VICTORIAN GAS OPERATIONS WINTER OUTLOOK 2013

April 2013 SLIDE 1

AGENDA

1:00 - 3:00 3:00 – 3:30 3:30 - 5:00 5:00 Session 1: • Introduction • AEMO’s Roles and Responsibilities • Weather Outlook • DTS Augmentations • Emergency Management Afternoon tea Session 2: • Operational Strategy • Market Operations Drinks SLIDE 2

INTRODUCTION - PRESENTED BY DAMIEN SANFORD SLIDE 3

WINTER STRATEGY Importance of Winter Strategy: • Winter is dynamic and volatile • Analysis of recent transmission augmentations • Preparation and training • Consistent and efficient operations • Supports a risk based approach to operating the DTS SLIDE 4

WINTER STRATEGY Benefits to industry: • Provides participants with: o ‘

what we do, and why

’ o o Peak day operational strategies • Provides confidence and assurance that: o Annual augmentation and system changes update AEMO will ensure system security is maintained throughout peak demand o o AEMO is prepared and ready to lead through winter AEMO has developed suitable contingency plans o AEMO will effectively manage emergencies as required • Highlights potential risks • Market transparency • Building/consolidating relationships SLIDE 5

AEMO’S ROLES AND RESPONSIBILITIES - PRESENTED BY DAMIEN SANFORD SLIDE 6

ROLES AND RESPONSIBILITIES • Mid 2012 organisational restructure • Gas System Operations renamed as Gas Real Time Operations o o Control room market and DTS operations Specialist Support o Victorian gas planning and maintenance coordination functions • Other org structure changes o AEMO consists of…… SLIDE 7

ROLES AND RESPONSIBILITIES SLIDE 8

ROLES AND RESPONSIBILITIES SLIDE 9

ROLES AND RESPONSIBILITIES Key responsibilities are: • Safe, Secure and Reliable Operation of the DTS • DTS project and maintenance coordination • DWGM operations • STTM operations • Emergency Management • Victorian gas planning SLIDE 10

KEY CONTACTS • Damien Sanford Senior Manager Gas RTO • Jian Ping Lu Manager Specialist Operations • Anthony Hill Manager Gas System Planning • Leigh Atkins Senior Gas Transmissions Engineer • AEMO Help Desk o General market enquiries SLIDE 11

WINTER WEATHER OUTLOOK - PRESENTED BY BOM ( & FORECASTING) SLIDE 12

DTS AUGMENTATION - PRESENTED BY APA SLIDE 13

EMERGENCY PROCEDURES (GAS) - PRESENTED BY GRAEME MANSON SLIDE 14

SCOPE 1. Emergency Procedures (Gas) 2. Definition of an emergency 3. Emergency planning responsibilities 4. Gas emergency levels 5. Emergency management structures 6. Identification and response 7. Authority to declare emergencies 8. Communication SLIDE 15

EMERGENCY PROCEDURES (GAS) SLIDE 16

EMERGENCY PROCEDURES (GAS) • The Emergency Procedures form part of the Gas Emergency Protocol (the Protocol) • National Gas (Victoria) Act 2008 requires AEMO to develop the Protocol • The Protocol consists of the following:   Emergency Procedures (Gas) Gas Load Curtailment and Gas Rationing and Recovery Guidelines  Wholesale Market System Security Procedures SLIDE 17

DEFINITION OF AN EMERGENCY SLIDE 18

EMERGENCY DEFINITIONS • Definition of emergency contained in NGR Rule 333 • An emergency is when AEMO reasonably believe there to be a situation which may threaten:   reliability of gas supply; or system security or the security of a declared distribution system; or  public safety • AEMO in its absolute discretion considers that the situation is an emergency and declares there to be an emergency; • AEMO declares there to be an emergency at the direction of a government authority authorised to give such directions SLIDE 19

EMERGENCY PLANNING RESPONSIBILITIES SLIDE 20

EMERGENCY PLANNING RESPONSIBILITIES • Participants have specific obligations with respect to emergency planning • These include:  the provision of information to AEMO, including emergency contact details and operational information during an emergency  ensuring staff, and where relevant customers, are aware of the Emergency Protocols  in developing their own safety procedures, ensuring they are consistent with the Emergency Protocol SLIDE 21

