Capacity allocation in natural gas transmission networks

Framework Guideline (Pilot)

Dr. Stefanie Neveling, ACER Workstream Co-Chair

Walter Boltz, ACER GWG Chair 19th Madrid Forum, 21-22 March 2011

19th Madrid Forum, 21-22 March 2011

Process on CAM Guidelines & Codes

ERGEG adopts Pilot CAM FG

ENTSOG develops NC

NC in ComitologyCOM

evaluates Pilot FG requests revision

June 2010

ERGEG adopts revised Pilot CAM FG

Sept. 2010

COM evaluates Pilot FG invitation to ENTSOG

Dec. 2010

Jan. 2011

End 2012

ACER consults FG ACER adopts FG

March 2011

June 2011

ACER opinion on NC (& revision by ENTSOG)

19th MF

COM evaluates FG invites ENTSOG to transfer Pilot into formal procedure

Jan. 2012

19th Madrid Forum, 21-22 March 2011

Commission‘s evaluation of ERGEG FG

. COM evaluated Guideline under Art. 6(4) Reg. (EC) No. 715/2009» Non-discrimination, effective competition, efficient functioning of

the market

. Issues welcomed by the Commission» Harmonised capacity products;» Bundling of capacities;» Market-based CAM.

. Issues to be further elaborated» Possibility for NRA decision in some areas (CAM);» “Technical” parameters reg. bundling of capacities (timing, loss

of capacities, relation to existing contracts);» Auction design (reserve price, existing capacities);» Rules for firm vs. interruptible capacities;» Harmonisation of gas day.

19th Madrid Forum, 21-22 March 2011

ACER FG – General Provisions

.Scope of the Framework Guideline:

» Existing capacity (as calculated by TSOs) of IPs between entry-exit zones within the EU;

» Existing contracts to be adopted six month after entry into force the network code;

» Incremental capacity excluded, but allocation should be consistent with FG.

19th Madrid Forum, 21-22 March 2011

ACER FG - Capacity Products

. Definition of capacity products:

» Small number of products, various durations (short term - multi-annual);

» A minimum share of capacity shall be sold as short term products;

» Firm and interruptible standardised products all over Europe;

» Daily capacity product from 5:00 to 5:00 GMT (unless ENTSOG justifies different timing).

19th Madrid Forum, 21-22 March 2011

ACER FG - Capacity Bundling

. Bundled services:

» Exit & Entry capacity available at every IP (no exemption possible for isolated markets) shall be integrated to allow for transports via a single allocation & nomination procedure;

» Sunset clause: entire technical capacity shall stepwise be bundled until 5 years after the entry into force of legally binding network codes (default rule) – Impact Assessment;

» One contractual IP for several physical IPs connecting the same zones (virtual interconnection point), after 5years if no reduction of capacity.

MA1 MA2

19th Madrid Forum, 21-22 March 2011

ACER FG - Capacity Allocation

. Capacity allocation procedures:

» Auction as standard allocation methodology for firm and interruptible (implicit allocation to be allowed);

» For within-day capacity FCFS or auction, but same for adjacent TSOs;

» Interim period possible, but adjacent TSO’s should apply harmonised CAM method;

» Regulated tariff as reserve price (if FG Tariff does not address this);

» Auction revenues to be uses for different aims (e.g. lowering tariffs, removing congestion) subject to NRA approval;

» Adjacent TSOs to establish common platform, eventually single EU wide platform.

19th Madrid Forum, 21-22 March 2011

Cooperation with ENTSOG

. Cooperation with ENTSOG is very good » Continuous discussions with ENTSOG Capacity Product

Coordination Taskforce on the substance;» Monthly meetings took place.

. ENTSOG and ERGEG/ACER will continue to cooperate

throughout the process to develop framework guidelines and

network codes;

. Consultation by ACER & ENTSOG are both important

Stakeholder participation asked for!

19th Madrid Forum, 21-22 March 2011

Expectations towards ENTSOG

. Expectations towards ENTSOG and its Network Code development process

» To closely involve stakeholders, especially regarding• Breakdown of capacity services;• Percentage of available capacity to be set aside for firm

short term services.

» To continue the good co-operation of ENTSOG and ERGEG/ACER on all levels;

» To deliver detailed rules on • Auction design;• Bundling of products; • Harmonisation of transportation contracts; • Relevant communication procedure.

19th Madrid Forum, 21-22 March 2011

Next steps

. ACER Public Consultation on FG CAM was launched.» Deadline for submitting comments 2 May 2011;» Log in can be requested at ACER webpage (

www.energy-regulator.eu).

. Consultant will analyse impact of sunset clause as an input for the ACER Initial Impact Assessment.

. Commission invited ENTSOG to start drafting the network code on CAM» Deadline for submission 27 January 2012.

19th Madrid Forum, 21-22 March 2011

Thank you for your attention!

www.energy-regulator.eu