evoluonofthegassectorinspainandits impactonmethodologies · evoluonofthegassectorinspainandits...

Evolu&on of the gas sector in Spain and its impact on methodologies

Ana Barrera 2nd session capacity building – MEDREG

Milan, 22 October 2014

1.   Gas system in Spain

1.1 Current figures

1.2 Basics of the economic system

2. Na&onal regulatory authority in Spain: CNMC

3.   Competences for monitoring tasks

4.   Func&ons of collec&ng data

5. Conclusions

Index

2

Number of clients: more than 7,5 millions

Demand/year: 330 TWh

Regulated ac&vi&es: 3,200 M€/year

•  All consumers are in a liberalised market

•  Part of the household customers are supplied under Last Resort Tariff modality (fixed through market mechanisms)

Free ac&vi&es: cost of gas (30 €/MWh) around 9,900M€

1. Gas system in Spain

1.1 Current figures

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4

•  No naLonal producLon •  Long distances to the sources of supply •  LNG imports

Gas Supply

•  Mild weather condiLons •  Fast growing demand in the period 1995-‐2008 •  Drop in demand from 2008 up today, mainly due to the decrease in the demand of gas for power generaLon, economic crisis, penetraLon of renewable energies

Gas Demand


1.1 Current figures. Supply-Demand

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1.1 Current figures. Demand

África Mediterránea

(52%)

Europa (15%)

América (11%)

África Atlántica

(10%)

O. Medio (12%)

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1.1 Current figures. Supply


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ARGELIA, 194.028, 52,67%

NORUEGA, 42.789, 11,62%

CATAR, 40.609, 11,02%

NIGERIA, 35.838, 9,73%

TRINIDAD TOBAGO, 23.327,

6,33%

PERÚ, 16.247, 4,41%

FRANCIA, 9.405, 2,55%

BÉLGICA, 2.174, 0,59%

OMAN, 1.917, 0,52%

PORTUGAL, 1.090, 0,30%

ESPAÑA, 500, 0,14%

EGIPTO, 464, 0,13%

1.1 Current figures. Supply


Country; GWh; %

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o  DomesLc producLon is marginal o  Transmission network ~12,000

km o  DistribuLon network ~60,000

km o  6 LNG terminals -‐ Enagas, BBG,

SAGGAS -‐ 61 bcm (capacity installed in Europe is around 190 bcm in 2013)

o  6 internaLonal interconnecLon points (Larrau, Biriatou, Badajoz, Tuy, Tarifa and Medgaz)

o  3 Underground gas storage ~ 10 bcm


1.1 Current figures. Gas infrastructure

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h_p://streaming.enagas.es/WebC/Tanques_Ingles/Default.html

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TECHNICAL MANAGEMENT OF THE NATIONAL SYSTEM

REGULATED

ACTIVITIES

1.  Gas system in Spain 1.2. Basics of the economic system

Ø  Transmission and distribu&on networks: natural monopolies in each region as essencial faciliLes. Regulated acLviLes.

Ø  CompeLLon: New role of independent companies that sell gas in the market without having networks. Also the producLon acLvity developed in compeLLon.

Ø  Final customers can choose. Prices are negoLated.


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Scheme:

1.  Establishing the acknowledged remuneraLon for regulated acLviLes.

2.  CalculaLng tariffs to establish the remuneraLon of regulated acLviLes.

3.  Network users pay tariffs for the services taken. 4.  Network operators (TSOs, DSOs, LSOs) have to invoice to

shippers for network uLlisaLon.

5.  Se_lement procedure ensures that every network operator recover its acknowledged remuneraLon.

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13

Gas tariffs: approved by the Ministry of Industry, Energy and Tourism – CNMC issues a non-‐binding report

a) Third party access or TPA tariffs

ü LNG acLviLes, underground storage and the use of transmission and distribuLon networks

ü Each regulated tariff is independent and the user pays exclusively for the use of the infrastructure used.

ü  All access tariffs are entry-‐exit with one single zone ( i.e. no geographical disLncLon is made) but the ship unloading at LNG terminals access depends on the terminal.


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b) Last resort or LRT tariffs: gas + TPA tariffs ü Price set by the Ministry, which will be charged by last resort retailers for consumers who are enLtled to that rate.

ü Available for consumers with low-‐pressure (p ≤ 4 bar) natural gas supplies whose annual consumpLon does not exceed 50,000 kWh

ü  Gas retailers designated (five) as last resort retailers are required to serve consumers who request this type of tariffs.

ü Two components: fixed established by type of consumer + variable dependant on consumpLon.

