28th may 2009, madrid xvi madrid forum ergeg ggplng : 2009 monitoring exercise
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28th May 2009, MadridXVI MADRID FORUM
ERGEG
GGPLNG : 2009 monitoring exercise
2Madrid Forum XVI, 28th May 2009
GGPLNG – 2009 monitoring exercise
INDEXINDEX1. Level of participation2. Results:
2.1. General information2.2. Tariffs and tariff methodologies2.3. Roles and responsibilities2.4. TPA services2.5. Capacity allocation mechanisms (CAMs) and congestion
management procedures (CMPs)2.6. Transparency2.7. Trading of capacity rights
3. Recommendations
3Madrid Forum XVI, 28th May 2009
1. Level of participation
NRAs’ and LSOs’ responses
NRA Country
BELGIUM Commission pour la Régulation de l'Electricité et du Gaz (CREG)
FRANCE Commission de Regulation de l'Energie (CRE)
GREECE Ρυθμιστική Αρχή Ενέργειας / Regulatory Authority for Energy (PAE / RAE)
ITALY Autorità per l’Energia Elettrica e il Gas (AEEG)
PORTUGAL Entidade Reguladora dos Serviços Energéticos (ERSE)
SPAIN Comisión Nacional de Energía (CNE)
UNITED KINGDOM
Office of Gas and Electricity Markets (Ofgem)
TOTAL: 7 NRAs (100%)
LSO Name Number of terminals Country
Bahía de Bizkaia Gas (BBG) 1 Spain
ENAGAS S.A. 3 Spain
Regasificadora del Noroeste, S.A (Reganosa) 1 Spain
Planta de regasificación de Sagunto S.A. (SAGGAS) 1 Spain
ELENGY 2 France
Societé du Terminal Méthanier de Fos Cavou 1 France
GNL Italia S.p.a. 1 Italy
Terminale GNL Adriatico S.r.l. 1 Italy
Fluxys LNG 1 Belgium
Hellenic Gas Transmission System Operator S.A. 1 Greece
National Grid Grain LNG 1 United Kingdom
REN Atlantico, S.A. 1 Portugal
TOTAL: 12 LSOs, 15 terminals (86%)
4Madrid Forum XVI, 28th May 2009
1. Level of participation
Users’ responses
User CountryUser 1 Italy, Spain
User 2 Spain
User 3 Spain, UK
User 4 Greece
User 5 Portugal
User 6 France, Spain
User 7 Italy
User 8 Italy
User 9 Portugal
User 10 France, Italy, Spain
User 11 France
User 12 France, Portugal Spain.
User 13 Spain
User 14 Spain
TOTAL: 14 business groups, 21 questionnaires received
5Madrid Forum XVI, 28th May 2009
2.1 Results: General information
• More than half of LSOs are also TSOs and 36% are supply undertakings as well. Only 2 LSOs report to be exclusively dedicated to managing their LNG terminals.
• 38% of users indicate that they are part of the same vertically integrated undertaking with the LSO to which the completed questionnaire applies
• Only 3 NRAs state having implemented measures to assure confidentiality and avoid competitive imbalances
• Only 17% of LSOs identified potential incompatibilities between GGPLNG and national regulations
6Madrid Forum XVI, 28th May 2009
2.2 Results:Tariffs
2.2 From your experience, the tariff regime structure...
90%
38%52%
33%
86%
38%
38%
52%
5%24%10% 14% 10%10%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Contains adescription of its
objectives
Is cost-ref lective Is clear in thecalculation of tariffsand LSO revenues
Specif ies theallocation of
additional revenuesfrom congestion
Specif ies thecompetent authority
for tariff setting
No answer providedNoYes
USERS‘ RESPONSES
7Madrid Forum XVI, 28th May 2009
2.2 From your experience, the tariff regime structure...
43% 43%
76%62%
29%
10%
19%
29%14% 19%14%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Incentivises eff icientcommercialisation and
terminal use
Is review ed taking intoaccount market evolution
Distinguishes betw eencapacity and commodity
charges
Distinguishes betw eenservices
No answer providedNoYes
43 %
2.2 Results:Tariffs
USERS‘ RESPONSES
8Madrid Forum XVI, 28th May 2009
While NRAs are generally satisfied with the degree of compliance with GGPLNG on tariffs, users believe that there is room for improvement, so an effort needs to be made concerning:
Tariff methodology transparency
Cost-reflectionEfficient tariff incentivising terminal utilisationHow to manage congestion revenues
2.2 Results:Tariffs
9Madrid Forum XVI, 28th May 2009
• Good degree of GGPLNG implementation on these issues.