GAS EMERGENCY LEVELS SLIDE 22

GAS EMERGENCY LEVELS •

Level 1

– Site asset-based incident •

Level 2

– Operational response - single industry participant •

Level 3

– Operational and management response teams – single industry participant •

Level 4

– Impacts multiple industry Participants •

Level 5

invoked by AEMO, Energy Safe Victoria or the Governor in Council - System wide threat, public safety issue or powers •

Threat to System Security

SLIDE 23

EMERGENCY MANAGEMENT STRUCTURES SLIDE 24

EMERGENCY MANAGEMENT STRUCTURES • Victorian Government Emergency Management Structures • Gas Industry Specific Structures • AEMO Emergency Management Structures • Generic Structures of Registered Participants SLIDE 25

GAS INDUSTRY EMERGENCY MANAGEMENT STRUCTURES

Energy Industry Response Committee (EIRC) Gas Emergency Management Group (GEMG)

SLIDE 26

GAS INDUSTRY EMERGENCY MANAGEMENT STRUCTURES

Gas Emergency Management Consultative Forum (GEMCF)

SLIDE 27

AEMO EMERGENCY MANAGEMENT STRUCTURES • AEMO uses its existing management structures when dealing with gas emergencies in Victoria • Underpinned by a range of internal policies, procedures and communications platforms • EM methodology underpinned by AIIMS principles SLIDE 28

IDENTIFICATION AND RESPONSE SLIDE 29

IDENTIFICATION AND RESPONSE AEMO maintains its vigilance on the safety and security of supply of Victoria’s gas system through: • operation of a 24/7 Gas Control Centre • maintaining a Gas Duty Manager and Emergency Duty Officer • regular interaction and liaison with Registered participants and government departments, including emergency services • and weather forecasting processes SLIDE 30

IDENTIFICATION AND RESPONSE Keep Registered participants informed about the nature, extent and expected duration of emergencies, including updates of the emergency status as required through: • System Wide Notices (SWN) • Victorian Energy Emergency Communications Protocol (VEECP) SLIDE 31

IDENTIFICATION AND RESPONSE Expected that Registered participants will: • Advise all relevant officers, staff, and where required, its customers about the existence of and nature of the emergency • Adhere to the agreed industry processes for the identification, and notification of foreseeable and existing emergencies. SLIDE 32

IDENTIFICATION AND RESPONSE In the event that a likely or actual emergency is identified by AEMO, Registered participant, or government department, the following steps occur: • the identifying organisation notifies AEMO of any event or situation it becomes aware of • AEMO activates the VEECP • when an emergency arises, AEMO notifies ESV and advises Registered participants through a system wide notice • where emergency powers are invoked, each Registered participant complies with all emergency directions given by AEMO, ESV or government SLIDE 33

IDENTIFICATION AND RESPONSE In the event that a likely or actual emergency is identified by AEMO, Registered participant, or government department, the following steps occur: • AEMO will keep Registered participants informed of any material changes in the nature, extent and expected duration of an emergency through SWNs and the VEECP • an emergency will continue until such time as AEMO determines that the emergency has ended • AEMO must notify all Registered participants when it believes that the emergency has ended SLIDE 34

AUTHORITY TO DECLARE EMERGENCIES SLIDE 35

AUTHORITY TO DECLARE EMERGENCIES

AEMO

• AEMO may declare an

Emergency

or a

Security Threat to System

• AEMO derives its authority to declare an emergency and issue directions under the NGR and Section 91BC of the National Gas (South Australia) Act 2008

Energy Safe Victoria

• The Director of Energy Safety, ESV may also issue a direction under Section 107 of the Gas Safety Act 1997

Governor in Council

• The Governor in Council may declare an emergency under Part 9 of the Gas Industry Act 2001 SLIDE 36

COMMUNICATION SLIDE 37

COMMUNICATION • Communications systems and processes during emergencies are critical • AEMO uses existing business applications • Material changes in a situation can affect decisions – these need to be communicated quickly • AEMO and industry use agreed processes SLIDE 38