ü CalculaLon: §  TPA tariffs §  Market margin §  Cost of gas: determined by aucLons at naLonal level once a year, references prices of Henry Hub (HH) and NaLonal Balancing Point (NBP), Brent and price reference index.

Ø Tariffs are reviewed and updated normally annually.


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1 January 2014


•  The former CNE was created in 1998, by Law 34/1998. I t was the regulatory body for energy systems, overseeing their funcLoning and effecLve compeLLon, objecLvity and transparency, benefimng all market agents and consumers.

•  CNMC is the Na&onal Commission for Markets and Compe&&on. It has been established by Law 3/2013 in June 2013 -‐ Started its ac&vity on 7 October 2013

2. National Regulatory Authority: CNMC

16 h_ps://www.youtube.com/watch?v=dUyJWvYeNVA&app=desktop

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•  Result of the merge of the naLonal compeLLon authority and the network industry regulators (Energy, TelecommunicaLons, Post and TransportaLon)

•  Guaranteeing, protecLng and fostering proper funcLoning, transparent markets and effecLve compeLLon in all sectors and markets, for the benefit of consumers and users

•  CNMC Board: president, vice-‐president and 10 Commissioners elected for periods of 6 years -‐ proposed by Government and approved by Parliament

•  Four Units: Energy, CompeLLon, TelecommunicaLons and Audiovisual and TransportaLon


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•  10 members: President, Vice-‐president plus 8 comissionaires. •  6 years term, not renewable. •  They can not be removed from office, except for jusLfied reasons set in Law •  ParLal renewal of the Board every 2 years. •  Exclusive dedicaLon. •  IncompaLbility regime (during the term and 2 years auer). •  Board resoluLons can only be challenged in courts.

Composi&on and

independence

•  Plenary and two Chambers •  Compe&&on Chamber (President plus 4 Members): compeLLon law enforcement and compeLLon promoLon.

•  Regulatory Monitoring Chamber (Vice-‐president plus 4 Members): regulaLon, monitoring and conflict resoluLon in electronic communicaLons; audiovisual; electricity and natural gas; postal sector; airport tariffs and railways.

•  Plenary: approval of annual working and strategic plans; especially relevant decisions and coordinaLon between the CompeLLon and Regulatory Monitoring Chambers.

Working and coordina&on

BODY OF DECISION including regulaLon, sancLons, advisory funcLons, promoLon of compeLLon and arbitraLon and conflict resoluLon


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Main func&ons

Monitoring all economic sectors and

markets

Electricity and gas

Electronic communica&ons and audiovisual

Railways and airports

Postal market Resolu&on of conflicts between economic

operators

Compe&&on law enforcement (Spanish

& EU)

An&trust

Merger control

Public subsidies

Compe&&on Advocacy Studies, research, sectorial reports

Consulta&ve func&ons


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• Guaranteeing, preserving and promoLng the proper funcLoning, transparency and the existence of effec&ve compe&&on in all sectors and markets, to the benefit of consumers and users

Objec&ve

• PromoLng the compeLLve funcLoning of energy markets and the development of the IEM

• Approving the methodologies for the calculaLon of transmission and distribuLon access tariffs in electricity and gas sectors

• Proposals of regulatory developments, publicaLon of circulars, inspecLon and se_lement duLes

• Advisory body, role in conflict resoluLon (third-‐party access), sancLoning competences and consumer protecLon

• Biofuels CerLficaLon Agency

Responsibili&es in Energy framework


•  The Sustainable Economy Act (Law 2/2011) reinforces the independence of the NRA and abolishes the appeal of CNE decisions to the Minister of Industry, Tourism and Trade.

•  The transposiLon of Third Package has been completed by the Royal Decree-‐Law 13/2012 which has granted new power and reinforced du&es to NRA on unbundling, consumers protecLon, approval of methodologies of access tariffs, balancing services, access to interconnecLon infrastructures, capacity allocaLon and congesLon management procedures, enforcement power and penalLes establishment.

•  The permanent commitment of NRA with the European dimension has been recently acknowledged, to promote the development of compe&&ve regional markets and remove obstacles to the cross border energy trade. It is crucial to further progress in the creaLon of the IEM.

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3. Competences for monitoring activites

•  Solving disputes in relaLon to contracts for third party access to the transmission and distribuLon networks.

•  Solving diputes in relaLon to economic and technical management of the system.

•  Establishing penalLes: CNMC has power to establish penal&es on natural gas enLLes not complying with their obligaLons.

