Unidentified Gas (UIG) is an issue in the gas sector. Effective management of UIG is essential for enabling shippers to exploit market opportunities, reduce costs and deliver value to customers.
Ofgem has approved Uniform Network Code Modification 0665. This Modification goes live on 1st October 2019, removing the Ratchet penalty charge for most of the existing Product Class 2 sites and replacing it with a fair ratchet regime for Product Class 2 sites. Removing the penalty charge will make it more feasible for shippers to migrate their sites into Product Class 2 to reduce their UIG costs.
Elsewhere in the industry the approved 2019/2020 AUGE Table, that also goes live on the 1st October 2019, reduces the Product Class 2 factors from the previous year by a factor of 10 compared with other Product Classes. For the majority of End User Category (EUC) bands, both Product Class 2 and 3 sites can receive lower proportions of the UIG cost smear. Product Classes 2 and 3 require sites to submit daily reads into settlements.
To date only 620 of the 7.5 million potential sites which could be benefiting from lower UIG costs via moving to Product Class 2 are doing so. Failure to understand or take advantage of the new arrangements will lead to competitors gaining first mover, cost reduction and competitive advantages.
Savings will need to be assessed against increased operational costs of managing daily reads into settlements.
Our Gas Experts can help you:
· Understand how to utilise the new arrangements
· Produce a cost benefit analysis for moving sites to Product Class 2 and 3
· Model, quantify and manage your UIG costs
· Improve operational performance
· Support the operational confirmation process
Our Gas Experts have decades of experience within the GB gas market arrangements and have successfully delivered several settlement and Unidentified Gas projects for gas shippers.
Contact our Gas experts today to discuss how we can help your business. We are experts in gas settlements and Unidentified Gas and have a proven track record of enabling our clients throughout the UK to deliver their strategic goals. Our clients trust us to deliver and value our flexible, collaborative and benefits driven approach.