COMMUNICATION System wide notices (SWN): • AEMO uses Market Notices to keep Registered participants informed on changes that may impact the gas market • This includes the use of System Wide Notices (SWN) to Registered participants during an emergency SLIDE 39

COMMUNICATION Victorian Energy Emergency Communications Protocol (VEECP): • Developed by AEMO and Victorian energy industry stakeholders • Ensures timely and accurate advice and information is disseminated in a coordinated manner • Endorsed by the GEMCF and VEEC • Complements existing AEMO, industry and government emergency policies and procedures SLIDE 40

COMMUNICATION Single industry spokesperson (SIS) – media management: • Media are indispensable in the process of emergency management • Typically Victorian gas industry Registered participants would manage media relations for emergency Levels 1 to 4 • AEMO may communicate through the media for Levels 4 and 5, where the Single Industry Spokesperson (SIS) is invoked • SIS ensure a consistent message to the public during a gas emergency SLIDE 41

QUESTIONS?

SLIDE 42

Break

Please return by 3:30pm Coming up in Session 2 • Operational Strategy - presented by George Giannatos • Market Operation - presented by Luke Garland SLIDE 43

TRANSMISSION OPERATION - PRESENTED BY GEORGE GIANNATOS SLIDE 44

TRANSMISSION OPERATION Operations Overview • Declared Transmission System (DTS) • Facility Upgrades • Demand and Supply Outlook Operational Strategies • Managing Peak Demand Days • Longford to Melbourne Pipeline • South West Pipeline, including Brooklyn Operations • Northern System, including the NSW Interconnect SLIDE 45

DEMAND AND SUPPLY OUTLOOK DEFINITION • System Demand is the aggregate Tariff V and Tariff D consumption o Excludes Gas Powered Generation demand • In this presentation, Total Demand in the DTS is the aggregate of: o System Demand o Gas Powered Generation demand SLIDE 46

DECLARED TRANSMISSION SYSTEM

Culcairn Maryborough Bendigo Koonoomoo Echuca Wodonga Springhurst CS Pipeline Euroa CS

Longford Pipeline South West Pipeline Northern Pipeline

Wandong Transportation Capacity TJ / day

1,030 353* 120

Export Capacity TJ / day

See Below* 129 44 - 92

Wollert CS Ballarat Iona CS Brooklyn - Lara Pipeline Portland Lara Iona SEAGas Otway Mortlake Geelong Sunbury Plumpton Melbourne Dandenong

• The Maximum SWP Injection is 370 TJ/day due to demand in the Western Transmission System

Gooding CS Brooklyn CS Bass Gas LNG

Approx 70% of winter system demand

Vic Hub Longford

SLIDE 47

FACILITY UPGRADES

What/where

Brooklyn Ballan Pressure Regulating • Station: Reconfigured to flow gas directly from BLP to BBP • Sunbury Looping (WORM stage 1): New pipeline connecting BLP to the Sunbury pipeline at Plumpton • Euroa CS: A new bi-directional Centaur 50 compressor

Handover

December 2012

Operations impact

June 2012 Increased security of supply at locations along the Ballarat and Sunbury pipelines October 2012 • • • Wandong Heater Installed and Commissioned preheater at Wandong November 2012 • Increases export capacity to NSW by approx. 20 TJs Increased import capacity, unlikely for normal Winter operations Improves the Northern zone operational flexibility during NSW exports SLIDE 48

DEMAND AND SUPPLY OUTLOOK DEMAND System Demand • The winter 2013 peak day system demand forecast is similar to forecast demand during the previous winter.

