Dear Customers and Industry Colleagues,
In late September the Unidentified Gas (UIG) Task Force published an executive summary of their initial Sprint 1 findings. The team is now pleased to share the most recent findings from Sprint 2.
Since the implementation of Project Nexus in June 2017, gas shippers have experienced much higher than expected absolute levels and volatility of UIG. This is severely affecting their ability to predict demand and commercially manage their businesses from an immediate cash-flow perspective, because UIG is reconciled (corrected) over an extended and unknown future period. In July 2018 Ofgem approved the UNC Modification 0658 to drive a more centralised and focused approach to the resolution of UIG, mandating Xoserve as the Central Data Service Provider to take on a leadership role on behalf of the industry. I’m pleased to confirm that the second sprint of the UIG Task Force completed earlier this week.
Sprint 2 Findings
The priority focus for Sprint 2 was to carry out a more detailed examination of the Non Daily Metered (NDM) algorithm, to understand which components bore a correlation to UIG volatility.
The findings indicate that the NDM formula is particularly sensitive to certain components of the Composite Weather Variable (CWV) – particularly temperature (including the wind-chill coefficient: the proportion of wind speed incorporated into CWV), day-on-day weather changes and within-day weightings in the Composite Weather Variable formula. On the other hand, other components, including wind speed and cold weather parameters, displayed little or no sensitivity to UIG. Contrary to our initial findings from Sprint 1, using a wider date range, we established that holiday factors are indeed working as intended and therefore not a UIG contributor.
Taken together, these findings have enabled us to significantly narrow down the field of our investigation on the algorithm, and now present clear parameters for Sprint 3. As a next step, the team will introduce more detailed and complex modelling to delve further into the current components linked to historic UIG volatility as well as introduce new components to the model. Our target for the end of Sprint 3 is to pinpoint the problem areas that are driving volatility. From there on, the focus of Sprints 4 to 6 will then shift from what is causing UIG extreme volatility to how we solve the problem through the identification of practical improvements to the algorithm. To set expectations, the interactions between different algorithm inputs makes identifying exactly how to resolve issues, without causing knock-on unwanted effects, a difficult modelling challenge. However, the team’s expertise is growing at an extremely fast pace and we do expect to make good progress through sprints 4 to 6 with the clear objective that the output will be actionable by Xoserve or through appropriate industry Modifications.
Other findings relating to base UIG indicate that known meter points in isolated status contribute only around 0.006% of throughput (these have now been passed to Xoserve’s Service Development team). While our initial analysis of Standard Conversion Factors for smaller sites does not suggest a direct correlation with UIG, other evidence we have received from Customers has led us to carry this forward into Sprint 3.
Please click here to see more detail on the full scope of Sprint 2.
We provide monthly updates at the DSC Change Management Committee. The Investigation Log on our website provides further detail on all Task Force activities, which from now on we will be publishing fortnightly on Fridays to coincide with the Executive Summaries of forthcoming sprints. If you have any further questions or comments, please contact us firstname.lastname@example.org.
Ranjit Patel – Chief Customer Officer