Constraint management actions

National Gas use a range of tools to manage gas network constraints. These are described in the System Management Principles Statement. Several of these tools involve capacity constraint management, which aim to resolve the constraint by optioneering capacity rights and bookings. 

Some of the constraint management tools are listed below.

• Short-term System Flexibility: NTS Users can request and utilise short-term system flexibility via submission of their Offtake Profile Notifications (OPNs). In a situation where there is a constraint or forecasted constraint, it may not be possible to accommodate requests for additional flexibility. National Gas will notify users of this via Active Notification System (ANS) messages, stating the affected exit zone(s). Find out more about our Short-Term System Flexibility Allocation Methodology.  
• Offtake Flow Reductions (Exit only): National Gas may request an Offtake Flow Reduction to reduce demand for a set period of time at selected NTS Exit Points. Users will be invited to submit these offers and these will be accepted as required by National Gas. Find out more about the Offtake Flow Reduction Process.
• Capacity Scalebacks: Interruptible (Entry) or Off-peak (Exit) capacity is purchased at a discounted rate as it is capacity that is not financially or contractually guaranteed. National Gas may scale back Users’ Interruptible / Off-Peak capacity in the event of a constraint or forecasted constraint. Scaled back capacity may be restored once the constraint has been resolved. Find out more about the Off-Peak/Interruptible Capacity Scaleback and Restoration Process.  
• Locational Energy Trades: Locational Energy Trades allow National Gas to address localised supply and demand imbalances on the network. A physical change is expected on the network following the Locational Energy Trade, which aims to mitigate any actual or forecasted constraint. Users will be invited via an ANS message to offer these trades and National Gas will accept these in line with their constraint management strategy. Read our Operational Guidance Material for Locational Trades for more information.
• Firm capacity surrender (Buy Back): Firm capacity is financially and contractually guaranteed to be available. In the event of a constraint or forecasted constraint, National Gas may request to buy this capacity back. Users will be invited to submit offers to surrender their Firm capacity and National Gas will accept these offers as appropriate to help alleviate the constraint. Find out more about the Firm Capacity Surrender Process.

Constraint management incentives

National Gas are incentivised to minimise the cost and frequency of capacity constraint events, while maximising the release of capacity. This benefits our customers because it reduces consumer exposure to constraint costs and increases market access to entry and exit capacity. Performance is measured against an annual constraint cost target, with cap and collar limits to provide levels of incentive exposure.

Why Capacity Constraints Occur

National Gas are obliged to release entry and exit capacity at levels equivalent to around twice peak demand. These levels of gas flow cannot be physically accommodated simultaneously across the network, resulting in the system carrying an inherent constraint risk that must be carefully managed. ​

To manage these risks to asset reliability, maintenance requirements and variations in flow patterns, a combination of the following options are used;

• operational rules
• physical tools
• commercial mechanisms
• asset investment

The incentive balance

National Gas are incentivised to maximise capacity release and receive revenue through the incentive mechanism for the sale of non-obligated capacity products. However, if too much capacity is sold relative to network capability, this can lead to the use of financial constraint management actions, which impeded the incentive outturn.

Balancing these factors ensures the release of as much capacity as possible, whilst efficiently managing the associated risks and costs for consumers.