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CNMC decisions are binding for the par&es involved and should be appealed directly to the

Court

•  CNMC has powers to request any informa&on from gas enLLes

ü  Elabora&on of Circulares, detailing and specifying the content of the informaLon to be requested

ü  In order to carry out a specific invesLgaLon procedure and to impose legally binding decisions, CNMC will ask market actors the relevant informa&on to solve disciplinary proceedings.

•  CNMC is enLtled to monitor the level of transparency and compe&&veness, including wholesale prices, and the level and effecLveness of market opening and compeLLon at wholesale and retail markets

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Monitoring

Remunera&on of TSOs and DSOs

Designing network tariffs

I. Regulated ac&vi&es

Wholesale market

Retail market

II. Liberalised ac&vi&es

4. Functions of collecting data

III. Monitoring the level of prices, transparency and effec&veness of market opening and compe&&on

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I.1. RemuneraLon of regulated enLLes. General principles

26


ensuring the financial viability of the regulated firms

encourage produc&ve efficiency so as to

reduce the tariffs paid by end consumers

I.1. RemuneraLon of regulated enLLes

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Revenues Costs

Sedlement system of revenues and costs TPA tariffs Costs of regulated

ac&vi&es

Differences

Market growth Infrastructure plan: new and incremental

capacity

I.2. Tariffs calculaLon. General principles •  CNMC sets out the methodology for calculaLng the basic services

involving access to gas faciliLes

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Tariff

DefiniLon by level of

pressure, cons, contr.duraLon

Real cost of using

networks

IncenLve consumer to an efficient

use

I.3. Monitoring regulated acLviLes •  Monitor ing the management and a l loca&on of

interconnec&on capacity, Lme taken by transmission and distribuLon companies to make connecLons and maintainance services, as well as the mechanisms to deal with capacity congesLons.

•  Supervision and cer&fica&on of the separa&on of the ac&vi&es of transmission, regasifica&on, distribu&on, storage and supply in the gas sector.

•  Monitoring the condi&ons for the access to storage, understorage, LNG and other ancillary services.

•  Monitoring the investments plans of TSOs, in parLcular the alignment with the European wide development plan (TYNDP).

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II. 1. Wholesale market •  Spanish OTC gas market (SL-‐ ATR plaworm)

•  Developing a gas hub in Spain •  AucLons to buy operaLonal gas for TSOs

•  AucLons for the adquisiLon of the natural gas wholesale price as reference for establishing the LRT

•  AucLons to buy cushion gas for undergroung storage faciliLes

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CNMC monthly report on wholesale market monitoring


hdp://www.cnmc.es/Portals/0/Ficheros/Energia/Informes/Mercado_Mayorista_GAS/141009_Inf_Sup_Mercado%20mayorista%20y%20aprov%20de%20gas%20junio%202014.pdf

II. 1. Wholesale market •  Spanish OTC gas market (SL-‐ATR plaworm)

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0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

Transacciones de gas natural (nº operaciones/mes)

PR. BBG PR. Barcelona PR. Cartagena PR. HuelvaPR. Sagunto PR. Reganosa Red de transporte AASS

II. 1. Wholesale market • Gas prices at internaLonal markets

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0,00

10,00

20,00

30,00

40,00

50,00

60,00

ene-

11

feb-

11

mar

-11

abr-1

1

may

-11

jun-1

1

jul-1

1

ago-

11

sep-

11

oct-1

1

nov-

11

dic-

11

ene-

12

feb-

12

mar

-12

abr-1

2

may

-12

jun-1

2

jul-1

2

ago-

12

sep-

12

oct-1

2

nov-

12

dic-

12

ene-

13

feb-

13

mar

-13

abr-1

3

may

-13

jun-1

3

jul-1

3

ago-

13

sep-

13

oct-1

3

nov-

13

dic-

13

ene-

14

feb-

14

€/MWh Precios en Mercados Spot vs Precio en frontera España

Brent Northeast Asia LNG NBP TTF Zeebrugge PEG Nord PEG Sud GN-GNL España Frontera Henry HuB

II. 1. Wholesale market • Developing a gas hub in Spain

ü  Ministry leads a working group to develop a naLonal hub (expected in operaLon in 2015).

ü  ERSE and CNMC are working in cooperaLon (since 2011, under the framework of South Gas Regional IniLaLve) on the integraLon of ES and PT markets.

ü  The “Study about models for integra&on of the Spanish and Portuguese gas markets in a common Iberian Natural Gas Market”, approved by both regulators, was in public consultaLon unLl September 2014.