Year 1 in 2 peak day 1 in 20 peak day

Winter 2013 Forecast System Demand (TJ/Day) Winter 2013 Forecast (EDD) Winter 2012 Forecast System Demand (TJ/Day) Winter 2012 Forecast (EDD) 1,149 14.2

1,162 14.6

1,270 16.5

1,280 16.8

Actual System Demand

Year

2012 2011 2010 2009

EDD

12.1

14.8

13.9

14.4

Highest Demand Day

1,092 1,145 1,182 1,170 SLIDE 49

DEMAND SUPPLY OUTLOOK – GPG Gas Powered Generation (GPG) Outlook • The daily average GPG demand is low for the last 3 years during months May to September • This is approximately 15% of the daily average GPG demand in years 2007 and 2008 • There are no indicators that the GPG demand will be any different to the previous 3 years • AEMO has processes to manage any unexpected GPG demand in the DTS. 70 30 20 10 0 60 50 40 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2010 2011 2012 2013 SLIDE 50

OPERATIONS OVERVIEW Demand and Supply Outlook – Supply Maximum supply capacities from each region:

Supply Source

Esso Longford VicHub BassGas Iona UGS SEAGas Otway Mortlake Culcairn Total (excluding LNG)

Maximum Available Supply (TJ/day) Estimated Available Supply (TJ/day)

1,198 67 900 55

Maximum Transportation Capacity (TJ/day)

1,030 NOTE: These capacities are only achievable under ideal conditions and if scheduled from the beginning of the day.

631 65 1,961 370 50 1,375 370 120 1,350 1 1 As pipelines approach their capacities, they each back the other pipeline off, resulting in a net reduction of system capacity.

SLIDE 51

OPERATIONAL STRATEGIES - Managing Peak Demand Days - Longford to Melbourne Pipeline - South West Pipeline - Northern Zone SLIDE 52

OPERATIONAL STRATEGIES

Key Goal Operational Strategy

Reducing likelihood of curtailment Managing the supply vs demand balance Managing Peak Demand Days Longford Pipeline Strategy Managing high injections South West Pipeline in SWP to support winter Strategy demand Supporting withdrawals Northern Pipeline to NSW via Culcairn Strategy SLIDE 53

MANAGING PEAK DEMAND DAYS Challenges: • Forecast uncertainties • Linepack management Strategies: • Prioritisation of peak shaving injections • Early warning notifications • Longford injection profiling SLIDE 54

MANAGING PEAK DEMAND DAYS • • Forecast uncertainties are due to: Unexpected weather deterioration Sudden change from the forecast GPG demand : Under-forecasting example

6am 10am 2pm 6pm 10pm

EDD System Forecast GPG Forecast Total 52,0 50,0 48,0 46,0 44,0 42,0 40,0 38,0

4 TJ/hr

11.4

952 65 11.8

970 65 13.4

60 13.5

1,044 1,046 1,053 64 13.7

64 1,018 1,035 1,105 1,110 1,117 • • • • Under-forecast by 100 TJ at the BoD (approximately 4 TJ/hr) Low GPG demand, with accurate forecast Lost about 29 TJ linepack prior to the evening peak (6pm) Equivalent to 5 hour firm-rate LNG vapourisation of 100 tonnes/hour (5.5 TJ/hr) SLIDE 55 Actual Forecast Perfect Forecast

MANAGING PEAK DEMAND DAYS Perfect Forecast 90,0 75,0 60,0 45,0 30,0 15,0 0,0 06:00 10:00 Total Demand 14:00 Injection 18:00 LP Maximum 22:00 LP Minimum 02:00 Linepack 06:00 800 750 700 650 600 550 500 90,0 75,0 60,0 45,0 30,0 15,0 0,0 06:00 Actual Forecast 10:00 Total Demand 14:00 Revised Inj 18:00 LP Maximum 22:00 02:00 LP Minimum 800 750 700 650 600 06:00 Revised LP 550 500 • Injection rate increases • Linepack is depleted throughout afternoon • More LNG required SLIDE 56

MANAGING PEAK DEMAND DAYS • Supplying Peak Demand: o Utilising all

available

linepack prior to scheduling any peak shaving gas injections o Injecting LNG up to 100 tonne/hour (5.5 TJ/Hr) to support peak demand o Reduce compression at Wollert CS before vaporising non-firm LNG • Early Warning Notification: o Providing early warning to the market when there is increased potential for curtailment • Intra-day ESSO Injection Profiling: o Only applied when total demand ≥ 1,150 TJ/Day SLIDE 57

