south gas regional initiative 14 th stakeholders group meeting

1

South Gas Regional Initiative

14th Stakeholders Group meeting

Madrid, 11th July 2011

2

Agenda

I. Opening

I.1 Welcome

I.2 Approval of the agenda and minutes from the last meeting (for approval)

II. Work Plan 2011-2014. ACER coordination (presentation by NRAs)

III. Tasks for 2011

III.1 CAM harmonisation proposal – Pilot testing of FG CAM in Portugal-Spain

interconnection (for information by TSOs)

III.2 CMP country analysis and harmonisation proposals – Pilot testing of CMP

guidelines for comitology (for information by TSOs)

III.3 Harmonisation of cross border tariffs structures between Portugal and Spain (for

information by NRAs)

IV. Presentation on market coupling in France (Powernext)

V. AOB and next meetings

3

I.2. Approval of the agenda and minutes

4

II. Work Plan 2011-2014. ACER coordination

5

South Gas Regional InitiativeWork Plan 2011-2014 – Drafting process

. 18th and 20th April - Letters from EC to CEER » A European Energy Work Plan 2011-2014 must be elaborated and sent

to EC and ACER by the end of June

. 1st June - First draft SGRI Work Plan (based on previous Action Plan 2011-2012)» Proposal sent by Lead Regulator (CNE) to CRE and ERSE» Feedback received on priorities, actions and timetable» First version agreed by RCC on 13th June

. 13th June - Work Plan launched for Public Consultation among stakeholders» Nine responses received from TSOs, shippers and associations

. Definitive Work Plan sent to CEER on 1st July

. It will be sent to EC and ACER by mid July

6

South Gas Regional InitiativeWork Plan 2011-2014 – Comments received in PC

General comments (1)» The SGRI should bring forward work on tariff harmonisation and

redouble its efforts on commercial interconnection capacity

» Cooperation between Spain and Portugal to set out the steps necessary to establish a cross-border balancing zone. A SGRI pilot project to plan the implementation of this approach by mid-2013

» In relation to TYNDP, it is critical for the future of the sector to support new investment, while ensuring that the selected projects are not redundant with others. The first step is to ensure that development projects are following their defined plans. Regular publication and follow-up of project status is crucial (e.g. OS Fr-Sp)

7


General comments (2)» A critical aspect: harmonization of tariffs. All achieved success could be

turned off by not harmonized tariffs. It is urgent to remedy the duplication of tariffs or "pancaking effect" existing while supplying natural gas from Sp to Fr or Pt. Support is given to the ERSE-CNE joint study; a similar one between CNE and CRE is requested. Meanwhile, adopt a provisional measure to mitigate the effect of duplication of existing tariffs: it should be increased the existing discount on the transportation and distribution fee associated with natural gas exports by international connections (ITC/3354/2010) to temporarily offset the negative effect of pancaking, without reducing system revenues

» On interconnection capacity management: consider the joint management of virtual interconnection points between Sp and Pt/Fr, facilitating optimisation of the existing infrastructure facilites

8


Rationale and objectives» Add, as an objective, the creation of a single balancing zone of

Iberian scope (Sp-Pt) in the horizon of 2014, in line with the European work on Network Codes and with the discussions on the Target Model

9

. Capacity allocation (CAM)» Go on with annual OSP for ST capacities. Explore pilot CAM in Fr-Sp» Harmonisation and application of joint mechanisms (pilot testing of

CAM FG-NC) starting from the interconnection Pt-Sp» Set up a TSOs Common Allocation Platform

South Gas Regional InitiativeWork Plan 2011-2014 – Main contents

Capacity allocation mechanisms (CAM)

Areas of work Respons. Starting Deadline

I.1. OSP France-Spain: annual allocation of short-term capacities

TSOsNov.

(yearly)Dec.

(yearly)I.2. CAM harmonisation proposal between Spain and Portugal

NRAs-TSOs

Jan. 2011

Jan. 2012

I.2. CAM harmonisation proposal in the whole regionNRAs-TSOs

Jan. 2012

Dec. 2013

I.3. Set up a common TSO Allocation Platform TSOsJan. 2014

Dec. 2014

10


. Capacity allocation (CAM)» Proposal for the application of pilot CAM (auctions) by Enagas and TIGF

for Fr-Sp capacity currently under OSP

» Joint CAM mechanisms between Sp and Pt should be transitory, as in a second stage there shouldn’t be CAM between both countries

» Proposal of new task: analyse CAM harmonisation in entry points to Sp and Pt systems, in view of the creation of a single balancing zone between both countries

11

. Congestion management (CMP)

» Design of a CMP pilot project in the interconnection Fr-Sp

» Extension of this coordinated CMP mechanism to Sp-Pt


Congestion management procedures (CMP)Areas of work Respons. Starting Deadline

II.1. CMP harmonisation proposal between Spain and France

NRAs-TSOs

Jan. 2011

Jan. 2012

II.2. CMP harmonisation proposal between Spain and Portugal

NRAs-TSOs

Jan. 2012

Jan. 2013

12


. Congestion management (CMP)» Proposal of new tasks:

- Determine the existence of physical and contractual congestion- Analyse if the transit contract Algeria-Portugal is in accordance with

the requirements of Regulation EC/715/2009- Analyse whether the Spanish pipelines between Tarifa and Badajoz

fulfil the unbundling requirements from Directive EC/73/2009- As a result of the above analyses, set up coordinated CMPs or,

alternatively, procedures for a common technical management of Sp-Pt balancing zones

» CMP analysis and harmonization proposal between Sp and Pt should be done during 2011 and 2012, before the analysis in Fr-Sp

» Proposal of new task for 2011-2012:- Establish mechanisms and measures for maximising interconnection

capacity, such as: higher coordination between TSOs, oversubscription, etc.

