Brussels, 20 May 2015 Stakeholder Workshop I On issues related to bundling of capacities Brussels, 20 May 2015
Disclaimer • This presentation does not reflect a commitment of ENTSOG to specific options put forward in this presentation. • Options described are initial considerations for discussion with stakeholders and do not reflect concrete proposals of ENTSOG for implementation. • Options described to address identified problems are not necessary compliant with the current regulatory framework and may therefore prove not be viable in the end. 2
IN CASE OF EMERGENCY EVACUATION on C100 Ground floor 1. Leave your desk quietly (do not pack your stuff, leave it there) 2. Go to the closest emergency exit. • Emergency exit is at the front door 3. DO NEVER TAKE THE ELEVATOR OR GO TO THE GARAGE. 4. Leave the building calmly. 5. Once outside the building go right (downside) across the street to the mosque at the entrance of the park (meeting point). 6. Wait for your Safety person and register again. DO NOT: Panic and run! Pack your stuff before leaving! 3
Agenda of the Workshop I Nr Session Time Welcome Coffee 10:00-10:30 1 ENTSOG/EFET opening and introduction 10:30-10:40 2 Presentation of objectives, process 10:40-11:00 Already contracted unbundled capacity and offer of bundled products only 3 11:00-13:00 Issue description and initial feedback Potential options Discussion and initial evaluation Lunch Break 13:00-14:00 4 CMP regulation and its consistent implementation across IPs 14:00-14:45 Issue description and initial feedback Potential options Discussion and initial evaluation 5 Alignment of secondary marketing of bundled products 14:45-15:30 Issue description and initial feedback Potential options Discussion and initial evaluation Coffee Break 15:30-16:00 6 Aligned procedures for the surrender of capacity 16:00-16:45 Issue description and initial feedback Potential options Discussion and initial evaluation 7 Conclusions and way forward 16:45-17:00 4
Objectives and Process 5
What is the Network Code Functionality Process? Identification of FuNC issues Daily use of users Collection of and operators issues by ENTSOG FuNC Expert group to process prepare stakeholder Implementation meetings Stakeholder Inclusion in Workshop meetings to come regulatory/ from issue Recommendation Phase legal identification to framework? business rules 6
What is the process timeframe? Workshop Phase Written Recommendation Feedback Prep. (April 2015 ) Prep. Expert Expert meeting meeting I II ( XXVII 11 May 3 June Madrid Work Work Publica- Forum) shop II shop I tion 20/21 30 20 May July April June April May June July Today 7
Aims of Workshops I & II 1 st Workshop 2 nd Workshop 20 May 30 June Focus on presentation of Focus on presentation of identified issues selected options Presentation of initial Presentation of options identified by proposals for business ENTSOG and EFET rules Discussion on preferred Agreement on proposed ways forward and ways forward for considerations of addressing issues stakeholders and regulators 8
Objective of Workshop I To agree on the options to solve the identified issues which should be developed into recommendations. Step 1) Issue description and initial feedback Step 2) Potential options and their reasoning Step 3) Discussion and initial evaluation Recommendations for solutions will be presented for endorsement at Workshop II on June 30. 9
General principals to assess solutions The following assessment criteria have been established to be taken into account when discussing how best to address the identified issues: Effectiveness in addressing the issue, (not necessarily one size fits all) Compliance with general principles and concepts of CAM/CMP o Maximisation of products on offer o Avoidance of discrimination o Ensuring level playing field Priority of enhanced implementation over amendment of regulations Reduction of implementation efforts and costs 10
Feedback- Do you consider the selection of the 4 issues which are mentioned in the Joint Paper to take the right priorities into account? ENTSOGs approach for a permanent Work stream implementation issue addresses the right handling is supported… issues where practical solutions are needed… Issue 1 is the most urgent Other issues could issue… be considered at a later stage… Issues need to be addressed by Further work on coordinated harmonisation of capacity implementation contracts should be of NCs… explored by this work stream… 11