LONGFORD PIPELINE STRATEGY • • • When there is forecasted high Longford pressure: Balance system linepack using Wollert CS and/or Brooklyn facilities Gooding compression to reduce pressures at Longford Communicate strategy with Longford • • • • When DCG forecast pressure is low: Utilise available linepack Inject firm rate LNG Reduce Wollert compression Inject non-firm LNG

Wollert CS Dandenong (DCG) LNG Bass Gas Gooding CS Vic Hub Longford

SLIDE 58

SOUTH WEST PIPELINE STRATEGY SWP = Iona to Lara Pipeline + Brooklyn to Lara Pipeline The reconfigured SWP system • Sunbury pipeline supplied directly via the BLP

Ballarat

• The inlet pipework to the Brooklyn Ballan PRS is from the BLP

Iona CS

• Expected reduced requirement for Brooklyn

Portland

compression to Ballarat during winter

Iona SEAGas Otway Mortlake

• Without large Iona injections Brooklyn compression is required

Geelong Brooklyn Lara Pipeline Lara Sunbury Plumpton Brooklyn CS

SLIDE 59

SOUTH WEST PIPELINE STRATEGY SWP = Iona to Lara Pipeline + Brooklyn to Lara Pipeline 400 350 300 250 200 150 100 50 0 -50 янв -100 фев мар

Net Injection at Iona

апр май июн июл

Month

авг сен окт ноя дек Year 2012 Year 2013 • • The change in injection rate can be large between scheduling horizons / gas days Operational challenge to manage SWP linepack • BLP CG Inlet minimum pressure limited to 4,500 kPa • Operational pressure at Iona varies depending on the injection rate at Iona The injections into the SWP are expected to be close to the transportation capacity for high demand days.

SLIDE 60

SOUTH WEST PIPELINE STRATEGY • • To achieve the EoD linepack target for various Iona injection rates, Iona pressure must increase/decrease accordingly Example: based on a flat injection rate of 280 TJ/day, the operational EoD pressure target is 8,500 kPa, with 23 TJ usable linepack Iona Injection Impact 10 000 9 500 9 000 8 500 8 000 7 500 7 000 6 500 6 000 5 500 5 000 130 160 190 220 Iona Injection Rate (TJ/day) 250 280 310 340 25 20 15 10 5 0 45 40 35 30 SLIDE 61

SOUTH WEST PIPELINE STRATEGY • The usable linepack in SWP diminishes when Iona injection rate approaches the SWP design capacity • The usable linepack is the function of flow rate Injection rate  Usable linepack  10,000 9,000 8,000 7,000 6,000 5,000 4,000 10 SLIDE 62

NORTHERN PIPELINE STRATEGY • The Euroa compressor station has increased transportation capacity through the NSW-VIC Interconnect at Culcairn • The Wandong heater Improves the Northern zone operational flexibility during NSW exports and linepack management SLIDE 63

NORTHERN PIPELINE STRATEGY • Wollert CS: o o Supporting northern system demand Supporting Culcairn withdrawals o Movement of linepack into Northern zone to aid in reducing Longford pressure • Euroa CS: o Provides a higher suction pressure to Springhurst CS to transport large exports to NSW when required o Euroa compressor station increases export transportation capacity by approximately 20 TJs when run in conjunction with Wollert and Springhurst compression • Springhurst CS: o When required, provides high operational pressure at Culcairn to support withdrawal SLIDE 64

NORTHERN PIPELINE STRATEGY • • • Culcairn Withdrawal Increased exports to NSW compared to the same time in 2012 AEMO is prepared for higher exports during winter 2013 if this trend continues Northern compression will be operated through the evening peak period when required to support Culcairn withdrawals Net Withdrawal at Culcairn 100 80 60 40 20 0 -20 -40 янв фев мар апр май июн июл авг сен окт ноя дек Year 2012 Year 2013 SLIDE 65

SUMMARY Operational strategies • Managing Peak Demand Days • Longford Pipeline • South West Pipeline • Northern zone Conclusion • Many similarities to winter 2012 • Similar demand forecast • Increased system security from augmentations AEMO is confident that the operational strategies are suitable, effective, and will result in effective operations for winter 2013.

