion in the group

Presentation in plenum

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Incident

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Two weeks later the Two weeks later the Two weeks later the Two weeks later the

situation is more stressed

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CASE 2

TSO action

• Declare an Alert situation in the Danish gas system, to draw attention to an even more potentially constrained supply situation

• The increased balance payment tool is still not activated

• Energinet has the possibility to activate the commercial interruptible costumers (Hyper3), but this tool will not be very efficient in this situation (volume situation)

• Energinet can not reduce the supply to Sweden, as there is no hydraulic problem

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Incident

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Another two weeks later Another two weeks later Another two weeks later Another two weeks later the situation is even more the situation is even more the situation is even more the situation is even more stressed

stressed

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CASE 2

TSO action

• Energinet evaluates duration of the situation and the need for Emergency gas

• Declaration of an Emergency situation in the Danish gas system (Sweden also declares Emergency)

• The increased balance payment tool is activated

• Interruption of non-protected costumers in Sweden after 3 hours

• Notify the non-protected costumers in Denmark to interrupt in 3 days

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Incident

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CASE 2

• Imbalances in the market is covered by Emergency gas from storage

• Energinet has more Emergency gas than needed, therefore the non-protected market in both Sweden and Denmark will be prorata assigned emergency gas

• The capacity on Dragør Border will be set to 75,000Nm3/h (840,000kWh/h)

Supply situation

Nybro 0 0 Nybro 0 0

Stenlille 2.000.000 83.333 Stenlille 22.400.000 933.333

Lille Torup 1.000.000 41.667 Lille Torup 11.200.000 466.667 Exit DK -12.000.000 -500.000 Exit DK -134.400.000 -5.600.000

Dragør -1.800.000 -75.000 Dragør -20.160.000 -840.000

Balance 0 Balance 0

Dragør Border has been reduced from 125,000 to75,000 Nm3/h

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CASE 2

Sweden Sweden Sweden Sweden

Before Before Before

Before prorataprorataprorataprorata

• Total demand before prorata: 125.000Nm3/h

• Protected costumers: 5.000Nm3/h

• Non-protected costumers: 120.000Nm3/h After

After After

After prorataprorataprorataprorata

• Deliveries: 75.000Nm3/h

• Protected costumers: 5.000Nm3/h

• Non-proteced costumers: 70.000Nm3/h

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Incident

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CASE 2

Discussion in the group Discussion in the group Discussion in the group Discussion in the group

Presentation in plenum

Incident

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IMBALANCE PRICES IN EMERGENCY

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IMBALANCE PRICES DURING EMERGENCY

Three different scenarios

The expected imbalance prices stated above are listed on the current price list.

Scenarios ScenariosScenarios

Scenarios ImbalanceImbalanceImbalanceImbalance Delivers toDelivers toDelivers toDelivers to Imbalance priceImbalance priceImbalance priceImbalance price

Scenario 1 Positive Exit Zone/Other¹ Adjustment step 1

Scenario 2 Negative Exit Zone Force majeure price

Scenario 3 Negative Other Marginal sales price

1 Deliveries to everything other than the Exit Zone.

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IMBALANCE PRICES DURING EMERGENCY

Entry Exit

Exit ZoneOther

Positive imbalance

Scenario 1 – positive imbalance

Adjustment step 1

Adjustment step 1 Adjustment step 1 Adjustment step 1 Adjustment step 1

Neutral gas price minus 0.5 % of the neutral gas price.

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IMBALANCE PRICES DURING EMERGENCY

Negative Negative Negative

Negative imbalanceimbalanceimbalanceimbalance - Two different scenarios

Scenario 2

Entry Exit

Exit Zone

Negative imbalance Force majeure price

Marginal sales price

Scenario 3

Entry Exit

Other

Negative imbalance

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IMBALANCE PRICES DURING EMERGENCY

Entry Exit

Exit ZoneOther

Negative imbalance

Entry Exit

Exit ZoneOther

Force majeure price

Deliveries to the Exit Zone take precedence over other deliveries.

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IMBALANCE PRICES DURING EMERGENCY

Entry Exit

Exit ZoneOther

Force majeure price

*Early

*Early Warning, Alert or EmergencyWarning, Alert or EmergencyWarning, Alert or EmergencyWarning, Alert or Emergency

In any of the three crisis levels, Energinet may

increase the adjustment percentages up to 100 per cent for both adjustment 1 and 2.

