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European Workgroup

European Workgroup

2nd October 2014

1. General Update

2

Code Status Update

Code Current Status Implementation date

Congestion Management (CMP)

Implemented 1st October 2013 (Fixed)

Capacity Allocation Mechanism (CAM)

CAM approved for EU wide implementation at relevant EU IPs. 1st November 2015 (Fixed)

Gas Balancing (BAL)

BAL approved for EU wide implementation 26th March 2014 (Commission Regulation (EU) No 312/2014 establishing a Network Code on Gas Balancing of Transmission Networks.)

1st Oct 2015 (Fixed)

Interoperability & Data Exchange (INT)

In comitology, first meeting held 10th July 2014, next meeting scheduled for 3rd and 4th November 2014.

1st April 2016 compliance date

Tariffs Under development. Code to be submitted 31st December 2014. Estimated earliest mid January 2017. Applicable from October 2017.

Incremental Capacity

Under development. Incremental Capacity to be introduced via combination of new articles in CAM Network Code and via Tariffs Network Code. Code amendment to be submitted 31st December 2014.

Applicable from March 2017

Gas Codes Timeline

  

Status of Development of European Gas Network Codes

Future dates are subject to change KEY

Dates shown in italics are best approximations based on current understanding. Activities undertaken by ACER

It has been necessary to 'round' some dates for the benefits of the diagram Activities undertaken by ENTSOG

Activities undertaken by European Commission

TODAY

Mar

Ap

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ayJu

nJu

lA

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Sep Oct

No

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nF

eb

Mar

Ap

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ayJu

nJu

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Sep Oct

No

vD

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nF

ebM

arA

pr

May

Jun

Jul

Au

gS

ep Oct

No

vD

ecJa

nF

ebM

arA

pr

May

Jun

Jul

Au

gS

ep Oct

No

vD

ecJa

nF

ebM

arA

pr

May

Jun

Jul

Au

gS

ep Oct

No

vD

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ACER Review

Go

Liv

e

Go

Liv

e

ENTSOG Drafting

ACER Review

Finalise drafting

Comitology(duration unknown)

Comitology

Initial drafting

Co

nsu

ltatio

n

Finalise drafting

Comitology Phase

ACER Develops Framework

Guidelines on Tariffs

FG Extension

20162015

Go

Liv

e

2014

Com

plia

nce

ACER Review

ENTSOG Drafting

Initial draftingConsultatio

n

Comitology

2012

ACER Review

ENTSOG

revision of Code

Initial drafti

ng

Go

Liv

e

Comitology

Network Code / Guideline

Congestion Management Principles (CMP)

Next Step

Implementation of CMP obligations for 1st October

2013

Comitology

2013

Stakeholder Workgroups

ACER Develops

Framework Guidelines on Interoperability

Interoperability & Data Exchange

Tariffs

Balancing

ACER Review

Post-Comitology Capacity Allocation Mechanisms (CAM)

ENTSOG Drafting

Consultation

Finalise drafting

Comitology

Incremental Stakeholder Workgroups

ACER Develops Framework

Guidelines on Tariffs

FG Extension

ENTSOG Drafting

ACER ReviewComitology

(duration unknown)Initial drafting

Co

nsu

ltatio

n

Finalise drafting

Road Map

Notes: 1) Long term capacity auctions may need to be delivered in conjunction with short term auctions

Today

2014

2015

2016

2017

2018

Surrender process (UNC Mod 0449)

LTUIOLI & enhanced provision of data to ENSOG platform

Gas Day (enabler)

Short term auctions (within day + day ahead +monthly ) capacity allocation arrangements at IPs

Other EU legislation – REMIT

Data exchange, allocations

Long term capacity auctions from Mar 16 (effective 1st Oct 16)

Gas quality data publication

Short term UIOLI

Incremental capacity auctions at IPs (TBC)

Implementation of tariff arrangements at IPs (2017)

CMP CAM Interoperability Tariffs Other

Phase 1bBy Oct 2014

Phase 1aFrom 1st Oct 2013

Phase 2aeither 1st Oct or 1st Nov

Phase 2b on or before 1st Nov

Phase 3

Phase 4

Balancing

Cross border nominations etc.

