The commercial framework requires users of the system (gas shippers) to balance supply into, and demand from the network. If this balance is not expected to be achieved on any given day, then the System Operator, as Residual Balancer, will enter the market and undertake trades (buys or sells) to seek to resolve any imbalance on the system.
The gross value of these trades are typically in excess of £100m a year. The revenues or costs incurred by actioning these trades are met by the system users and apportioned based on the users throughput (allocated inputs plus outputs divided by two).
The incentive comprises of two elements, based on Linepack Performance Measure and a Price Performance Measure.
In aggregate, these incentives are subject to a maximum allowance of £2m per annum and a maximum loss of -£3.5m per annum.
This scheme is in place from 01 April 2013 until 31 March 2021.