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Rarely used (1-2 p.a.) as information quickly becomes out of date and timescales are longer than for formal application process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