6

Action from September 2014 EUWG

Action : EU0904: Planned UK Link Downtime

and the New Nominations Process at IPs -

National Grid NTS to review alignment with the

closing times of other TSOs, the OCM and

other markets and provide more details at the

next meeting. (National Grid NTS, PB)

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Responses

Adjacent Transporter system availability

IUK – 24/7

BBL – 24/7

BGE(UK) – TBC

Trading markets availability

OCM (ICE Endex) – from 12:00 midday Day-Ahead until 03:35am

on the gas day. End time will move to 02:35am from 1 Oct 2015

OTC (CME Group) - Sunday 11:00 PM – 10:15 PM Friday, with a

45-minute maintenance break each day beginning at 10:15PM

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Gemini Housekeeping Window – Next Steps GB Stakeholders initial view is that current UK Link

Downtime meets requirements of Interoperability Code

Biggest impact is on D-1 however there remains considerable opportunity to address balancing position within-day

On the day impact is minimal and outside core business hours (last NDM forecast is midnight)

EU Workgroup suggested wider consultation should be considered

Formal consultation [November] is being considered subject to further discussions with adjacent TSOs

2. EU Code Updates

EU Tariffs Code Update

EU Tariff Code Update

Areas for revision to presented at Stakeholder refinement workshop 24th September

Transmission Services Definition

Publication Before Annual Auctions

Payable Price

Multipliers

Benchmarking

One-off Capacity Reset

Remainder of the 300+ issues arising from stakeholder consultation to be discussed within ENTSOG until end October.

Transmission Services

Current draft: ‘transmission services’ means the regulated services provided by the transmission system operator to all network users within the entry-exit system for the purpose of transmission

The current “Dedicated Services” definition is more contentious but could be something like: ‘dedicated services’ means the regulated services, the revenue from which forms a part of the allowed revenue, other than transmission services provided by the transmission system operator to specific network users, or infrastructure operators, or at specific entry or exit points

There is no proposal at present to include an exhaustive list of “dedicated services” – instead clear criteria shall be established

ENTSOG shall have a discussion if short-haul should have its own article – i.e. in setting tariffs the TSO/NRA “should consider the benefits of avoiding inefficient by-pass”.

Payable Price

ENTSOG shall be proposing a fixed price option at IPs.

The current thinking is as follows:

Floating price tariffs will be the default option

No obligation to provide a fixed price mechanism but the TSO will have the option to make this available (subject to consultation and NRA approval).

Proposal for fixed price mechanism is:

(allocated reserve price +premium) *indexation

The calculation of the premium and the index is to be consulted upon and agreed by the NRA.

Premium can be 0 or indexation can be 1

Current draft still allows use of commodity charge at IPs for revenue recovery if fixed price used.

One-off Capacity Reset

ENTSOG does not plan to include a reset in the draft Code

ENTSOG Board has agreed for paper to be produced on counter-arguments for a reset

Transfer of risk and cost to the TSO and market

Greater impact on parties unable to move short term capacity bookings

Additional tariff instability immediately post implementation

Need to further consider with other Codes, such as CMP

Can code elaborate on other potential mitigation measures?

EU Incremental Amendment Update

EU Incremental Amendment

Stakeholder refinement workshop 23th September.

Main issues of concern were primarily on the following:

The clarity and preciseness of the incremental offer process

Shippers want greater frequency for demand assessment (i.e. > 2 years)

The conditions and parameters of open season procedures

Some concern that defaults to OS is criteria met on one section of incremental route.