Adjustment step Adjustment step Adjustment step Adjustment step 1111*

Marginal sales price Marginal sales price Marginal sales price Marginal sales price* Force

Force Force

Force majeure pricemajeure pricemajeure pricemajeure price*

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WRAP UP

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WRAP UP AND NEXT STEPS

• Energinet will take the output of todays workshop into consideration in the general work with assssing the market development in regards to the Tyra situation

• Energinet expect to have a paper ready for consultation during February

• Hereafter the paper will be forwarded to DERA for approval

What will happen the coming months

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QUESTIONS

CONTACT: tel.: +45 23338908 email: cru@energinet.dk

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CASES

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CASE 1

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SHIPPER 1

Start

- -

- 400,000 kWh/h

+ 200,000 kWh/h

+ 150,000 kWh/h

+ 50,000 kWh/h 0

((((reducedreducedreducedreduced ---- withdrawal withdrawalwithdrawal withdrawal))))

- -

---- 375,000 375,000 375,000 375,000 kWh/h*

kWh/h*kWh/h*

kWh/h*

? ? ? ?

Case 1 - Portfolio

*Reduced due to commercial interruptible consumers

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SHIPPER 2

Point/flow Point/flowPoint/flow

Point/flow ExitExitExitExit DragørDragørDragørDragør EllundEllundEllundEllund entryentryentryentry Storage Storage Storage Storage GTF/ETFGTF/ETFGTF/ETFGTF/ETF BalanceBalanceBalanceBalance Booked capacity

Start

- -

Hourly flow – start

- 250,000 kWh/h

+ 50,000 kWh/h + 100,000 kWh/h

+ 100,000 kWh/h

0

((((reducedreducedreducedreduced capacity capacitycapacity capacity))))

100,000 kWh/h (sold out)

50,000 kWh/h 50,000 kWh/h50,000 kWh/h 50,000 kWh/h

((((reducedreducedreducedreduced withdrawal withdrawalwithdrawal withdrawal))))

- -

- 125,000 kWh/h

? ? ? ?

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Case 1 - Portfolio

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SHIPPER 3

Point/flow EllundEllund EntryEllundEllundEntryEntryEntry StorageStorageStorageStorage GTFGTFGTFGTF ETFETFETFETF BalanceBalanceBalanceBalance Booked capacity

Start

- - -

+ 100,000 kWh/h

+ 150,000 kWh/h

- 125,000 kWh/h

0

75,000 75,000 75,000

75,000 kWh/hkWh/hkWh/hkWh/h ((((reducedreducedreducedreduced withdrawal withdrawal withdrawal withdrawal))))

- - -

? ? ? ? ?

Case 1 - Portfolio

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CASE 2 - EARLY WARNING

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SHIPPER 1

Start

400,000 kWh/h 300,000 kWh/h 150,000 kWh/h (withdrawal)

- -

- 400,000 kWh/h

+ 200,000 kWh/h

+ 150,000 kWh/h

+ 50,000 kWh/h 0

Case 2: booked capacity - EW

- -

Case 2: hourly flow - EW

- 400,000 kWh/h

? ? ? ?

Case 2 – Portfolio – EARLY WARNING

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SHIPPER 2

Start

- -

- 250,000 kWh/h

+ 50,000 kWh/h + 100,000 kWh/h

+ 100,000 kWh/h

0

250,000 kWh/h (reduced capacity)

100,000 kWh/h 100,000 kWh/h - -

- 250,000 kWh/h

? ? ? ?

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Case 2 – Portfolio – EARLY WARNING

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SHIPPER 3

Start

150,000 kWh/h 150,000 kWh/h (withdrawal)

- - -

+ 100,000 kWh/h

+ 150,000 kWh/h

- 125,000 kWh/h

0

150,000 kWh/h 150,000 kWh/h - - -

? ? ? ? ?

Case 2 – Portfolio – EARLY WARNING

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CASE 2 - EMERGENCY

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SHIPPER 1

Day 1

- -

Case 2: hourly flow – Day 1

- 375,000 kWh/h

? 00 kWh/h00kWh/hkWh/hkWh/h ((((emptyemptyemptyempty storagestoragestorage))))storage

? 0

Case 2: booked capacity – Day 4

325,000 kWh/h 325,000 kWh/h325,000 kWh/h

- -

- 325,000 kWh/h

? 0 kWh/h ? ?

Case 2 – Portfolio – EMERGENCY

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SHIPPER 2

Day 1

((((reducedreducedreduced))))reduced

- -

Hourly flow – Day 1

- 100,000 kWh/h

? 00 kWh/h00kWh/hkWh/hkWh/h ((((emptyemptyemptyempty storagestoragestorage))))storage

? ?

- -

- 100,000 kWh/h

? 0 kWh/h ? ?

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Case 2 – Portfolio – EMERGENCY

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SHIPPER 3

Day 1

- - -

Hourly flow – Day 1

? 0 kWh/h0 kWh/h0 kWh/h0 kWh/h ((((emptyemptyempty storageemptystoragestoragestorage))))

? ? 0

150,000 kWh/h 150,000 kWh/h - - -

? 0 kWh/h ? ? ?