Information Projects

Purpose of the Information Projects:  to minimise information asymmetries to allow stakeholders to make informed decisions that will result in the efficent allocation of resources.
 
In the paper Gas Transmission Investment Programme-Structure and Scope, Gas Industry Co identified four Information Projects:
  • Vector's capacity determination;
  • Supply and demand outlook;
  • Transmission market disclosures; and
  • Backstop information gathering and analysis.

Currently Consulting On

Long Term Gas Supply and Demand Scenarios

Date Published: 04 July 2014

Gas Industry Co has released a draft study Long Term Gas Supply and Demand Scenarios for public feedback. The report has been authored by Concept Consulting, and it updates and extends the Supply/Demand Report published in March 2013.

This study analyses the main drivers for historical gas price and supply outcomes, and the factors that are likely to drive future outcomes. The aim is to provide stakeholders with a broader understanding of the key issues, which can be incorporated into their own decision making processes.

The study has two components: a written report that examines possible market state scenarios for future gas supply and demand; and an Excel-based model that analyses historical demand patterns and can be used to test future scenarios.

Three market supply scenarios are examined in the report: tight gas supply, moderate supply, and plentiful supply. Gas demand by sector is also projected for the petrochemical and power generation sectors, and for other gas uses combined. As peak demand is relevant to pipeline capacity and investment decisions, the report also projects peak demands for each scenario.

The model allows users to input their own assumptions regarding growth rates and to construct scenarios based on their views of such factors as gas supply, electricity generation demand, and carbon price.

 

 

We invite stakeholders and interested parties to provide feedback on the report and the model. We would be particularly interested in whether submitters consider:

  • Whether there are any omissions or inaccuracies in the information presented in the report
  • If the assumptions used are reasonable
  • Whether there are any aspects that would be useful to add to the model.

We ask that any feedback be provided by 5pm Friday, 15 August 2014.

 

Instructions

Visit https://drive.google.com/folderview?id=0B8Fpt8nHFgDZdU1VbzZ6M0pLcjA&usp=sharing and download both files. The model consists of an Excel file and a supporting Access database. The files are compatible with Excel 2007 (and above) and Access 2007 (and above).

Please note that both Gas_dem_sub.accdb and Gas_Dem_v32.xlsm must be downloaded into the same folder. (The Access database is locked but does not need to be open to run.) Also, both files should not be marked as Read-only (to check, right-click the file in the file list, click Properties, then make sure that the Read-only box on the General tab is not ticked).

Make a Submission

Gas Industry Co is currently accepting submissions on this discussion paper. Submissions can be made by registering with this website and uploading your submission. All submissions will be published on this website after the closing date. All submissions remain editable up to closure date.
Submissions Close: 2014-08-15 17:00

Previously Consulted On

Demand Management Study (March 2014)

Date Published: 01 July 2014

Investigation of possible scale of gas demand management on the Vector North system (5 March 2014)

Gas Industry Co commissioned JT Consulting to conduct a study to investigate the possible extent of demand management among large gas users located on the North pipeline of the Vector system. Demand management is a means by which congestion on a pipeline can be managed, by incentivising gas users to curtail their usage at times of high gas demand. The idea behind the study was to get a baseline indication of the potential amount of demand interruption that currently exists amongst large industrial consumers on the North pipeline.

Interviews were conducted with representatives of 15 of the largest gas consumers on the North pipeline, all of whom consume more than 100 TJ of gas annually. The group of consumers included electricity generators; manufacturers of food, building products, and steel; producers of fresh produce, and health services providers. Some of the interviewed consumers have more than one site on the North pipeline, so that the interviews covered 24 sites in total.

Interview respondents reported the ability to curtail a total of 8.3 TJ in a day, an amount that represents about 10.7% of their average daily gas consumption. If that average rate applied to all large consumers (defined here as consuming more than 50 TJ per year), then it would be possible to curtail about 5% of the largest peak usage experienced on the Rotowaro-North pipeline.

Amongst non-generation consumers, the average amount of curtailment possible is about 37.5%.

These results suggest that demand curtailment is an option worth pursuing in order to maximise the efficient usage of pipeline capacity. Interview respondents generally reported some interest in the possibility of curtailing gas usage in exchange for compensation.

 

Gas Supply and Demand Scenarios 2012-2027 (Updated - March 2013)

Amended Gas Supply and Demand Scenarios 2012 - 2027 (March 2013)

Concept Consulting has amended its gas supply and demand study to include an analysis of the demand on the Maui pipeline north of the Mokau compressor. Gas Industry Co has commissioned this addition in response to feedback on the original report. This analysis is contained in Appendix D of the revised report (note that the rest of the report remains unchanged). The analysis develops projections for annual and peak day demands on the Maui pipeline north of the Mokau compressor station, taking account of trends in generation demand, coal prices, and carbon dioxide prices.