How parameters would influence the f-factor

How does this work with auction premium to pass test

How the tariff framework impacts the incremental process

Fixed v floating

Incremental Amendment

Predictability and certainty on tariffs is key concern for shippers with respect to booking long-term capacity to trigger incremental capacity

Incremental Proposal will reflect the principles defined for the TAR NC on fixed vs. floating tariffs

ENTSOG keeps Art 26(2) of CAM NC also in the refined Incremental Proposal

The payable price determined in a capacity auction can be either a fixed price or a variable price or be subject to other arrangements provided for in the applicable regulatory regime. The fixed price shall consist of the applicable tariff at the time of the auction plus the auction premium. The variable price shall consist of the applicable tariff at the time when the capacity can be used plus the auction premium. The arrangements can be different for the capacities in a bundled product on either side of an interconnection point.

Art 26.2 of NC CAM

EU Interoperability and Data Exchange Update

Interoperability and Data Exchange:Common Units

EU 0901: National Grid NTS legal view on whether Alternative 2 (rounding the 0.999 conversion factor to 2DPs) would be compliant

Neither the Interoperability Code nor ISO 13443 expressly require the use of a particular number of DPs, however:

Use of 2 DPs is not consistent with the ISO standard in which all conversion factors are quoted to 4 DPs

Quoting the factor at 2 DPs effectively disregards that there is a difference between energy figures quoted at the two sets of reference conditions

NG NTS cannot therefore adopt a conversion factor which treats energy figures quoted by reference to 15/15 reference conditions as being equal to figures quoted by reference to 0/25 reference conditions

Interoperability and Data Exchange:Common Units

National Grid NTS remains open to consider any other options but otherwise will progress one of the following:

1) Conversion of shipper IP allocations from 0/25 to 15/15 in Gemini

2) Conversion of IP shipper capacities booked on PRISMA and confirmed nominations (post matching) in Gemini

3) Add a ‘balancing allocation’ to IP shippers’ accounts in Gemini which represents the difference between its 0/25 allocation and the equivalent value at 15/15 (variation on option 1)

EU Gas Quality HarmonisationUpdate on the CEN Standard

Introduction

CEN issued its draft gas quality standard to national standardising bodies in May 2014

BSI’s UK consultation closed on 31st August 2014

BSI committees GSE/4 and GSE/33 have now reviewed the comments received and submitted the UK response to CEN

This presentation summarises the UK position and next steps for this standard

CEN Standard: Headlines of the UK Response

BSI has voted to reject the standard as currently drafted and has applied to CEN for a ‘Special National Condition’ (SNC)

Should the standard be adopted, the SNC would insert a foreword to qualify its adoption as British standard

The UK’s technical case for the SNC in summary is:

The gas quality required for safe operation of UK appliances was determined many years ago

For the future, the UK requires a gas quality that ensures their continuing safe operation

Broadening the Wobbe Index to the parameters proposed would undermine the operations of some industrial and commercial gas consumers

CEN Standard:Reasons for BSI’s Negative Vote

The CEN working group should be allowed additional time to take account of the EC’s conclusions document from the 1st July 2014 workshop

Consideration of a narrower Wobbe Index range

Application of the standard

Implementation leadtime

Supporting work is not sufficiently conclusive to agree limits at this stage

A further draft should be issued for public enquiry once comments on the current draft have been considered

CEN Standard:Summary of UK Comments on Parameters

Parameter UK Comments

Wobbe Index • A range of 46.44 – 54.00 MJ/m3 is not acceptable to the UK.

• There is insufficient evidence that this range provides for either the optimum balance of interests or that it would result in no safety issues.

• Gas turbine operators have expressed concern about combustion stability.

• Minor editorial comments have also been made on the ‘qualifying wording’ (clause 5).

Oxygen • Text amendment proposed to recognise that a higher limit may be permitted at an entry point if gas will not flow to offtakes sensitive to oxygen content.

• Text amendment proposed to include electricity generation plan as a type of offtake sensitive to oxygen content.

• Further discussion is required on oxygen limits

CEN Standard:Summary of UK Comments on Parameters

Parameter UK Comments

Carbon Dioxide • Text amendment proposed to recognise that a higher limit may be permitted at an entry point if gas will not flow to offtakes sensitive to CO2 content.

