european developments transmission workgroup 2 nd february 2012
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European Developments
Transmission Workgroup2nd February 2012
EU CAM Network Code and CMP Guideline Proposal Update
Transmission Workgroup 2nd February 2012
Content
ENTSOG Capacity Allocation Mechanism (CAM) Network Code Update
Introduction
High Level Principles
Timescales
Congestion Management Procedures Guidelines (CMP) Update
Introduction
High Level Principles
Timescales
Introduction
ENTSOG CAM Development Progress
Following on from December’s Workstream update regarding the re-consultation on the CAM Code and Stakeholder responses
ENTSOG have amended the Code in-line with Stakeholder feedback
Moves away from GB Entry regime (as was originally proposed in the draft Code)
Both CAM and CMP relate to IP points only within the European Union
Timelines described later in presentation
Summary of Responses (from Dec Workstream update)
Products Start date Algorithm Limit price steps
Quarterly 14 1st Jan 5 Multiple 28 Unlimited 35
Yearly 24 1st Oct 29 Single 6 Limited 1
No preference
0 No preference
4 No preference
4 No preference
2
Minimise unsold
Default Rule
Auction Premium Split
Minimise 9 Max 12 Proportional 13
Draft NC 24 Partial 5 Equal 9
No preference
5 No preference
21 No preference
16
Full consultation responses available at: http://www.entsog.eu/publications/index_g_cam.html
(CAM) - High Level Principles
Principles of Co-operation
Standardisation of communication - Included an agreed approach to communication procedures within NC. The Code would commit TSOs to working together to develop agreed communication procedures
Gas Year - 1st Oct
Allocation of firm capacity Capacity reservation – at least 10% of technical capacity to be
released for shorter duration products* subject to ACER clarity on definition
Standard Capacity products – Yearly (15yrs), then quarterly (for
Year 1), monthly (month ahead), Daily (Day ahead) and Within Day.
(CAM) - High Level Principles
Allocation of firm capacity (cont)
Within-day capacity allocation - Sell within-day firm capacity via auctions and (due to the Guideline text) a potential to nominate interruptible capacity within-day via a non-auction method (although needs to be the same method either side of the IP)
Auction algorithm
Longer duration products - Multiple round ascending clock - greater perceived simplicity, lower vulnerability to strategic bidding (since price discovery measures are embedded in the design) and ability to adjust bids or step out of an auction in response to the progress of auctions at other IPs
Number of price steps in a volume based auction - Unlimited number of price steps, included is a time limit to avoid an overlap with the next relevant auction
Minimisation of unsold capacity - Small price steps. Approach reduces unsold capacity while avoiding pro rata
Short Term Products – Day Ahead & Within Day – Uniform price
(CAM) - High Level Principles
Cross-border contracted capacity
Mandatory bundling - Partially unbundled default rule approach
Under this approach, the capacity to be bundled after implementation of the default rule would be determined by the lower of the aggregated bookings on either side of the IP
Non-matching capacity would remain unbundled and would be split proportionally amongst network users
Sunset Clause
Now included in final CAM Code to satisfy CAM Guideline
Forces Users to agree amongst themselves the capacity held (as a bundle) either side of the IP point
Max timeline 5 yrs (after Code comes into force)
(CAM) - High Level Principles
Tariffs
Revenue Equivalence - Introduces a non-arbitrary and reasoned approach to setting the tariffs for different product duration
Allows system users to procure capacity according to their identified needs by minimising any undue incentive to book capacity before such a need is identified
Avoids cross-subsidies between network users – Users who require highly variable gas flows, the levels of which are only known shortly before the actual gas flow, will be able to match capacity bookings to their requirements by building a highly variable product profile
(CAM) - High Level Principles
Booking Platforms – The Code includes next steps and timings
Sets out Next steps in the process to achieving a single EU platform
No later than 1 year after the Code comes into force, ENTSOG shall publish a report describing the number and operation of existing and planned booking platforms
Based on this report – a market consultation process to identify the market’s needs with respect to booking platforms; which shall last at most 12 months and shall end with the publication of a comprehensive report setting out the market’s requirements for booking platforms by ENTSOG
The report will also provide an assessment of costs and time needed to reduce the number of platforms or to eventually establish an EU-wide booking platform meeting the market’s requirements. A corresponding action plan towards a single EU wide booking platform, and a timetable for its implementation shall be part of this report.
Interaction with CMP Guidelines?
ACER tasked Frontier Economics to review ENTSOG CAM auction design
CAM Timescales
Activity By when
ENTSOG Finalise Network Code 19/01/12
Internal Governance Approval 26/01/12
Stakeholder Workshop – Brussels
(CAM Launch)
31/01/12
Stakeholder Support Process (2 weeks) Ends 13/02/12
ENTSOG Board Approval 06/03/12
Deliver Network Code to ACER 09/03/12
Capacity Allocation Mechanisms (CAM) - Potential Timescales
2014 2015 201620132012
Network Code Provided to ACER09/03/12
ACER ReviewNC 3 mths?
Comitology 12 mths?
