NDM Algorithm Consultation

Dear Customers and Industry Colleagues,

This update is to make you aware of an industry consultation currently in progress, particularly for those who may not have seen the communication issued by the Joint Office formally announcing this on 23rd October. In summary, Xoserve, as the Central Data Service Provider (CDSP), is seeking industry views on the future of the Non-Daily Metered (NDM) Algorithm and the sector it supports.

Background

Since the introduction of Unidentified Gas (UIG) which was part of the changes to the Gas Nomination and Allocation arrangements introduced as part of Project Nexus requirements, there has been a focus on the causes of UIG. This has naturally included investigating the current Non-Daily Metered (NDM) estimation Algorithm. One of the findings of the UIG Task Force was the benefits of utilising Machine Learning techniques in the NDM Algorithm.

More detail on the NDM Algorithm consultation is available here

Consultation Objectives

The four main objectives of the consultation are set out below:

• To gather quantitative information from a wide range of gas industry participants on the level of support for improvements in the Non-Daily Metered (NDM) gas allocation algorithm, including the use of Machine Learning techniques
• To gather additional information on whether there is a requirement to retain the existing NDM gas allocation formula and its component parameters
• To gather industry participants' views on the future direction of the NDM sector of the GB gas market to help assess the business case for changes to it
• To quantify any financial benefits of a reduction in UIG due to improvements in the NDM allocation algorithm

Industry Participation

We formally invited all industry parties to participate in the consultation by asking them to answer questions relating to the above objectives. Please find the Consultation Response Template here.

The responses received will help us understand the industry support for making changes from the current approach and to what extent. The closing date for submitting responses to the consultation questions is Friday 20^th November 2020.

As referenced in the ‘Consultation Response Template’, all responses should be sent to the CDSP using the Demand Estimation email box account and not to the Joint Office.

Next Steps

Once the Industry Consultation closes on Friday 20^th November, all responses received will be reviewed and summarised into an industry consultation response overview document, which will be published. The summarised consultation views will also be shared at various industry forums at the end of the year.

Depending on the findings from the consultation and the feedback received from the industry forums it is quite likely that the next steps will involve setting up a UNC Review Group to establish and evaluate options, develop implementation plan etc. This means although the industry consultation will close on 20^th November there will still be extensive industry engagement required to shape the future direction.

Further Information

Questions (and answers) raised by industry colleagues at recent consultation awareness briefings are available here along with the presentation material.

If you have any queries with the above please contact us, also using our Demand Estimation email box account.