incentive to trade in the pipes are not available, secondary market, including: and so the Decreasing the uncertainty of combinatorial being bumped if an auction interruptible product is purchaser has nominated not of value. against their purchased Accessibility of the capacity. information Reduce the impact of being requirements bumped, or options to discussed, given most manage the risk of being of the information is bumped. available already, and Reduce the probability of other information will being bumped, or reduce the depend on the likelihood of being bumped. reporting and These ideas are detailed in monitoring Appendix B. framework. The team discussed the Options to reduce the appropriate prioritisation of probability of being scheduling, and intraday bumped until the nominations, of the various details of the Peak services available on a pipeline: Supply Guarantee are Firm products confirmed. As available products (AA) The timing of the Interruptible products (Int) auction to be discussed – including authorised with the auction overruns. mechanism. The auction products Preserving system Renominations of each. security. These were considered via an Investment incentives array of different scenarios, as detailed in the table in Appendix C. These scenarios were considered in the context that the timeline for the auction would be as follows: Shippers submit nominations to pipeline operator Pipeline operator runs schedule based on nominations, and determines capacity available for auction Auction is run Auction buyers nominate to pipeline operator Intraday nominations may be made on any service. In considering these scenarios, the team discussed: In practice as available services tend to be scheduled, but these could be limited for firm renominations depending on the contract details. The risk of no one contracting firm capacity on the pipeline if the auction product is too valuable, which would limit pipeline investment. However, this would limit the amount of auction product available. The of the auction product compared to the
incentive to trade in the secondary market, including: Decreasing the uncertainty of being bumped if an auction purchaser has nominated against their purchased capacity. Reduce the impact of being bumped, or options to manage the risk of being bumped. Reduce the probability of being bumped, or reduce the likelihood of being bumped. These ideas are detailed in Appendix B. The team discussed the appropriate prioritisation of scheduling, and intraday nominations, of the various services available on a pipeline: Firm products As available products (AA) Interruptible products (Int) – including authorised overruns. The auction products Renominations of each. These were considered via an array of different scenarios, as detailed in the table in Appendix C. These scenarios were considered in the context that the timeline for the auction would be as follows: Shippers submit nominations to pipeline operator Pipeline operator runs schedule based on nominations, and determines capacity available for auction Auction is run Auction buyers nominate to pipeline operator Intraday nominations may be made on any service. In considering these scenarios, the team discussed: In practice as available services tend to be scheduled, but these could be limited for firm renominations depending on the contract details. The risk of no one contracting firm capacity on the pipeline if the auction product is too valuable, which would limit pipeline investment. However, this would limit the amount of auction product available. The of the auction product compared to the pipes are not available, and so the combinatorial interruptible product is not of value. Accessibility of the information requirements discussed, given most of the information is available already, and other information will depend on the reporting and monitoring framework. Options to reduce the probability of being bumped until the details of the Peak Supply Guarantee are confirmed. The timing of the auction to be discussed with the auction mechanism. Preserving system security. Investment incentives