The modelling tool has been updated to include the Maui pipeline analysis. To download the model, visit: https://docs.google.com/folder/d/0B8Fpt8nHFgDZdU1VbzZ6M0pLcjA/edit The model consists of an Excel file and a supporting Access database. The files are compatible with Excel 2007 (and above) and Access 2007 (and above).

Download Instructions

You will need to download the two files labelled 'Gas_dem_sum.accdb' and 'Gas_Dem_v22.xlsm', you can do this by clicking on them. The folder labelled '20121129 Release' contains the original model and database released in November 2012.

After you have clicked on the file name, you will need to click 'Download'. A window may appear stating it is too large to be scanned - click 'Download anyway'.

The Access file must be saved to the same folder as the Excel file for the model to work properly. Also, both files should not be marked as Read-only (to check, right-click the file in the file list, click Properties, then make sure that the Read-only box on the General tab is not ticked).

The Access document may open automatically and request a password but can be closed as it does not need to be open for the model to work; simply open the Excel file called Gas_Dem_v22.xlsm. The first tab in the Excel file consists of notes about the model and the second tab is a diagram of the model.

Gas Supply and Demand Scenarios 2012-2027 (September 2012)

Date Published: 06 September 2012

Gas Industry Co released a draft report, “Gas Supply and Demand Scenarios 2012 – 2027,” for public comment. The report was produced by Concept Consulting Group and was the first substantive look at gas supply and demand in New Zealand. Gas Industry Co commissioned the report to develop a set of national gas supply/demand scenarios, regional gas demand scenarios, and peak demand projections that can assist the industry and large users to assess the need for, and timing of, investment in pipeline infrastructure.

 
We sought public comment on the draft report, particularly in regard to the assumptions used in the analysis and the conclusions that the report reaches. Comments were accepted until 24 September 2012. Comments were incorporated into the final version of the modelling and the report.
 
A copy of the model is available online and will enable users to incorporate their own planning assumptions into the model and to use the modelled outputs to inform their business decision making. Instructions are at the end of this page.
 
Key draft findings from the report include:
On gas supply:
  • New Zealand’s gas supply position is stronger than it has been for many years, driven by the highest level of exploration effort seen for a long time, which in turn has been driven by high oil prices.
  • Greater gas availability in recent years has been reflected in softer wholesale gas prices relative to earlier levels (albeit above the ‘low gas price’ scenario). Current indications are that these conditions are likely to continue for some years.
On gas demand:
  • Long-term gas demand in New Zealand is likely to vary significantly between the different price scenarios, ranging from 250 PJ/year in the low price scenario down to 75 PJ/year in the high price scenario.
  • The sectors most sensitive to changes in wholesale gas prices are petrochemical manufacturing (especially methanol production) and power generation. The demand variability in response to gas prices – and therefore supply – acts as a ‘shock-absorber’ to the gas market, providing a volume market for gas when it is plentiful and relatively inexpensive, but reducing demand if reserves become scarce. This helps to underpin gas exploration and development activity and can provide a buffer to extend the remaining life of existing resources if reserves to production ratios start to decline.
  • Gas demand for other industrial, commercial and residential users is relatively steady across the scenarios, reflecting the relatively strong competitive position of gas versus alternative fuels for the provision of energy services.
On pipeline investment issues:
  • The existing pipeline system is expected to have sufficient capacity to accommodate the projected scenarios with higher demand, with the exception of Vector’s northern pipeline system (from central Waikato northwards), which has already reached its capacity limit during peak weeks, and it appears that some potential new gas demand is being suppressed in this region through an inability to secure pipeline capacity.
  • However, some gas users (e.g. power generators) appear to have relatively low cost options to reduce their usage during peak demand periods. If this potential can be harnessed, the need for costly new investment could be deferred for many years.
To download the model, visit:  https://docs.google.com/folder/d/0B8Fpt8nHFgDZdU1VbzZ6M0pLcjA/edit and download both files.  The model consists of an Excel file and a supporting Access database.  The files are compatible with Excel 2007 (and above) and Access 2007 (and above). 
Note that the Access file must be saved to the same folder as the Excel file for the model to work properly.  Also, both files should not be marked as Read-only (to check, right-click the file in the file list, click Properties, then make sure that the Read-only box on the General tab is not ticked). 
The Access document may open automatically but can be closed as it does not need to be open for the model to work; simply open the Excel file called Gas_Dem_v16.  An instruction sheet is on the first tab in the Excel file. 

Submissions received

Vector Pipeline Capacity Consultation

Date Published: 05 September 2012

Vector Ltd undertook consultation with industry participants as part of its process to determine available pipeline capacity, particularly as it relates to the North Pipeline. Details of this process are available on Vector's website

Backstop Information Gathering and Analysis Workstream

Date Published: 04 September 2012

The Backstop information gathering and analysis workstream is currently underway. The work is being pursued in parallel to the GTIP and will apply to all areas of Gas Industry Co's work. With respect to the GTIP, this information gathering process (or any regulation implemented for this purpose) has the potential to assist in the development of market arrangements - that could lead to improved availability of information in the market. More information on this work can be viewed here: Policy Development and Information Gathering