• Room for improvement regarding: Implementation of IT systems by users Cost-reflection in penalties design Development of a balanced framework regarding
responsibilities and penalties of LSOs and users.
2.3 Results:Roles and responsibilities
10Madrid Forum XVI, 28th May 2009
4.1 Services offered in terminals
0
2
4
6
8
10
12
14
Long-termservices
Short-termservices
Firm services Interruptibleservices
Bundledservices
Unbundledservices
Num
ber o
f LSO
s
no answernoyes
83%
67%
17%
75%
17%
25%
58%
8%
17% 17%
75% 83%
17%
8%
17% 17%
2.4 Results:TPA services. Services offer
LSOs‘ RESPONSES
11Madrid Forum XVI, 28th May 2009
2.4 Results:TPA services. Contracting
proccessStandard contracts and terminal codes are being used or under definition in all the terminals
50%42%
75%
42%
4.3 How is the contracting process?
0
2
4
6
8
10
12
known by the market defined by theregulation
defined by the LSO Contracting processis defined
No time limit forsigning the contract
Num
ber o
f LSO
s
no answernoyes
67%
33%
58%
8%
25%
8% 8% 8% 8%
42%
17%
50%
92%75%
92%
LSOs‘ RESPONSES
12Madrid Forum XVI, 28th May 2009
• Important degree of harmonisation and transparency when defining bundled services, which almost always include: ship reception and unloading, LNG storage and regasification capacity
• Interruptible services are not being offered in most of the cases
• 48% of users indicate that services are defined without market consultation
• 52 % of users explain that services offered do not accommodate their needs, pointing out other services required as bundled or unbundled (trucks loading, extra LNG storage…).
• Services to be defined at market request and with market collaboration, preventing distortions among terminals
• Contracting process to be clearly detailed
2.4 Results:TPA services. Services offer
13Madrid Forum XVI, 28th May 2009
• Users view of terminal code show that, 70% comply with the GGPLNG. • Aspects that can be improved:
To include rules for secondary capacity marketsBetter definition of CMPsTolerance levels of
services and imbalances Liabilities
• Users identified lack of visibilityregarding available slots
GLE to analyse the needto standardise notice periods
2.4 Results:TPA services. Terminal code and
scheduling
4.4. Notice period
31%
25%
44%
Should be 10 days or less
Should be 1 month
Other
USERS‘ RESPONSES
14Madrid Forum XVI, 28th May 2009
In general, users are satisfied with the cooperation between LSOs and TSOs
2.4 Results:TPA services. LSOs and TSOs
cooperation
4.5 Cooperation between LSO and adjacent TSOs include
90% 95%81% 81% 86% 81%
5%
5% 10%10%
10%
10% 14% 10% 5% 10%
0%10%
20%
30%
40%50%
60%70%
80%90%
100%
Compatibleservices
Compatibletechnical
procedures
Coordinatedcapacity
subscriptions
Coordinatedcongestion
managementprocedures
Compatiblebalancingregimes
Communicationof nominations
andrenominations
No answer providedNo
Yes
USERS‘ RESPONSES
15Madrid Forum XVI, 28th May 2009
5.2 The CAMs and CMPs currently applied in the LSO´s terminal...
52%62%
52%
24%33%
33%24%
33%
62%52%
14% 14% 14% 14% 14%
0%
20%
40%
60%
80%
100%
Were defined afterpublic consultation?
Are transparent? Are nondiscriminatory?
Are market-basedsolutions?
Facilitatedevelopment ofcompetition?
Yes No No answer provided
2.5 Results:CAMs and CMPs
LSOs‘ RESPONSES
16Madrid Forum XVI, 28th May 2009
5.2 The CAMs and CMPs currently applied in the LSO´s terminal...
14%
38% 33%43% 38%
71%
48% 52% 38% 43%
14% 14% 14% 19% 19%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Facilitate liquidtrading of capacity?
