Constraint management actions 

National Gas use a range of tools to manage gas network constraints. These are described in the System Management Principles Statement. Several of these tools involve capacity constraint management, which aim to resolve the constraint by optioneering capacity rights and bookings.  

Some of the constraint management tools are listed below: 

Short-term System Flexibility  

NTS Users can request and utilise short-term system flexibility via submission of their Offtake Profile Notifications (OPNs). In a situation where there is a constraint or forecasted constraint, it may not be possible to accommodate requests for additional flexibility. National Gas will notify users of this via ANS messages stating the affected exit zone(s). Find out more about our Short-Term System Flexibility Allocation Methodology.  

Offtake Flow Reductions (Exit only) 

National Gas may request an Offtake Flow Reduction to reduce demand for a set period of time at selected NTS Exit Points. Users will be invited to submit these offers and these will be accepted as required by National Gas. 

More information is available in our Offtake Flow Reduction Process. 

Capacity Scalebacks 

Interruptible (Entry) or Off-Peak (Exit) capacity is purchased at a discounted rate as it is capacity that is not financially or contractually guaranteed. National Gas may scaleback Users’ Interruptible / Off‑Peak capacity in the event of a constraint or a forecasted constraint. Scaled‑back capacity may be restored once the constraint has been resolved. 

Further details can be found in our Off‑Peak/Interruptible Capacity Scaleback and Restoration Process. 

Locational Energy Trades 

Locational Energy Trades allow National Gas to address localised supply and demand imbalances on the network. A physical change is expected on the network following the Locational Energy Trade, which aims to mitigate any actual or forecasted constraint.  Users will be invited via an ANS message to offer these trades, and National Gas will accept in line with their constraint management strategy. 

Read our Operational Guidance Material for Locational Trades for more information.  

Firm Capacity Surrender (Buy Back) 

Firm capacity is financially and contractually guaranteed to be available. In the event of a constraint or forecasted constraint, National Gas may request to buy this capacity back. Users will be invited to submit offers to surrender their Firm capacity and National Gas will accept these offers as appropriate to help alleviate the constraint. 

More information is available in our Firm Capacity Surrender Process.

Capacity Constraint Incentive Framework 

National Gas are incentivised to minimise the cost and frequency of capacity constraint events, while maximising the release of capacity. This benefits our customers because it reduces consumer exposure to constraint costs and increases market access to entry and exit capacity.  Performance is measured against an annual constraint cost target, with incentive cap and collar limits to provide levels of incentive exposure. 

Why Capacity Constraints Occur 

National Gas are obligated to make both entry and exit capacity available at levels equivalent to around twice peak demand. These levels of gas flow cannot physically be accommodated simultaneously across the network, resulting in an inherent constraint risk that must be carefully managed. 

To manage these risks to asset reliability, maintenance requirements, and variations in flow patterns a combination of the following options are used: 

• Operational rules 
• Physical tools 
• Commercial mechanisms 
• Asset investment  

The incentive balance 

We are incentivised to maximise capacity release and receive revenue through the incentive mechanism for the sale of non-obligated capacity products. However, if too much capacity is sold relative to network capability, this can lead to the use of financial constraint management actions, which impedes the incentive outturn.  

Balancing these factors ensures the release of as much capacity as possible, whilst efficiently managing the associated risks and costs for consumers Incentive Parameters. ​ 

Performance will be measured through comparison of actual annual constraint costs against a performance measure. We receive an incentive revenue or penalty depending on whether the annual actual net costs are higher or lower than the incentive target for that year and is based on a calculation that incorporates the Sharing and Scaling Factors. 

• Target = £6.7m 

• Value = +£5.2m to -£5.2m 

• Sharing Factor = 39% NGG, 61% Shippers is passed back to Shippers

• (14% scaling for revenues from non-obligated capacity sales)