SLIDE 66

QUESTIONS?

SLIDE 67

MARKET OPERATION - PRESENTED BY LUKE GARLAND SLIDE 68

MARKET OPERATION o o o o Constraints Managing Peak Demand Market Communications Demand Forecast Override Methodology SLIDE 69

CONSTRAINTS

- Constraints (SDPC/DFPC) - Supply source constraint (SSC) - Net flow transportation constraint (NFTC) SLIDE 70

CONSTRAINTS (SDPC/DFPC) Application: • To reflect physical injection/withdrawal capability Triggers: • Facility operator initiated: o o temporary production slow down Interconnected pipeline operational pressure constraint o planned maintenance o plant/facility trip • AEMO initiated: o o o transmission system capability gas quality consideration emergency requirement SLIDE 71

CONSTRAINTS (SDPC/DFPC) Facility Operator Notification Process: • Advised to AEMO by facility operator o Clear and accurate information is crucial. AEMO will attempt to clarify any uncertainties o If time permits, the constraint will be applied from

next applicable scheduling horizon

• For maintenance, constraint to be applied o o Partial Day – MHQ set to zero for duration of outage Full Day – AEMO expects Market Participants to bid in good faith, and reflect plant outages within their bidding SLIDE 72

CONSTRAINTS (SDPC/DFPC)

Required Constraint Information:

• Applicable MIRN/MIRNs • Description and reason for constraint • Commencement and end time • Hourly flow (profile) limitation and/or daily constraint • For a DFPC, specify net injection or net withdrawal Note: • DFPC is another form of SDPC, which applies at a paired injection and withdrawal meters, to maximise financial flow at the meters • Financial flow at a paired meters will be supported

only when

a facility is in operation SLIDE 73

CONSTRAINTS (SDPC/DFPC) Assessment of Constraints:

Quality of information is crucial. AEMO requires timely details of the event to be confirmed prior to applying constraint over the next horizon(s).

Facility operator Notifies AEMO of constraint request Clear information?

Threat to System Security?

Monitor system & attempt to clarify with facility operator Apply constraint in next scheduling horizon(s).

Send out SWN Immediate Threat?

Apply constraint in next scheduling horizon(s).

Send out SWN AEMO declares the threat, and runs ad-hoc schedule with constraint.

Send out SWN

SLIDE 74

SUPPLY SOURCE CONSTRAINTS (SSC) • Purpose to reflect gas producer injection capability, where o Multiple supply sources exist at a single injection point; and o The facility operator will

cease to inject

gas (from one of the supply sources) into the DTS, if the supply source fails to inject gas o MP must have registered to utilise this constraint via accreditation application • Current status o This feature was implemented before winter 2011 o No Market Participants have registered to utilise this feature SLIDE 75

NET FLOW TRANSPORTATION CONSTRAINT (NFTC) Application: o Apply across

all injection and withdrawal points

or more) at the same location (three o Reflect the total net injection/withdrawal capacity of a pipeline such as the SWP Benefit: o Scheduled net injection or withdrawal that reflects the physically capability o Ensure correct tie-breaking to Market Participants across all injection/withdrawal points covered by the NFTC grouping SLIDE 76

MANAGING PEAK DEMAND

- Injection Profiling - Culcairn Scheduling Methodology - LNG Dispatch SLIDE 77

INJECTION PROFILING Injection profiling at Longford: • This process is triggered when the 2nd Day+1 schedule total demand forecast exceeds

1,150 TJ/day

• The process

includes consultation

with both ESSO and Jemena. • Minimum Hourly Quantity (MinHQ) is applied through an SDPC “forcing” increased injection rate by up to 2 TJ/hr for the first 14 hours SLIDE 78

INJECTION PROFILING System security benefit: •

Increases

system security margins on peak days by increasing system usable linepack prior to the evening peak • Ultimately

reduces

likelihood of curtailment by reserving LNG peak shaving capacity for forecast uncertanties Market impact: • Profiling injection will result in

no impact

on either imbalance or deviation payments • AEMO expects this strategy will be

utilised infrequently

SLIDE 79

INJECTION PROFILING Scheduled Injection Profile: 46,0 44,0 42,0 40,0 38,0 36,0 34,0 32,0 30,0 06:00 10:00 Flat Injection 14:00 18:00 Profiled Injection 22:00 02:00 06:00 Hour • • • Profile: Flat schedule Profiled if demand ≥ 1,150 TJ/day Allows for 18:00 schedule changes SLIDE 80

