Dear Customers and Industry Colleagues,
Following our commitment at the last DSC Contract Management meeting, we are now in a position to share an executive summary of our progress and findings to date from the Xoserve-led Unidentified Gas (UIG) Task Force.
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 focussed 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 first sprint of the UIG Task Force, which prioritised a diagnostic of the underlying volatility of UIG and understanding the shoulder months, has recently completed.
Sprint 1 Findings
In Sprint 1 the Task Force carried out a range of investigations, which have led us to identify several potential drivers of volatility of varying impact. Our most significant findings were that components of the NDM algorithm appear to be strongly correlated with UIG. These findings suggest that the UIG algorithm does not react quickly enough to significant day-on-day weather changes, and that holiday factors do not reflect real usage patterns. Additional modelling is now needed to further substantiate and quantify these findings. Conversely, the analysis confirmed that the weekend vs. weekday component of the algorithm has no correlation to UIG.
In Sprint 2 we will therefore continue the most promising current lines of investigation to validate early findings by the use of data across a wider date range. In addition to this, Sprint 2 will also incorporate new areas of investigations to quantify additional UIG causes; the accuracy of DM Nominations, the role of standard conversion factors and the NDM sample data set.
Click here to see more detail on the full scope Sprint 1.
We are providing monthly updates at the DSC Change Management Committee. The Investigation Log on our website provides further detail on all Task Force activities. If you have any further questions or comments, please contact us email@example.com.
Ranjit Patel – Chief Customer Officer