Amend Codes 9 mths
System Implementation [18mths?]
June JuneMar Sept
Introduction
ENTSOG CMP Update
Continued to influence the Commission on the content and impacts of the Guideline Proposal
Held discussions in particular on the direct impacts to the CAM Code
European TSOs lobbying relevant Ministries in preparation for the Comitology process
Commission issued Impact Analysis documents mid Jan 12
CMP – High Level Principles
Capacity increase via oversubscription and buy-back
Provides TSO’s with an incentive to make additional amounts of Firm Capacity available over and above the technical capacity
Additional amount above technical capacity to be offered ‘upfront’ in an auction
The technical capacity is to be allocated before any oversubscribed incentive based capacity
Joint Regulator & TSOs to co-operate to develop best practices
Incentive schemes needed within and across member states IPs
CMP – High Level Principles
Firm Day-ahead use-it-or-lose-it mechanism
Restriction of re-nomination rights (w.e.f 1st July 2016) subject to Regulator decision at IP
Surrender of booked capacity
Users can surrender capacity at any time to the TSO
Obligations remain until reallocated
Unsold capacity to be sold before surrendered capacity
CMP – High Level Principles
Long Term use-it-or-lose-it mechanism
Removes current firm contractual rights where Users do not utilise the capacity over a defined period
Information provision
Data is to be made available on one central platform
Interaction with CAM?
CMP Guidelines
The Commission published the latest version of the Draft Guidelines – 19th December 2011
GB Stakeholder meeting held with DECC 13th January 2012
Written views provided to DECC
The first Comitology meeting for Member States held 26th January 2012
Congestion Management Procedures (CMP)- Potential Timescales
201420132012
Comitology Starts26th January 2012
Comitology lasts for ???
Agree CMP regime with relevant NRA(s) by / Implementation by 1st July 2013?
July
EU Tariffs Update
Transmission Workgroup2nd February 2012
ENTSOG response to ACER Tariff Scoping consultation
ACER is expected to issue a Tariff Scoping consultation – January 2012
Responses are invited by [x] March 2012
Following response analysis by ACER the Commission will decide whether ACER will be invited to write the Framework Guideline or use the Comitology guideline route.
Potential tariff codification process(es)
ACER Consultationon FG scope
Commissiondecides whether toinvite ACER to write FGor go COM guideline route
March Summer 2012
Response analysisby ACER
September
FG drafting by ACER,2 month formal consultation,6 months overall until submission to COM
Invitation letter
Timeline is very indicative
COM scrutinizes FGand invites ENTSOG
February 2013
ENTSOG runs12 monthNetwork codeprocess
Commission drafts guidelines and sends themdirectly to comitology
Alternative or cumulative
Interoperability Update
Transmission Workgroup
2nd February 2012
Interoperability Framework Guideline
We now expect ACER’s consultation on the Framework Guideline to be published in March
This is to allow the regulators more time:
To complete ‘problem identification analysis’ – i.e. what are the genuine technical barriers
To take further views from the Interoperability Expert Group (meeting scheduled this month in Ljubljana)
To finalise their thinking on the scope
National Grid NTS will continue to argue that the scope should be limited to interconnectors, not all entry / exit points
ENTSOG TYNDP 2013-2022 – Stakeholder Joint Working Sessions
TYNDP 2013-2022: Stakeholder Joint Working Sessions
The Ten Year Network Development Plan (TYNDP) 2013-2022 will be the 3rd edition of the non-binding Union-wide plan of infrastructure development and will build on the past experience and feedback received.
Based on ENTSOG best practices a series of Stakeholder Joint Working Sessions have been set-up on the following topics:
Infrastructure
Demand
Supply
Market Integration
Security of Supply
TYNDP 2013-2022: Stakeholder Joint Working Sessions
The first of the TYNDP SJWS took place on 24th January.
The morning session was focused on the ‘Infrastructure’ topic. The methodology used in the previous TYNDP and the feedback received from stakeholders was discussed.
The afternoon session covered both ‘Supply and Demand’, and again an overview of the process and methodology used in the previous TYNDP was discussed. Stakeholders then outlined some potential improvements.
TYNDP 2013-2022: Stakeholder Joint Working Sessions
ENTSOG will take away high level proposals from stakeholders and at the next SJSW on these topics come back with a solid proposal, encompassing the key points from the discussion
The next SJWS is going to be on Wednesday 15th February in Brussels
The topics covered will be Market Integration, Security of Supply and an overview of the ENTSOG Network Modelling Tool
As always the SJWS are open to all stakeholders who wish to take part
ENTSOG maintains a register and will pro-actively notify those on the register about developments in this and other areas of ENTSOG’s work. Please write to info@entsog.eu if you want to be included in this e-mailing list.
EU Updates Timetable
Timetable aims to highlight the key items (consultations, workshops, decisions, etc.) National Grid NTS expect to cover via this agenda item in the forthcoming months
Topic TX Workgroup
• Gas Regional Investment Plan (GRIP) Consultation Feedback.
• Winter Outlook update
March 2012
• Balancing update• Interoperability update
April 2012
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