NDM Nominations and Allocations

What are NDM Nominations and Allocations?

Every day, we calculate “bottom-up” estimates of gas demand for the Non-Daily Metered (NDM) population. These are sites that aren’t required to submit daily meter readings.

Key inputs that we use for this calculation are Annual Quantity (AQ), weather factors and Gas Demand Profiles derived from the Demand Estimation process.

These estimates come in two categories:

• NDM Nominations are forecasts of demand ahead of the Gas Day
  
  
• NDM Allocations are estimates of demand after the Gas Day

NDM Nominations explained

We do nine NDM Nomination runs for each Gas Day (D).

D-1 at 11am; D-1 at 1pm; D-1 at 4pm; D at 12am; D at 10am; D at 1pm; D at 4pm; D at 9pm; and D+1 at 12am

Estimates of NDM demand are usually more accurate in later runs.

This is because the later calculations use more actual observations of the weather – and fewer forecasts.

NDM Allocations explained

There are five NDM Allocation runs. As they run after the Gas Day, they’re all based on actual observations of the weather.

Allocation runs happen at:

D+1 at 7pm; D+2 at 7pm; D+3 at 7pm; D+4 at 7pm; and D+5 at 7pm

It is rare for the NDM Allocation value calculated at D+1 to change

How we calculate NDM demand

The formula we use to estimate NDM Nominations and Allocations is known in the industry as the NDM algorithm.

It’s set out in Uniform Network Code (UNC) Section H 2.2.1 as:

NDM demand = (AQ/365) x ALP_t x (1 + [DAF_t x WCF_t]) 

The value of "(1+[WCF*DAF])" is constrained to be no lower than 0.01.

Depending on your site’s specific pattern of gas use, you’re classified into an End User Category (EUC). The AQ, ALP and DAF values used in the formula will vary depending on your EUC.

Understand the formula

The different elements in the formula are described below:

• AQ is the annual quantity of gas that a site or supply point is expected to use assuming seasonal normal weather. It’s measured in kWh and relates to a standard 365-day year.
  
  
• ALP is the Annual Load Profile, which represents the typical gas consumption profile for your EUC. When an ALP value is greater than 1, the EUC is expected to use more than its normal daily average demand. Vice versa if it’s less than one. 
  
  View an introduction to the ALP
  
  
• DAF is the Daily Adjustment Factor, which reflects the EUC’s sensitivity to weather. It shows how much gas consumption is expected to move when the weather is different to Seasonal Normal. The DAF is always equal to or less than 0 and represents the proportion of demand added or taken off for a 1 degree change in CWV. For example an EUC with a DAF of -0.1 would see a 10% adjustment (+ or –) to the seasonal normal demand depending on if the weather is warmer or colder than seasonal normal.
  
  View an introduction to the DAF
  
  
• WCF is the Weather Correction Factor (WCF), which measures how actual weather compares to normal seasonal weather. A positive WCF means the weather has been warmer than normal and a negative WCF means the weather has been cooler. 
  
  

  WCF is defined as: WCF_t=CWV_t-SNCWV_t

  • CWV_t is the Composite Weather Variable for the LDZ for the day
  • SNCWV_t is the Seasonal Normal value of the Composite Weather Variable for the LDZ for the day

NDM Nomination Accuracy Reports

Every year, on behalf of National Gas Transmission, we publish the NDM Nomination Accuracy Report for the most recent Gas Year. This shows the differences between values from various NDM Nomination runs and the NDM Allocation values at D+1 and D+5.

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