Issue 1 description: Already contracted unbundled capacity and offer of bundled products only 12
Issue 1 – Introduction Why does NC CAM introduce capacity bundling? – EC Impact assessment: “Separate bookings of entry - and exit-capacity causes unaligned bookings possibly resulting in inefficient use of the interconnection” Bundling requires close co-operation of TSOs NC CAM Article 6 (Capacity calculation and maximisation) requires TSOs to apply a joint method – In order to maximise the offer of bundled capacity through optimisation of technical capacity First step is to determine the technical capacity for the IP 13
Issue 1 – What were users expecting? border EXIT ENTRY Tech cap Offered as bundled capacity – Art. 19(1) Offered as unbundled capacity – Art. 19(5) Booked capacity by all parties Available capacity 14
Issue 1: Already contracted unbundled capacity and offer of bundled products only Lack of corresponding unbundled capacity to be matched with already existing contracts of unbundled capacity on the other side of the IP 15
Feedback- Do you find that the proposed solutions of identified issue no.1 are efficient to resolve the described issue? Supplementary measures should only Measures preventing be used if preventative such a situation in the cannot be applied… first place should be preferred… Levels of technical capacities at IP should be aligned to the extent possible Unbundled capacities that cannot Mechanism shall be be used after mandatory bundling have a reduced value. Therefore a market based and transparent. mechanism has to be installed to restore their value. 16
Preventive options Preventative options Maximisation of technical capacity at an IP in line with Art 6 of CAM NC. A bundling of existing contract according to Art 20 of CAM NC. Application of over-subscription and buy-back at the side of the IP with less technical capacity (if OSBB is already applied by TSO) and non-application of over-subscription and buy-back at the side of the IP with higher technical capacity (in case of no congestion at TSO’s side with higher technical capacity). Offer of interruptible capacity products by TSO with less technical capacity. 17
Overview of Implementation status CAM NC Art. 6 as of February 2015 Frequency for Method for In-depth analysis of Assessment of dynamic number of maximising technical capacities parameters as recalculation of Comments TSOs technical capacity on both sides of an IP defined in Art. 6, technical capacity developed carried out 1(b) CAM NC made set 31 on-going discussion with 4 adjacent TSOs regarding method + its application agreeing on joint method with adjacent TSOs, but 1 application presumably not before Nov 1, 2015 Elaboration of the 1 methodology which shall be applied 10 Legend implemented in process of implementation not applicable, as regards scope, impl. date or derogation under Article 49 of Gas Directive not implemented 18
Option 1A: Conditional surrender of unbundled capacity to obtain bundled capacity 19
General description Conditional surrender is the same as the regular surrender as defined in the CMP but has one additional condition that can affect the re-allocation order of surrendered capacity. When a shipper with unbundled capacity at one side of the border surrenders his capacity prior to the auction of bundled capacity and then successfully acquires bundled capacity at the auction, the re- allocation of capacity surrendered by this shipper gets priority over the allocation of the TSO’s available capacity thereby replacing the unbundled capacity contract to the extent a new bundled capacity contract is acquired. 20
Option 1A: Conditional Surrender of unbundled capacity to obtain bundled capacity (flow chart) Shipper A TSO 1 TSO 2 Surrender of unbundled capacity Bundled at TSO 2 before * capacity auction product *TSO 2 includes surrendered i) Shipper 1: New bundled capacity capacity into available contract capacity for bundling: Bundled auction a) Conditional Surrender : Re-surrender of preference of surrendered unsold unbundled Allocation capacity over unsold capacity at TSO 2 of bundled technical capacity for after auction TSO1: capacity allocation to Shipper A Shipper 1 b) (regular) Surrender: preference of unsold Shipper B Shipper A technical capacity over surrendered capacity for New bundled New Partly old allocation capacity bundled unbundled contract capacity capacity contract contract (partly) replaces old unbundled capacity contract 21
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