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hdp://www.acer.europa.eu/Gas/Regional_%20In&a&ves/South_GRI/Public_Consulta&ons/Pages/PC-‐on-‐the-‐integra&on-‐of-‐the-‐ES-‐PT-‐gas-‐markets.aspx

II. 2. Retail market •  Retail prices •  Consumers protecLon

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CNMC quarterly report on retail market monitoring


hdp://www.cnmc.es/Portals/0/Ficheros/Energia/Informes/Mercado_Minorista_Gas/141002_Inf_Sup_Mer_minorista_gasT2_2014.pdf

II. 2. Retail markets • Retail prices

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Shipper; GWh; %

II. 2. Retail markets • Retail prices

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II. 2. Retail markets • Consumers protecLon

ü  Law 3/2014 revising the text of general act of consumer protecLon and transposing into the Spanish law the DirecLve 2011/83/EU of 25 October on Consumer rights.

ü  Ministry is responsible for informaLon and complains handling.

ü  CNMC remains in charge of other protecLve funcLons: handling the webpage price comparison tool.

ü  CNMC is in charge of performing du&es of OCSUM (Supplier Switching Office)

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III.   Monitoring the level of prices, transparency and effec&veness of market opening and compe&&on

a) Effec&veness of compe&&on •  Monthly report for wholesale market and quarterly report for retail

market.

•  Ensuring that the switching procedure complies with the regulaLon and procedures in force.

•  DSOs and suppliers are obliged to submit informaLon to CNMC on o  QuanLLes of gas distributed o  Supply contracts: consumpLon and prices o  Reported by geographical area and level of pressure and consumpLon

•  Annual report submi_ed to the Ministry analysing the degree of development of compeLLon in electricity market and hydrocarbons markets, including proposals for regulatory amendments aimed at strengthening the level of effecLve compeLLon in the sector.

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b) Transparency of wholesale prices (I) •  Since there is no organised gas hub to provide a reference price

for gas, CNMC has developed an index for natural gas border prices, taking into account data available in the web of the Office for economics and export control (AEAT).

•  EvoluLon of prices in the interna&onal markets to compare with the domesLc prices of gas.

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10,00

12,00

14,00

16,00

18,00

20,00

22,00

24,00

26,00

28,00

30,00

€/M

Wh

Coste del aprovisionamiento de gas natural (€/MWh)

CMP Coste CNE. Aduanas


b) Transparency of wholesale prices (II)

•  CNMC ensures that contractual freedom with regard to interrupLble supply contracts and LT contracts are compa&ble with European rules.

•  The informaLon of the duraLon of the individual LT gas supply contracts is not public.

•  Supervision competences for CNMC are in line with the REMIT provisions.

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c) Compe&&on in retail markets

•  OCSUM: Supplier Switching Office. Its aim is monitoring and facilitaLng supplier switching procedures.

•  Since 1 July 2014 CNMC is in charge of performing the duLes of OCSUM; monitoring the switching acLvity.

•  OCSUM reports are not public and has the legal obligaLon to present them to Central and Regional Governments.

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GAS SWITCHING DATA 2010-‐2013 2010 2011 2012 2013 Residential switching rate 11,73% 19,04% 18,67% 12,63% Number of residential customers 7.111.612 7.207.431 7.323.988 7.396.840

Total switching rate 11,62% 18,86% 18,48% 12,51% Nº all customers 7.180.367 7.278.501 7.398.013 7.470.174

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hdp://cambiosdesuministrador.cnmc.es/


42

43


hdp://comparadorofertasenergia.cnmc.es/comparador/index.cfm?js=1&e=N


43

44

Fill in relevant informa/on: ZIP code, annual consump/on of natural gas or electricity, …

Price comparison tool for gas and electricity offers Consumer data

45

Result. List of commercial offers and comparison chart with esLmated annual bill

Price comparison tool for gas and electricity offers Query Results

46

Offer detail Es/mated annual bill

Price comparison tool for gas and electricity offers Economic detail of selected offer

47

General condi/ons

Price comparison tool for gas and electricity offers Informa/on about selected offer

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Input of offers

Price comparison tool for gas and electricity offers Back office

Trading companies provide informaLon about their commercial offers.

ü  Large amount of informa&on is collected by the regulator to develop its competences. In parLcular, adopLng rules, monitoring regulated acLviLes and overseeing liberalised markets.

ü  Adop&ng methodologies for processing the informaLon in a friendly manner, in due Lme and form.

ü  Release and disclose the public informa&on. ü  Prevent relevant parLes from sending informaLon

several Lmes (duplicity of data submimng). ü  ConLnue working on reassuring transparency and

integra&on of adjacent markets.

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5. Conclusions

Thank you for your a2en3on

Dirección de Energía -‐ Subdirección de Gas Natural CNMC. Alcalá 47 28014 Madrid Tlf:+34 91 432 97 01 [email protected]

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