13

. Investment – Ten Year Network Development Plans and

projects of common (European) interest» Publication and follow-up of project status from OS Fr-Sp» Input from NRAs-TSOs to the Community-wide TYNDP» Elaboration of Regional investment plans (GRIPs) by TSOs. Evaluate

need for new infrastructure, with market mechanisms and other factors» Regulation 994/2010: analysis and implementation in the Region


Investment in new infrastructure. Ten-Year Network Development Plans and projects of common (European) interestAreas of work Respons. Starting Deadline

III.1.Regular update and publication in CEER website of project status of OS 2013 and 2015

TSOs-NRAsDec.

(yearly)Jun.

(yearly)III.3. Drafting of the South Regional Investment Plan 2012 TSOs Jul. 2011 Jan. 2012III.2.Feedback to ENTSO-G on contents and methodology of the regional investment plan

NRAs Jan. 2012 Jul. 2012

III.2. Input to ENTSO-G for the Community-wide TYNDP 2013 TSOs Jan. 2012 Jan. 2013III.3. Drafting of the South Regional Investment Plan 2014 TSOs Jan. 2013 Jan. 2014III.4. Regulation 994/2010: analysis and implementation in the Region

NRAs-TSOs Jan. 2012 Jun. 2012

14


. Investment – Ten Year Network Development Plans and projects of common (European) interest

» Additional text proposed: reference to the North-South Corridor in Western Europe included in the EC Communication on Infrastructure, which could be developed through MIDCAT. Request for a new evaluation of MIDCAT, once ERIDAN has been approved

» Inclusion of two new tasks (also in the timetable of actions)III. 2. Evaluation of MIDCAT as a project of common (European)

interest linked to the North-South Corridor in Western EuropeIII. 3. Evaluation of MIDCAT considering that ERIDAN project is

approved and gets the EEPR funds and impact in the economic test

15


. Investment – Ten Year Network Development Plans and projects of common (European) interest» Add references to the active participation of stakeholders in the

elaboration of TYNDPs, and their approval by NRAs

» Support the application of market mechanisms to evaluate the need for new infrastructure

» Evaluate projects that would be justified from a SoS/solidarity perspective, but are unable to attract market-based finance, and may require alternative mechanisms

» Reg. 994/2010 (SoS): the competent authority is the Ministry; it is not mentioned how consistency will be ensured

16

. Balancing» Contributing to FG-NC, with regional experience and lessons learned» Investigation of the use of the gas markets for balancing purposes» Analyse the current balancing zones and possible integration» Pilot project for a common balancing platform in the three countries


Balancing


IV.1. Contributing to the FG and NC, by raising the regional experience and lessons learned

NRAs-TSOs

Permanent

IV.2. Investigation of the use of the gas markets in the region for balancing purposes

NRAs-TSOs

Jun. 2012

Jun. 2013

IV.3. Analyse the current configuration of balancing zones and possible merging of certain areas

NRAs-TSOs

Jan. 2013

Dec. 2013

IV.4. Pilot project for a common balancing platform in the three countries

TSOsJan. 2014

Dec. 2014

17


. Balancing» Among the objectives: creating a single balancing zone between Sp

and Pt for 2014

» Add a new task for the design of mechanisms enabling the integration of balancing zones (such as OBAs), and analysis of regulatory harmonisation

18

. Tariffs» CNE-ERSE joint study on tariff regimes in Spain and Portugal» Further studies to evaluate tariff structures and propose improvements


Tariffs


V.1. CNE-ERSE joint study on tariff regimes in Spain and Portugal

NRAs 2010Dec. 2011

V.2. Further studies to evaluate the current tariff structures and propose improvements

NRAsJan. 2012

Dec. 2012

19


. Tariffs» Studies to evaluate the current tariff structures and improvements

should be done as soon as possible, and no later than Dec-2012

» While such studies are undertaken, analysis of alternative provisional measures, such as a review of the transmission tariff cost and the structure associated with exports of natural gas through international interconnection establish in Order ITC/3354/2010

20

. Interoperability» Contribute with regional experience to the development of FG and NC» Analysis of interoperability aspects and procedures that need to be

harmonised among the three countries (in line with FG-NC)» Harmonisation of gas day, communication protocols between TSOs,

quality standards, programming and nomination schedules


Interoperability


VI.1. Contribute with the regional experience to the development of the FG and the NC

NRAs-TSOs

Permanent

VI.2. Analysis of interoperability aspects and procedures that need to be harmonised among the three countries (in line with the FG-NC)

TSOsJan. 2013

Jan. 2014

VI.3. In particular, harmonisation of gas day, communication protocols between TSOs, quality standards, programming and nomination schedules, etc.