Are compatible withspot markets?
Are compatible withtrading hubs?
Provide signals tofoster efficient useof the contracted
capacity?
Provide signals tofoster investmentsin new capacity?
No answer providedNo
Yes
Only 14% of users consider CAMs and CMPs facilitate liquid
capacity trading
2.5 Results:CAMs and CMPs
LSOs‘ RESPONSES
17Madrid Forum XVI, 28th May 2009
2.5 Results:CAMs and CMPs
5.3 CMPs currently applied in LNG terminals?
0
2
4
6
8
10
12
Secondarycapacitymarket
Firm short termuse it or lose it
Interruptibleshort term use
it or lose it
Use it or lend it Use it or sell it Long-term useit or lose it
Restriction ofrenomination
rights
Other
Num
ber o
f LSO
s
no
yes
45%
55% 55%
45%
91%
9%
100%
91%
9%
45%
55%
91%
9%
64%
36%
LSOs‘ RESPONSES
18Madrid Forum XVI, 28th May 2009
5.4 Which CMP do you prefer?
15%
76%
23%38%
12%
54%54%
12%
17
13 138%8%
1st Option 2 Option 3 Option
Options Order
Dis
trib
utio
n of
CM
Ps a
mon
g th
e op
tion
num
ber o
f ans
wer
s re
ceiv
ed
for t
he o
ptio
n
Restriction of renomination Rights
Use it or lend/sell it
Use it or lose it
Secondary capacity market
2.5 Results:CAMs and CMPs
76% of users prefer secondary capacity markets
USERS‘ RESPONSES
19Madrid Forum XVI, 28th May 2009
Underused and/or underutilised capacity is only defined in three countries
2.5 Results:CAMs and CMPs. Antihoarding
mechanisms
5.5 Unused and/or underutilised capacity defined by the NRA or other
national authority
43%
57%
yes no
NRAs‘ RESPONSES
20Madrid Forum XVI, 28th May 2009
• Different mechanisms are applied in different terminals• Opinions differ among stakeholders, not only on their understanding of
the current type of mechanism, but also on the opportunity for developing new ones
• Market consultation is not used broadly when designing CAM and CMP. Also a majority of users consider them non market-based
• Improvements can be made developing:Effective, simple and consistent CAM and CMPInformation provided on how mechanisms in place workCAM and CMP compatible with liquid trading and spot marketsClear definition of underused and systematically underutilised
capacity
2.5 Results:CAMs and CMPs
21Madrid Forum XVI, 28th May 2009
• User’s opinions concerning effective publication of transparency criteria, services offer, used and available capacities, tariffs, etc. indicate global recognition of an adequate transparency level
• Improvements can be made on:
Availability of slots
Penalties
Accessibility of information in English
2.6 Results:Transparency
22Madrid Forum XVI, 28th May 2009
6.1 Have you put in place services for facilitating transfer of capacity rigths ?
50%(6 LSOs)
42%(5 LSOs)
8%(1 LSO)
yes
no
no answer
While 76% of users prefer secondary
capacity markets as the best CMP,
according to NRAs, only three of the
monitored countries have established
operative secondary markets
2.7 Results:Trading of capacity rights
LSOs‘ RESPONSES
23Madrid Forum XVI, 28th May 2009
3. Recommendations
Users favour greater standardisation, wider services provision and hence, implementation of general practices at the European level
Certain degree of improvement is necessary regarding tariff structures, certain service provision, CAM/CMP definition and anti-hoarding principles
Secondary markets must be fostered for the dynamic and competitive growth of the market, responding to the most common users’ complaint
Rules to avoid congestion problems and the mechanisms to manage them must be settled under consensus-building, taking into account market’s preferences
More time would be beneficial in order to allow NRAs and LSOs the full implementation of GGPLNG provisions in their systems
In some markets the number of users is still low, so new surveys should be undertaken in the future, once market develops
24Madrid Forum XVI, 28th May 2009
Thank you for your attention!www.energy-regulators.eu
Mark your diary for the World Forum on Energy Regulation IVOctober 18-21, 2009 Athens, Greece
www.worldforumiv.info
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