CULCAIRN SCHEDULING METHODOLOGY • The Culcairn scheduling methodology was adapted in consultation with the Gas Wholesale Consultative Forum (GWCF) • Papers were tabled during 2010 detailing the methodology / strategy under the following conditions: o o Normal operational conditions Scheduling out-of-merit-order LNG up to firm rate o Abnormal operational conditions SLIDE 81

CULCAIRN SCHEDULING METHODOLOGY • Under

normal

operational conditions, AEMO will schedule net withdrawal through Culcairn up to the capacity defined in the VAPR, or as requested by APA Operations, to reflect a constraint within NSW o o Capacity will be assessed on an hourly timescale Market will be notified of SDPC application (with a reason)

Culcairn Daily Export (TJ)

100 90 80 70 60 50 40 30 20 10 0 450 500 550 600 650 700 750 800 850 900 950 Forecast Daily System Demand excluding GPG (TJ)

CULCAIRN SCHEDULING METHODOLOGY • Scheduling out-of-merit-order LNG up to firm rate o up to 100 tonne/hour (5.5 TJ/hour) of LNG will be used prior to and during the evening peak if metropolitan pressures are forecast to fall below minimum o Wollert compression will be reduced or shutdown to maintain metropolitan pressures above minimum SLIDE 83

CULCAIRN SCHEDULING METHODOLOGY • An abnormal condition is when the system is not capable of transporting the capacity defined in the VAPR • If an abnormal condition exists: o o AEMO will notify the market via a system wide notice (SWN) and advise APA Culcairn operations of the revised capacity • Abnormal conditions may include: o AEMO will determine the available withdrawal capacity and apply a constraint Facility failure o More than 100 tonnes/hour (5.5 TJ/hour) of LNG vaporisation o A threat to system security SLIDE 84

LNG DISPATCH Market Response (merit order injection): • Injection

scheduled flat

across remainder of gas day

Note

: AEMO may profile LNG for system security reasons • When hourly scheduled injections < minimum plant flow This is a commercial decision for MPs / APA regarding how or if to flow Operational Response: •

Advance notice is provided to APA

when increased probability of LNG identified • Scheduling to occur with consideration for LNG plant operating limitations AEMO will notify APA whether the LNG schedule is a

market response or an operational response

SLIDE 85

LNG DISPATCH • For an operational response, the requirement for LNG is identified by AEMO through: o Market Clearing Engine (MCE) o o o Mass Balance Gregg Model Rate of Pressure Decline • The quantity and timing of LNG is determined through: o o The use of the above forecasting tools Operational judgement Unlike other injection sources, AEMO provides LNG scheduling instructions directly to APA Dandenong SLIDE 86

LNG DISPATCH Scheduling LNG as an

operational response

: • At first and last hours, LNG will be schedule at approx. 50% rate of required quantity for other hours, or no more than 5 TJ/hr • LNG flow is scheduled at up to 100 tonne/hr (5.5 TJ/hr) firm rate. Additional

non-firm supply

may be scheduled as necessary up to 150 tonne/hr (8.2 TJ/hr), and in extreme cases up to 180 tonne/hr (9.9 TJ/hr) • LNG injection profile to extend across multiple horizons. This provides APA a schedule to continue flow into the following horizon • AEMO may increase/decrease the LNG scheduled quantity at the start of the next horizon. AEMO will endeavour to update APA half an hour prior to beginning the next scheduling horizon of any expected material changes SLIDE 87

LNG DISPATCH LNG Operational Response Injection Profile: 12,0 10,0 8,0 6,0 4,0 2,0 0,0 16:00 17:00 LNG Schedule 18:00 19:00 20:00 21:00 maximum 1st / last hour 22:00 23:00 Maximum Rate 00:00 Hour • • • Scheduling: First hour ≤ 5 TJ/hour Last hour ≤ 5 TJ/hour Extends across multiple horizons SLIDE 88