TSOsJan. 2014

Dec. 2014

21

. Implementation of the 3rd Package - Transparency» Supervision of compliance in implementation of the new provisions

on transparency in the Regulation 715/2009/CE, for transmission, LNG and storage infrastructure operators


Implementation of the 3rd PackageAreas of work Respons. Starting Deadline

VII.1. Supervision of compliance with the implementation of the new provisions on transparency in the Regulation 715/2009/CE, for transmission, LNG and storage infrastructure operators

NRAsSep. 2011

Dec. 2011

22

. Developing hub-to-hub trading in the South region» Debate on the Gas Target Model within the SGRI, and advise on the

general discussions in Europe» Hub development: promotion and endorsement of organised gas

markets (hubs)» Final goal: contributing to a true hub-to-hub gas trading in the region


Developing hub-to-hub trading in the South regionAreas of work Respons. Starting Deadline

VIII.1. Debate on the GTM inside the SGRI and advise on the general discussions in Europe

NRAs Permanent

VIII.2. Hub development

NRAs-TSOs-

stakeholders

Jan.2013Dec. 2013

VIII.3. Hub to hub gas trading in the region

NRAs-TSOs-

stakeholders

Jan.2014Dec. 2014

23

III. Tasks for 2011

III.1 CAM harmonisation proposal – Pilot testing of FG CAM in

Portugal-Spain interconnection (for information by TSOs)

24

South Gas Regional InitiativeCAM harmonisation

. Actions established in the new Work Plan 2011-2014:

. Update in last IG (6th May): Enagas and REN have already started to work on a proposal for harmonising the capacity allocation mechanisms (CAM) between Portugal and Spain. The proposed method, based on a coordinated auction of bundled capacity, would start in June 2012, for allocating capacity from 1st October 2012 to 30th September 2013

. TSOs were requested to provide a timetable with deadlines and deliverables by mid July

Capacity allocation mechanisms (CAM)

Areas of work Resp. Starting Deadline

I.1. OSP France-Spain: annual allocation of short-term capacities TSOsNov.

(yearly)Dec.

(yearly)

I.2. CAM harmonisation proposal between Spain and PortugalNRAs-TSOs

Jan. 2011 Jan. 2012

I.2. CAM harmonisation proposal in the whole regionNRAs-TSOs

Jan. 2012 Dec. 2013

I.3. Set up a common TSO Allocation Platform TSOs Jan. 2014 Dec. 2014

25

South Gas Regional InitiativeCAM harmonisation

. Update by TSOs – Enagas, REN

26

III.2 CMP country analysis and harmonisation proposals –

Pilot testing of CMP guidelines for comitology

27

South Gas Regional InitiativeCMP harmonisation


. Update in last IG (6th May): TSOs’ initial proposal for CMP harmonisation between France and Spain, based on the application of long-term Use-It-Or-Lose-It (UIOLI). A number of aspects to be harmonised or analysed for this mechanism to be in place: existing Public Service Obligations (PSOs) in France, possibility to get rid of the long term capacity contracts in Spain after the first year, etc . Legal changes could also be required.

. TSOs would provide the SGRI with a more developed proposal in July, based on the findings of this analysis. TSOs will also prepare a short list of the main relevant issues to be tackled in both countries. A first draft to be presented in the next SGRI meeting.

Congestion management procedures (CMP)

Areas of work Resp. Starting Deadline

II.1. CMP harmonisation proposal between Spain and France NRAs-TSOs Jan. 2011 Jan. 2012

II.2. CMP harmonisation proposal between Spain and Portugal NRAs-TSOs Jan. 2012 Jan. 2013

28

South Gas Regional InitiativeCMP harmonisation

. Update by TSOs – Enagas, TIGF, GRTgaz, Naturgas

29

III.3 Harmonisation of cross-border tariff structures between

Portugal and Spain

30


. Update in last IG (6th May): The preliminary study will be completed by NRAs within the following weeks, so that proposals on cross border transmission tariffs that contribute to market integration are included, and to consider other factors, such as the use of all infrastructure tariffs. It will be sent initially to network operators through the IG for comments. After that, it will be shared with stakeholders in a public consultation.

South Gas Regional InitiativeHarmonisation of cross-border structures Portugal-Spain

Tariffs


V.1. CNE-ERSE joint study on tariff regimes in Spain and Portugal NRAs 2010 Dec. 2011V.2. Further studies to evaluate the current tariff structures and propose improvements

NRAs Jan. 2012 Dec. 2012

31

South Gas Regional InitiativeHarmonisation of cross-border structures Portugal-Spain

. Update by NRAs – ERSE, CNE

32

IV. Presentation on market coupling in France -

Powernext

33

V. AOB and next meeting(s)

south gas regional initiative 14 th stakeholders group meeting

Documents