• Text amendment proposed to include electricity generation plan as a type of offtake sensitive to CO2 content.

• Concern raised by power plant operators that increased levels of CO2 above 2.5% may cause increased costs of compliance with EU ETS

Dewpoints • Concern raised by power plant operators that the presence of higher hydrocarbons may not be accurately recorded by measurement systems

• Recommended to reconsider dewpoint limits

CEN Standard:Summary of UK Comments on Parameters

Parameter UK Comments

Methane Number • Further investigation required to ensure that methane number of 65 is acceptable to all manufacturers of appliances which incorporate motors

Contaminants • Further guidance required, alternative text proposed aligned to GS(M)R definition

Hydrogen • Concern at the lack of a limit on hydrogen expressed by appliance manufacturers and operators of gas turbines.

• Recommended to include hydrogen in the table of parameters, recognising that until or unless there is a commonly agreed EU limit, national arrangements shall apply.

CEN Standard – Next Steps

National standardising bodies of Member States have until 8th October 2014 to submit votes and comments

CEN working group meets in November to review the comments

3. UNC Modification Plans

Phase 2 UNC ModificationsPotential Timescales

EU Network Code Area of change Panel Submission Workgroup Development

UNC Consultation

Gas Balancing (BAL) Information Provision March 2014 2 Months July 2014

SMP Buy & Sell April 2014 1 Month July 2014

Nomination Process at IP’s April 2014 6 - 9 Months Nov 2014

Capacity Allocation (CAM)

CAM / CMP Compliant Capacity Auctions

May 2014 6 - 9 Months Q4 - 2014

Interoperability & Data Exchange (INT)

OBAs / allocations August 2014 6 Months Q1 - 2015

Interconnection Agreements/Contract Changes(facilitating Modification )

Q1 - 2015 3 Months Q2 - 2015

Data Exchange Q1 - 2015 3 Months Q2 - 2015

Units (reference conditions) Q4 - 2014 3 months Q1 - 2015

4. System Developments

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Phase 2 Delivery Plan

May Jun Jul AugJan Feb Mar AprSep Oct Nov Dec

2014

May Jun Jul AugJan Feb Mar Apr

Requirements Design TestBuild

Sep

Requirements Design TestBuild

De

liv

ery

pla

n

NG IS

Xoserve

2015

Imp

Imp

Implementation date (not yet approved): 6th September 2015

(shared at the UK Link Committee meeting on 11th September 2014)

33

Overview of Key System Delivery Stages

Requirements

Business process definition, screen prototypes

Design

Technical design, security

Build

Write system code, test individual components

Testing

Supplier, UAT, external parties, performance, interface

We are working with our Service Providers (Xoserve and NGIS) to determine planned dates for the testing phase. We would like to provide you with more detail on this at the November Workgroup

Implementation

Dress rehearsals, implementation, support

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Business and Systems Delivery Team

Contact details

Chris Gumbley – EU Programme Delivery Manager

Bill Goode - Gemini Implementation Lead

John McNamara – iGMS & Consequential Change Implementation Lead

Team email: box.gasops.businessc@nationalgrid.com

5. Draft Modifications

6. AOB

Bridge to 2025 and Gas Target Model

ACER Conclusions Paper: 'Energy Regulation: A Bridge to 2025'. Published 23 September.

ACER Gas Target Model update: Expected to be published Autumn 2014

37

REMIT

Comitology meeting set for 3 October

(expected to be completed in only one meeting).

Expected to enter into force by end of 2014

38

REMIT WORKSHOP - 24 Oct

 24 Oct, 10:00 – 12:00 at ENA offices

Discussion topics: 

NG / Xoserve proposed solution to facilitate shippers reporting of secondary capacity trades

The future of the NG inside information notifications website https://www.remit.gb.net/

EIC codes – facilitating GB only shippers access to EICs

Register by email: europeanpolicy@nationalgrid.com

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