MARKET COMMUNICATIONS

- Market Notifications - Schedule confirmation process SLIDE 89

MARKET COMMUNICATIONS The following notification processes will be used: • Via SWN/SMS, which includes: o SDPC / DFPC / NFTC constraint notices o o o o Low linepack reserve notice High rate change of EDD increase Running an ad hoc schedule Schedule confirmation discrepancies • Via Email: o Intra Day Demand / Supply Shortfall Likelihood Available via request, contact [email protected] SLIDE 90

MARKET NOTIFICATION – LOW LINEPACK RESERVE • Example SWN/SMS o

Red:

Priority RED – Extreme Low Linepack Reserve – LNG requested above 100 t/hr at XX:XX hours Priority RED – XXX t/hour of requested LNG cannot be supplied, XXX t/hr available for supply at XX:XX hours

o

Amber:

Priority AMBER – Low Linepack Reserve – LNG requested up to 100 t/hr at XX:XX hours

o

Green:

Priority GREEN – Supply Reserves Manageable – No LNG requested

SLIDE 91

MARKET NOTIFICATION – EDD RAPID INCREASE • This SWN is triggered if the EDD is above 14.0 °C and increases by 1.0 °C between scheduling intervals • Example SWN/SMS

EDD increase alert, since the last schedule the EDD has increased from XX to XX

SLIDE 92

MARKET NOTIFICATION – AD HOC SCHEDULE • The ad-hoc scheduling process is triggered when a supply/demand imbalance is identified that cannot wait until the next scheduling window • AEMO will

declare

a threat to system security

prior to publishing

an ad-hoc schedule • Example SWN/SMS

Be advised that there is a Threat to System Security due to or .

SLIDE 93

MARKET NOTIFICATION – SUPPLY SHORTFALL • Demand/Supply Shortfall Likelihood Notification, triggered for current day only once total demand forecast > 1,150 TJ/d • Example Email Available via request, contact [email protected]

SLIDE 94

MARKET NOTIFICATION – DEMAND/SUPPLY FORECAST • Example Email SLIDE 95

CONFIRMATION PROCESS Market Participants Nominations

Facility Operator Confirmation Process Nomination vs.

Schedule MP 1 MP 2 MP 3 Bids, Demand Forecasts etc

Market Participants

AEMO Scheduling Instruction AEMO

SLIDE 96

CONFIRMATION PROCESS • Issues can arise when comparing scheduled quantities against MPs nominations o On identifying a difference in quantity as material (e.g. ≥ 20TJ), AEMO’s first step would be to contact the respective gas plant or facility operator seeking clarification o If the plant or facility operator cannot vary their injections due to contractual obligations, then AEMO will

publish a SWN

seeking an update in nominations for a specific injection point • Example SWN/SMS

MPs please confirm the noms for dd/mm/yy schedule at [meter]. The confirmation process identified significant difference from the schedule

SLIDE 97

CONFIRMATION PROCESS • If the subsequent market response fails to resolve the material discrepancy at the next scheduling horizon (or less if system conditions warrant it), AEMO will publish another SWN requesting MPs to advise AEMO of: o o Quantities from the MIBB Facility nominations o If applicable, the reason for any discrepancy • If the discrepancy is not corrected and AEMO believes that the situation will lead to a threat to system security, AEMO will take whatever action is necessary to rectify the problem

Note

: This process is only used for current gas day SLIDE 98

AEMO DEMAND FORECAST OVERRIDE METHODOLOGY

SLIDE 99

DEMAND FORECAST OVERRIDE METHODOLOGY • A paper to the GWCF has been presented noting the changes to the demand forecast override methodology which include: o That the thresholds, factors & weather condition inputs into override will change o The new methodology will take into account profile shape of Total Demand, including GPG o Will only be an override to prevent threats to system security developing Overrides Up Overrides Down Total Overrides Old Methodology for 2012 9 112 121 New Methodology for 2012 5 14 19 SLIDE 100

QUESTIONS?

SLIDE 101